Registration No. 2-93177
File No. 811-4108
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. __ / /
POST-EFFECTIVE AMENDMENT NO. 29 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X
/
AMENDMENT NO. 25 / X /
OPPENHEIMER VARIABLE ACCOUNT FUNDS
(Exact Name of Registrant as Specified in Charter)
3410 South Galena Street, Denver, Colorado 80231
(Address of Principal Executive Offices)
303-671-3200
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box):
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On May 1, 1996, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / On __________________, pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On ______________, pursuant to paragraph (a)(2)
of Rule 485
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended December 31, 1995, was filed on February 28, 1996.
<PAGE>
FORM N-1A
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
- --------- ------------------
1 Front Cover Page
2 Overview of the Funds
3 Financial Highlights; Performance of the Funds
4 Front Cover Page; How the Funds are Managed--Organization and
History; Investment Objectives and Policies; Investment
Restrictions
5 How the Funds are Managed; Expenses; Back Cover
5A Performance of the Funds
6 How the Funds are Managed - Organization and History; The
Transfer Agent; Dividends, Capital Gains and Taxes; Investment
Objectives and Policies
8 How to Sell Shares
9 *
Part B of
Form N-1A
Item No. Statement of Additional Information Heading
- --------- -------------------------------------------
10 Cover Page
11 Cover Page
12 *
13 Investment Objectives and Policies; Other Investment
Techniques and Strategies; Additional Investment Restrictions
14 How the Funds are Managed--Trustees and Officers of the Funds
15 How the Funds are Managed-- Major Shareholders
16 How the Funds are Managed
17 Brokerage Policies of the Funds
18 Additional Information About the Funds
19 Your Investment Account - How to Buy Shares; How to Sell
Shares
20 Dividends, Capital Gains and Taxes
21 How the Funds are Managed; Brokerage Policies of the Funds
22 Performance of the Funds
23 Financial Statements
______________
* Not applicable or negative answer.
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Prospectus dated May 1, 1996
OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is a diversified open-end
investment company consisting of nine 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 GROWTH & INCOME FUND ("Growth & Income Fund") seeks a high
total return (which includes growth in the value of its shares as well as
current income) from equity and debt securities. From time to time this
Fund may focus on small to medium capitalization common stocks, bonds and
convertible securities.
OPPENHEIMER GLOBAL SECURITIES FUND ("Global Securities Fund") seeks long-
term capital appreciation by investing a substantial portion of its 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 explains concisely what you should know before
investing in the Trust and the Funds. Please read this Prospectus
carefully and keep it for future reference. You can find more detailed
information about the Funds in the May 1, 1996 Statement of Additional
Information. For a free copy, call OppenheimerFunds Services, the Funds'
Transfer Agent, at 1-800-525-7048, or write to the Transfer Agent at the
address on the back cover. The Statement of Additional Information has
been filed with the Securities and Exchange Commission and is incorporated
into this Prospectus by reference (which means that it is legally part of
this Prospectus).
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.
<PAGE>
Contents
About the Funds
Overview of the Funds
Financial Highlights
Investment Objectives and Policies
How the Funds are Managed
Performance of the Funds
About Your Account
How to Buy Shares
How to Sell Shares
Dividends, Capital Gains and Taxes
Appendix A: Description of Terms
Appendix B: Description of Securities Ratings
<PAGE>
ABOUT THE FUNDS
Overview of the Funds
Some of the important facts about the Funds are summarized below,
with references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing. Keep the Prospectus for
reference after you invest.
- What Are the Funds' Investment Objectives? Money Fund's
investment objective is to seek maximum current income from investments
in "money market" securities consistent with low capital risk and the
maintenance of liquidity. High Income Fund's investment objective is to
seek a high level of current income from investment in high yield fixed-
income securities. Bond Fund's investment objective is to seek a high
level of current income from investment in high yield fixed-income
securities rate "baa" or better by Moody's or "BBB" or better by Standard
& Poor's. As a secondary investment objective, Bond Fund seeks capital
growth when consistent with its primary objective. Capital Appreciation
Fund's investment objective is to achieve capital appreciation by
investing in "growth-type" companies. Growth Fund's investment objective
is to seek to achieve capital appreciation by investing in securities of
well-known established companies. Multiple Strategies Fund's investment
objective is to seek 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. Growth & Income Fund's
investment objective is to seek a total return (which includes growth in
the value of its shares as well as current income) from equity and debt
securities. Global Securities Fund's investment objective is to seek
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. Strategic Bond Fund's investment objective
is to seek 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.
- What Do the Funds Invest In? To seek their respective investment
objectives, the Funds invest as follows. Money Fund primarily invests in
money market securities. High Income Fund primarily invests in high yield
fixed-income securities, including unrated securities or high risk
securities in the lower rating categories, commonly known as "junk bonds."
Bond Fund primarily invests in high yield fixed-income securities rated
"Baa" or better by Moody's or "BBB" or better by Standard & Poor's.
Capital Appreciation Fund primarily invests in "growth-type" companies.
Growth Fund primarily invests in securities of well-known established
companies. Multiple Strategies Fund primarily invests in common stocks
and other equity securities, bonds and other debt securities, and money
market securities. Growth & Income Fund invests primarily in equity and
debt securities and focuses from time to time on small to medium
capitalization companies. Global Securities Fund primarily invests in
securities of foreign issuers, "growth-type" companies, cyclical
industries and special situations. Strategic Bond Fund primarily invests
in foreign government and corporate debt securities, U.S. Government
securities, and lower-rated high yield domestic and foreign debt
securities, commonly know as "junk bonds." These investments are more
fully explained for each Fund in "Investment Objectives and Policies,"
starting on page ___.
- Who Manages the Funds? The Funds' investment adviser is
OppenheimerFunds, Inc. (the "Manager"), which (including a subsidiary)
advises investment company portfolios having over $50 billion in assets.
Each Fund's portfolio manager is primarily responsible for the selection
of securities of that Fund. The portfolio managers are as follows: for
Money Fund, Dorothy Warmack; for High Income Fund, Bond Fund, Multiple
Strategies Fund and Strategic Bond Fund, David Negri (joined by Richard
Rubinstein for Multiple Strategies Fund and by Arthur Steinmetz for
Strategic Bond Fund); for Capital Appreciation Fund, Paul LaRocco; for
Growth Fund, Jane Putnam; for Global Securities Fund, William Wilby; and
for Growth & Income Fund, Robert C. Doll, Jr. and Robert J. Milnamow. The
Manager is paid an advisory fee by each Fund, based on its assets. The
Trust's Board of Trustees, elected by shareholders, oversees the
investment adviser and the portfolio manager. Please refer to "How The
Funds Are Managed," starting on page ____ for more information about the
Manager and its fees.
- How Risky Are The Funds? While different types of investments
have risks that differ in type and magnitude, all investments carry risk
to some degree. Changes in overall market movements or interest rates,
or factors affecting a particular industry or issuer, can affect the value
of the Funds' investments and their price per share. Equity investments
are generally subject to a number of risks including the risk that values
will fluctuate as a result of changing expectations for the economy and
individual issuers, and stocks which are small to medium size in
capitalization may fluctuate more than large capitalization stocks. For
both equity and income investments, foreign investments are subject to the
risk of adverse currency fluctuation and additional risks and expenses in
comparison to domestic investments. In comparing levels of risk among the
equity and equity- income funds, Growth Fund is most conservative,
followed by Multiple Strategies Fund, Growth & Income Fund, Capital
Appreciation Fund and Global Securities Fund. Fixed-income investments
are generally subject to the risk that values will fluctuate with
inflation, with lower-rated fixed-income investments being subject to a
greater risk that the issuer will default in its interest or principal
payment obligations. In comparing levels of risk among the fixed-income
funds, Bond Fund is most conservative, followed by Strategic Bond Fund and
High Income Fund. Money Fund is the most conservative of all nine Funds
in that Money Fund intends to maintain a stable net asset value, although
there is no assurance that it will be able to do so.
- How Can I Buy or Sell 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. Account owners should
refer to the accompanying Account Prospectus on how to buy or sell shares
of the Funds.
- How Have the Funds Performed? Money Fund, High Income Fund, Bond
Fund and Strategic Bond Fund measure their performance by quoting their
yields. All of the Funds with the exception of Money Fund may measure
their performance by quoting average annual total return and cumulative
total return, which measure historical performance. Those returns can be
compared to the returns (over similar periods) of other funds. Of course,
other funds may have different objectives, investments, and levels of
risk. The performance of all the Funds except Money Fund can also be
compared to broad market indices, which we have done starting on page ___.
Please remember that past performance does not guarantee future results.
<PAGE>
Financial Highlights
The tables on the following pages present selected financial
information, including per share data and expense ratios and other data
about the Funds, and are based on each Fund's average net assets. This
information has been audited by Deloitte & Touche LLP, the Funds'
independent auditors, whose report on the Funds' financial statements for
the fiscal year ended December 31, 1995, is included in the Statement of
Additional Information.
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Oppenheimer
Money
Fund
- -------------------------------------------------------------------------------
Year Ended
December 31, 1994 1993 1992
1991
1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $1.00 $1.00 $1.00
$1.00 $1.00
Income from investment operations - net
investment income and net realized gain
on investments .06 .04 .03 .04
.06
Dividends and distributions to shareholders (.06) (.04) (.03)
(.04) (.06)
- -------------------------------------------------------------------------------
Net asset value, end of year $1.00 $1.00 $1.00
$1.00 $1.00
=============================================
=============
=====================
TOTAL RETURN, AT NET ASSET VALUE (1) 5.62% 4.25%
3.09% 3.93%
6.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands) $65,386 $89,671 $61,221
$58,266 $58,709
Average net assets (in thousands) $75,136 $90,264 $57,654
$61,317 $75,747
Ratios to average net assets:
Net investment income 5.52% 4.18% 3.12%
3.76% 5.97%
Expenses .51% .43% .43%
.50% .49%
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
1990 1989 1988 1987 1986
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00
$1.00
Income from investment operations - net
investment income and net realized gain
on investments .08 .09 .07 .06
.06
Dividends and distributions to shareholders (.08) (.09) (.07) (.06)
(.06)
-----------------------------------------------------------------------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00
$1.00
=============================================
=============
=============
TOTAL RETURN, AT NET ASSET VALUE (1) 7.84% 9.56% 6.96%
6.74% 6.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands) $89,143 $68,440 $69,468 $42,538
$28,218
Average net assets (in thousands) $82,966 $67,586 $60,241 $35,138
$12,914
Ratios to average net assets:
Net investment income 7.80% 8.82% 7.31% 6.33%
5.68%
Expenses .51% .53% .55% .59%
.75%
</TABLE>
1. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in
additional shares on the reinvestment date, and redemption at the net
asset value calculated on the last business day of the fiscal period.
Total returns are not annualized for periods of less than one full year.
Total returns reflect changes in net investment income only. Total return
information does not reflect expenses that apply at the separate account
level or to related insurance products. Inclusion of these charges would
reduce the total return figures for all periods shown.
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
High Income
Fund
- -------------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $9.79 $11.02 $9.74
$9.40 $7.90
Income (loss) from investment operations:
Net investment income .98 .94 .82
1.19 1.28
Net realized and unrealized gain (loss) on
investments and foreign currency .94 (1.27) 1.65
.43 1.30
transactions
- ------------------------------------------------------------------------------
Total income (loss) from investment
operations 1.92 (.33) 2.47 1.62
2.58
- -------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.08) (.66) (1.19)
(1.28) (1.08)
Distributions from net realized gain on
investments and foreign currency
transactions -- (.24) -- --
--
- -------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.08) (.90) (1.19) (1.28)
(1.08)
- -------------------------------------------------------------------------------
Net asset value, end of period $10.63 $ 9.79 $11.02
$9.74 $9.40
=============================================
=============
=====================
TOTAL RETURN, AT NET ASSET VALUE(2) 20.37% (3.18)%
26.34% 17.92%
33.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $133,451 $ 95,698 $93,011
$40,817 $27,308
Average net assets (in thousands) $115,600 $101,096 $67,000
$36,861 $23,663
Ratios to average net assets:
Net investment income 9.81% 9.15% 10.50%
12.08% 14.26%
Expenses .81% .67% .68%
.73% .75%
Portfolio turnover rate(4) 107.1% 110.1% 135.7%
144.2% 108.0%
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
1990 1989 1988 1987
1986(1)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $8.59 $9.30 $9.14 $10.04
$10.00
Income (loss) from investment operations:
Net investment income 1.21 1.09 1.12 1.30
.72
Net realized and unrealized gain (loss) on
investments and foreign currency (.82) (.65) .23 (.51)
(.24)
transactions
-------------------------------------------------------------------------
Total income (loss) from investment
operations .39 .44 1.35 .79
.48
-------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.08) (1.08) (1.07) (1.55)
(.44)
Distributions from net realized gain on
investments and foreign currency
transactions -- (.07) (.12) (.14)
--
-------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.08) (1.15) (1.19) (1.69)
(.44)
-------------------------------------------------------------------------
Net asset value, end of period $7.90 $8.59 $9.30 $9.14
$10.04
=============================================
=============
===============
TOTAL RETURN, AT NET ASSET VALUE(2) 4.65% 4.84%
15.58% 8.07%
4.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $19,172 $23,698 $25,551 $21,768
$14,833
Average net assets (in thousands) $21,493 $26,040 $24,530 $20,637
$ 8,036
Ratios to average net assets:
Net investment income 14.32% 11.52% 11.94%
13.13% 11.18%(3)
Expenses .75% .75% .75% .75%
.75%(3)
Portfolio turnover rate(4) 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. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Bond
Fund
- -----------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.78 $11.65 $10.99
$11.15 $10.33
Income (loss) from investment operations:
Net investment income .72 .76 .65 .87
.95
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions 1.07 (.98) .76 (.17)
.80
- -----------------------------------------------------------------------------
Total income (loss) from investment
operations 1.79 (.22) 1.41 .70
1.75
- -----------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.73) (.62) (.75)
(.86) (.93)
Distributions from net realized gain on
investments and foreign currency
transactions -- (.03) -- --
--
- -----------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.73) (.65) (.75) (.86)
(.93)
- -----------------------------------------------------------------------------
Net asset value, end of period $11.84 $10.78 $11.65
$10.99 $11.15
=============================================
=============
===================
TOTAL RETURN, AT NET ASSET VALUE(1) 17.00% (1.94)%
13.04% 6.50%
17.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $211,232 $135,067 $111,846
$63,354 $32,762
Average net assets (in thousands) $170,929 $121,884 $ 87,215
$45,687 $22,169
Ratios to average net assets:
Net investment income 6.91% 7.30% 7.20%
7.81% 8.73%
Expenses .80% .57% .46%
.56% .64%
Portfolio turnover rate(2) 79.4% 35.1% 36.3%
41.3% 7.6%
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
1990 1989 1988 1987
1986
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.49 $10.15 $10.19
$11.15 $11.27
Income (loss) from investment operations:
Net investment income .97 .98 .94 .97
.97
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (.18) .32 (.05) (.71)
.09
- ----------------------------------------------------------------------------
Total income (loss) from investment
operations .79 1.30 .89 .26
1.06
- ----------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.95) (.96) (.93)
(1.17) (1.03)
Distributions from net realized gain on
investments and foreign currency
transactions -- -- -- (.05)
(.15)
- ----------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.95) (.96) (.93) (1.22)
(1.18)
- ----------------------------------------------------------------------------
Net asset value, end of period $10.33 $10.49 $10.15
$10.19 $11.15
=============================================
=============
==================
TOTAL RETURN, AT NET ASSET VALUE(1) 7.92% 13.32%
8.97% 2.53%
10.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $16,576 $13,422 $ 9,989
$10,415 $7,377
Average net assets (in thousands) $15,088 $11,167 $11,028
$ 8,748 $4,647
Ratios to average net assets:
Net investment income 9.30% 9.34% 9.08%
9.17% 8.71%
Expenses .61% .64% .70%
.75% .75%
Portfolio turnover rate(2) 7.4% 5.4% 36.3%
5.9% 27.7%
</TABLE>
1. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
2. 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.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Capital
Appreciation
Fund
- ------------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $25.95 $31.64 $26.04
$23.24 $15.24
Income (loss) from investment operations:
Net investment income .11 .10 .05 .06
.08
Net realized and unrealized gain (loss) on
investments 8.29 (2.22) 6.71 3.43
8.18
- ------------------------------------------------------------------------------
Total income (loss) from investment operations 8.40 (2.12) 6.76
3.49 8.26
- ------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.09) (.04) (.06)
(.14) (.26)
Distributions from net realized gain on
investments (.05) (3.53) (1.10) (.55)
--
- ------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.14) (3.57) (1.16) (.69)
(.26)
- ------------------------------------------------------------------------------
Net asset value, end of period $34.21 $25.95 $31.64
$26.04 $23.24
=============================================
=============
====================
TOTAL RETURN, AT NET ASSET VALUE(2) 32.52% (7.59)%
27.32% 15.42%
54.72%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $325,404 $185,774 $136,885
$83,335 $49,371
Average net assets (in thousands) $240,730 $153,832 $98,228
$56,371 $34,887
Ratios to average net assets:
Net investment income .47% .50% .23%
.30% .81%
Expenses .78% .57% .47%
.54% .63%
Portfolio turnover rate(4) 125.5% 96.5% 122.8%
78.9% 122.3%
Average brokerage commission rate(5) $0.18 -- --
-- --
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
1990 1989 1988 1987
1986(1)
- -------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $20.40 $16.31 $14.39
$13.12 $16.21
Income (loss) from investment operations:
Net investment income .32 .50 .33 .21
.12
Net realized and unrealized gain (loss) on
investments (3.54) 3.93 1.60 1.67
(1.24)
- -------------------------------------------------------------------------
Total income (loss) from investment operations (3.22) 4.43 1.93
1.88 (1.12)
- -------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.53) (.34) --
(.34) (.21)
Distributions from net realized gain on
investments (1.41) -- (.01) (.27)
(1.76)
- -------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.94) (.34) (.01) (.61)
(1.97)
- -------------------------------------------------------------------------
Net asset value, end of period $15.24 $20.40 $16.31
$14.39 $13.12
=============================================
=============
===============
TOTAL RETURN, AT NET ASSET VALUE(2) (16.82)% 27.57%
13.41% 14.34%
(1.65)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $23,295 $27,523 $13,667
$9,692 $4,549
Average net assets (in thousands) $24,774 $21,307 $13,239
$8,598 $3,099
Ratios to average net assets:
Net investment income 1.93% 3.27% 2.13%
1.68% 2.36%(3)
Expenses .71% .68% .73%
.75% 1.01%(3)
Portfolio turnover rate(4) 222.0% 130.5% 128.7%
138.7% 100.1%
Average brokerage commission rate(5) -- -- --
- -- --
</TABLE>
1. For the six months ended December 31, 1986. Operating results prior
to August 15, 1986 were achieved by Centennial Capital Appreciation Fund,
a separate investment company acquired by OCAP on August 14, 1986.
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Growth
Fund
- -----------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $17.68 $17.70 $16.96
$15.17 $12.54
Income (loss) from investment operations:
Net investment income .25 .22 .46 .16
.30
Net realized and unrealized gain (loss) on
investments 6.10 (.05) .74 1.99
2.82
- -----------------------------------------------------------------------------
Total income (loss) from investment
operations 6.35 .17 1.20 2.15
3.12
- -----------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.22) (.15) (.14)
(.36) (.49)
Distributions from net realized gain on
investments and foreign currency
transactions (.26) (.04) (.32) --
--
- -----------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.48) (.19) (.46) (.36)
(.49)
- -----------------------------------------------------------------------------
Net asset value, end of period $23.55 $17.68 $17.70
$16.96 $15.17
=============================================
=============
===================
TOTAL RETURN, AT NET ASSET VALUE(1) 36.65% .97%
7.25% 14.53%
25.54%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $117,710 $63,283 $56,701
$36,494 $22,032
Average net assets (in thousands) $88,803 $59,953 $46,389
$25,750 $18,810
Ratios to average net assets:
Net investment income 1.46% 1.38% 1.13%
1.36% 2.82%
Expenses .79% .58% .50%
.61% .70%
Portfolio turnover rate(2) 58.2% 53.8% 12.6%
48.7% 133.9%
Average brokerage commission rate(3) $0.07 -- --
-- --
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
1990 1989 1988 1987
1986
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $16.38 $13.64 $11.21
$12.53 $10.95
Income (loss) from investment operations:
Net investment income .56 .66 .29 .20
.13
Net realized and unrealized gain (loss) on
investments (1.79) 2.50 2.19 .24
1.76
- ---------------------------------------------------------------------------
Total income (loss) from investment
operations (1.23) 3.16 2.48 .44
1.89
- ---------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.62) (.35) --
(.34) (.15)
Distributions from net realized gain on
investments and foreign currency
transactions (1.99) (.07) (.05) (1.42)
(.16)
- ---------------------------------------------------------------------------
Total dividends and distributions to
shareholders (2.61) (.42) (.05) (1.76)
(.31)
- ---------------------------------------------------------------------------
Net asset value, end of period $12.54 $16.38 $13.64
$11.21 $12.53
=============================================
=============
=================
TOTAL RETURN, AT NET ASSET VALUE(1) (8.21)% 23.59%
22.09% 3.32%
17.76%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $15,895 $19,301 $17,746
$14,692 $8,287
Average net assets (in thousands) $17,235 $18,596 $15,585
$15,121 $3,744
Ratios to average net assets:
Net investment income 4.09% 3.72% 2.39%
1.56% 2.62%
Expenses .71% .70% .70%
.75% .75%
Portfolio turnover rate(2) 267.9% 148.0% 132.5%
191.0% 100.9%
Average brokerage commission rate(3) -- -- --
- -- --
</TABLE>
1. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
2. 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.
3. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Multiple
Strategies
Fund
- ------------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.91 $13.88 $12.47
$11.96 $10.90
Income (loss) from investment operations:
Net investment income .66 .63 .55 .55
.69
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions 2.00 (.90) 1.41 .50
1.15
- ------------------------------------------------------------------------------
Total income (loss) from investment operations 2.66 (.27) 1.96
1.05 1.84
- ------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.65) (.60) (.55)
(.54) (.78)
Distributions from net realized gain on
investments, options written and foreign
currency transactions (.37) (.10) -- --
--
- ------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.02) (.70) (.55) (.54)
(.78)
- ------------------------------------------------------------------------------
Net asset value, end of period $14.55 $12.91 $13.88
$12.47 $11.96
=============================================
=============
====================
TOTAL RETURN, AT NET ASSET VALUE(2) 21.36% (1.95)%
15.95% 8.99%
17.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $381,263 $292,067 $250,290
$159,464 $124,634
Average net assets (in thousands) $344,745 $279,949 $199,954
$139,011 $117,000
Ratios to average net assets:
Net investment income 4.81% 4.90% 4.44%
4.63% 5.95%
Expenses .77% .56% .48%
.55% .54%
Portfolio turnover rate(4) 39.0% 31.4% 32.4%
57.8% 80.3%
Average brokerage commission rate(5) $0.04 -- --
-- --
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------
1990 1989 1988 1987(1)
-----------------------------------------------------------------
<S> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.30 $11.58 $10.04
$10.00
Income (loss) from investment operations:
Net investment income .73 .73 .66
.44
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions (.97) 1.04 1.53
.07
-----------------------------------------------------------------
Total income (loss) from investment operations (.24) 1.77 2.19
.51
-----------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.70) (.68) (.65)
(.43)
Distributions from net realized gain on
investments, options written and foreign
currency transactions (.46) (.37) --
(.04)
-----------------------------------------------------------------
Total dividends and distributions to
shareholders (1.16) (1.05) (.65)
(.47)
-----------------------------------------------------------------
Net asset value, end of period $10.90 $12.30 $11.58
$10.04
=============================================
=============
=======
TOTAL RETURN, AT NET ASSET VALUE(2) (1.91)% 15.76%
22.15% 3.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $118,888 $121,286 $78,386
$53,291
Average net assets (in thousands) $123,231 $101,057 $64,298
$34,256
Ratios to average net assets:
Net investment income 6.53% 6.36% 6.18%
6.12%(3)
Expenses .55% .57% .58
.65%(3)
Portfolio turnover rate(4) 99.2% 66.9% 110.0%
46.9%
Average brokerage commission rate(5) -- -- --
--
</TABLE>
1. For the period from February 9, 1987 (commencement of Operations) to
December 31, 1987.
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, And redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Global Securities
Fund
- ----------------------------------------------------------------
Year Ended
December 31,
1995 1994
1993
- -----------------------------------------------------------------
<S> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $15.09 $16.30
$9.57
Income (loss) from investment operations:
Net investment income .12 .04
(.02)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions .19 (.96)
6.75
- -----------------------------------------------------------------
Total income (loss) from investment operations .31 (.92)
6.73
- -----------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.04)
--
Distributions from net realized gain on investments and
foreign currency transactions (.40) (.25)
--
- -----------------------------------------------------------------
Total dividends and distributions to shareholders (.40) (.29)
--
- -----------------------------------------------------------------
Net asset value, end of period $15.00 $15.09
$16.30
=============================================
=============
=======
TOTAL RETURN, AT NET ASSET VALUE(2) 2.24%
(5.72)%
70.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $360,979 $297,842
$96,425
Average net assets (in thousands) $332,336 $214,545
$31,696
Ratios to average net assets:
Net investment income .86% .54%
.72%
Expenses .89% .91%
.92%
Portfolio turnover rate(4) 131.3% 70.4%
65.1%
Average brokerage commission rate(5) $0.01 --
--
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
1992 1991 1990(1)
- -----------------------------------------------------------------
<S> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.38 $10.04
$10.00
Income (loss) from investment operations:
Net investment income .07 .04
- --
Net realized and unrealized gain (loss) on investments
and foreign currency transactions (.80) .30
.04
- ---------------------------------------------------------------
Total income (loss) from investment operations (.73) .34
.04
- ---------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.04) --
--
Distributions from net realized gain on investments and
foreign currency transactions (.04) --
- --
- ---------------------------------------------------------------
Total dividends and distributions to shareholders (.08) --
--
- ---------------------------------------------------------------
Net asset value, end of period $9.57 $10.38
$10.04
=============================================
=============
=====
TOTAL RETURN, AT NET ASSET VALUE(2) (7.11)%
3.39% .40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $13,537 $7,339
$ 432
Average net assets (in thousands) $11,181 $3,990
$ 263
Ratios to average net assets:
Net investment income 1.04% .75%
.08%(3)
Expenses 1.06% 1.32%
6.84%(3)
Portfolio turnover rate(4) 34.1% 29.5%
0.0%
Average brokerage commission rate(5) -- --
--
</TABLE>
1. For the period from November 12, 1990 (commencement of operations) to
December 31, 1990.
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Strategic Bond
Fund
--------------------------------------------------------
Year Ended
December 31,
1995 1994 1993(1)
--------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $4.60 $5.12 $5.00
Income (loss) from investment operations:
Net investment income .38 .35 .10
Net realized and unrealized gain (loss) on investments,
options written and foreign currency transactions .30 (.54) .11
--------------------------------------------------------
Total income (loss) from investment operations .68 (.19) .21
--------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.37) (.32) (.09)
Distributions from net realized gain on investments -- -- --
Distributions in excess of net realized gain on investments,
options written and foreign currency transactions -- (.01) --
--------------------------------------------------------
Total dividends and distributions to shareholders (.37) (.33) (.09)
--------------------------------------------------------
Net asset value, end of period $4.91 $4.60 $5.12
=============================================
===========
TOTAL RETURN, AT NET ASSET VALUE(2) 15.33%
(3.78)% 4.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $60,098 $20,320 $9,887
Average net assets (in thousands) $37,698 $15,389 $4,259
Ratios to average net assets:
Net investment income 9.32% 8.36%
5.67%(3)
Expenses .85% .87% .96%(3)
Portfolio turnover rate(4) 87.0% 136.6% 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 in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Growth & Income
Fund
---------------
Year Ended
December 31,
1995(1)
---------
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.00
Income (loss) from investment operations:
Net investment income .01
Net realized and unrealized gain (loss) on investments,
options written and foreign currency transactions 2.52
---------
Total income (loss) from investment operations 2.53
---------
Dividends and distributions to shareholders:
Dividends from net investment income (.02)
Distributions from net realized gain on investments --
Distributions in excess of net realized gain on investments,
options written and foreign currency transactions --
---------
Total dividends and distributions to shareholders (.02)
---------
Net asset value, end of period $12.51
=========
TOTAL RETURN, AT NET ASSET VALUE(2) 25.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $4,288
Average net assets (in thousands) $1,809
Ratios to average net assets:
Net investment income 0.50%(3)
Expenses 2.07%(3)
Portfolio turnover rate(4) 23.7%
Average brokerage commission rate(5) $0.34
</TABLE>
1. For the period from July 5, 1995 (commencement of operations) to
December 31, 1995
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
<PAGE>
Investment Objectives and Policies
Investment Objective and Policies - Money Fund. The objective of Money
Fund is to seek the maximum current income from investments in "money
market" securities consistent with low capital risk and the maintenance
of liquidity. The Securities and Exchange Commission Rule 2a-7 ("Rule 2a-
7") under 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 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 reassessment
of the credit risk presented by a security and may require its sale. See
"Investment Objectives 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 the Manager, 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 by 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 Rule 2a-7. For further information,
see "Foreign Securities" and "Other 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 Objectives and 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 (including 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
Investors 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, 1995 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, 0.34%; AA, 0.22%; BBB,
1.85%; BB, 9.14%; B, 39.45%; CCC, 13.37%; C, 0.93%; and D, 0.53%. 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 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
generally 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, 1995, contained domestic and foreign corporate bonds 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, 0.30%; AA,
0.07%; BBB, 0.69%; BB, 5.45%; B, 14.18%; CCC, 4.63%; C, 0.42%; and D,
0.11%. 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. 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.
Other Fixed-Income Strategies and Techniques. High Income Fund, Bond
Fund and Strategic Bond Fund (collectively, the "Income Funds") can also
use the investment techniques and strategies described below. The
Statement of Additional Information contains more information about these
practices.
- International Securities. The Income Funds 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
and special risks of "emerging markets" is set forth below under "Other
Investment Techniques and Strategies - 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, the Income Funds will attempt to augment these
yields by writing covered call options against them. See "Hedging,"
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 Funds 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 Income Funds may invest up to 50% of their
total assets at the time of purchase in zero coupon securities issued by
either corporations or the U.S. Treasury.
- Domestic Securities. The Income Funds' 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 Income Funds' 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 Income Funds may also invest in CMOs that are "stripped." That
means that the security is divided into two parts, one of which receives
some or all of the principal payments (and is known as a "P/O") and the
other which receives some or all of the interest (and is known as an
"I/O"). P/Os and I/Os are generally referred to as "derivative
investments," discussed further below.
The yield to maturity on the class that receives only interest is
extremely sensitive to the rate of payment of the principal on the
underlying mortgages. Principal prepayments increase that sensitivity.
Stripped securities that pay "interest only" are therefore subject to
greater price volatility when interest rates change, and they have the
additional risk that if the underlying mortgages are prepaid, the Fund
will lose the anticipated cash flow from the interest on the prepaid
mortgages. That risk is increased when general interest rates fall, and
in times of rapidly falling interest rates, the Fund might receive back
less than its investment.
The value of "principal only" securities generally increases as
interest rates decline and prepayment rates rise. The price of these
securities is typically more volatile than that of coupon-bearing bonds
of the same maturity.
Stripped securities are generally purchased and sold by institutional
investors through investment banking firms. At present, established
trading markets have not yet developed for these securities. Therefore,
some stripped securities may be deemed "illiquid." If any Fund holds
illiquid stripped securities, the amount it can hold will be subject to
its investment policy limiting investments in illiquid securities to 15%
of that Fund's assets.
The Income Funds may also enter into "forward roll" transactions with
banks or other buyers that provide for future delivery of the mortgage-
backed securities in which the Funds may invest. The Funds are required
to identify cash, U.S. Government securities or other high-grade debt
securities to its custodian bank in an amount equal to its obligation
under the forward roll. The main risk of this investment strategy is risk
of default by the counterparty.
The Income Funds 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 yields 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 Objectives and Policies - Capital Appreciation Fund, Growth
Fund, Multiple Strategies Fund, Growth & Income 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, high yield securities,
participation interests, asset-backed securities, private-label mortgage-
backed securities and CMOs, zero coupon securities and U.S. Government
obligations, described above under "Investment Objectives and Policies -
High Income Fund, Bond Fund and Strategic Bond Fund" and under
"Participation Interests" below) and cash and cash equivalents (described
above as the types of instruments in which the Money Fund may invest).
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.
Growth & Income Fund. The objective of Growth & Income Fund is to seek
a high total return, which includes growth in the value of its shares as
well as current income from equity and debt securities. In seeking that
objective, Growth & Income Fund may invest in equity and debt securities.
Its equity investments will include common stocks, preferred stocks,
convertible securities and warrants. Its debt securities will include
bonds, participation interests, asset-backed securities, private-label
mortgage-backed securities and CMOs, zero coupon securities and U.S.
government obligations. From time to time Growth & Income Fund may focus
on small to medium capitalization issuers, the securities of which may be
subject to greater price volatility than those of larger capitalized
issuers.
The composition of Growth & Income Fund's portfolio among equity and
fixed-income 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 investments. Accordingly,
there is neither a minimum nor a maximum percentage of Growth & Income
Fund's assets that may, at any given time, be invested in either type of
investment. In the event future economic or financial conditions
adversely affect equity securities, it is expected that Growth & Income
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).
Global Securities Fund. The objective of 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 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
"Other Investment Techniques and Strategies - 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. See
"Investment Policies and Strategies - 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.
- Can the Funds' Investment Objectives and Policies Change? The
Funds have investment objectives, described above, as well as investment
policies each follows to try to achieve its objectives. Additionally, the
Funds use certain investment techniques and strategies in carrying out
those investment policies. The Funds' investment policies and techniques
are not "fundamental" unless this Prospectus or the Statement of
Additional Information says that a particular policy is "fundamental."
Each Fund's investment objectives are fundamental policies.
The Trust's Board of Trustees may change non-fundamental policies
without shareholder approval, although significant changes will be
described in amendments to this Prospectus. Fundamental policies are those
that cannot be changed without the approval of a "majority" of the Fund's
outstanding voting shares. The term "majority" is defined in the
Investment Company Act to be a particular percentage of outstanding voting
shares (and this term is explained in the Statement of Additional
Information).
Other Investment Techniques and Strategies. Some of the Funds can also use
the investment techniques and strategies described below. These
techniques involve certain risks. The Statement of Additional Information
contains more information about these practices, including limitations on
their use that are designed to reduce some of the risks.
- Special Risks - Borrowing for Leverage. From time to time, Capital
Appreciation Fund, Strategic Bond Fund, Growth Fund, Multiple Strategies
Fund, Growth & Income Fund and Global Securities Fund may borrow money
from banks to buy securities. These Funds will borrow only if they can
do so without putting up assets as security for a loan. This is a
speculative investment method known as "leverage." This investing
technique may subject the Fund to greater risks and costs than funds that
do not borrow. These risks may include the possibility that a Fund's net
asset value per share will fluctuate more than funds that don't borrow,
since a Fund pays interest on borrowings and interest expense affects a
Fund's share price and yield. 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. Borrowing for Leverage is subject to regulatory limits
described in more detail in "Borrowing" in the Statement of Additional
Information.
Each of the above Funds has undertaken to limit borrowing by that
Fund 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.
- Investments In Small, Unseasoned Companies. Money Fund, Capital
Appreciation Fund, Multiple Strategies Fund, Growth & Income Fund, Growth
Fund, Global Securities Fund and Strategic Bond Fund may each invest in
securities of small, unseasoned companies. These are companies that have
been in operation for less than three years, counting the operations of
any predecessors. Securities of these companies may have limited
liquidity (which means that the Fund may have difficulty selling them at
an acceptable price when it wants to) and the prices of these securities
may be volatile. 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,
Growth & Income Fund, Global Securities Fund and Strategic Bond Fund are
not subject to this restriction.
- Participation Interests. Strategic Bond Fund, Global Securities
Fund, High Income Fund and Multiple Strategies Fund and Growth & Income
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 the banks
or brokers that have made the loan or are members of the lending
syndicate. No more than 5% of a Fund's net assets can be invested in
participation interests of the same borrower. The Manager has set certain
creditworthiness standards for issuers of loan participations, and
monitors their creditworthiness. The value of loan participation
interests 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 Fund could experience a decline in the net asset
value of its shares. 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 subject to each
Fund's limitations on investments in illiquid securities. See "Illiquid
and Restricted Securities" below.
- 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, and each Fund other
than Money Fund may purchase securities issued by U.S. corporations
denominated in non-U.S. currencies. Money Fund may invest in certain
dollar-denominated foreign securities which are "Eligible Securities" as
described above. 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. 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, other than
in hedging transactions (see "Hedging" below).
It is currently intended that each Fund (other than Global Securities
Fund, Multiple Strategies Fund, Growth & Income 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.
Global Securities Fund, Growth & Income Fund and Strategic Bond Fund have
no restrictions on the amount of their 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' currencies 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.
- Special Risks of "Emerging Markets". Investments in securities
traded in "emerging markets" (which are trading markets that are
relatively new in countries with developing economies) involve more risks
than other foreign securities. Emerging markets may have extended
settlement periods for securities transactions so that a Fund might not
receive the repayment of principal or income on its investments on a
timely basis, which could affect its net asset value. There may be a lack
of liquidity for emerging market securities. Interest rates and foreign
currency exchange rates may be more volatile. Government limitations on
foreign investments may be more likely to be imposed than in more
developed countries. Emerging markets may respond in a more volatile
manner to economic changes than those of more developed countries.
- Warrants and Rights. Warrants basically are options to purchase
stock at set prices that are valid for a limited period of time. Rights
are options to purchase securities, normally granted to current holders
by the issuer. Each of the Funds (except Money Fund) may invest up to 5%
of its total assets in warrants and rights. That 5% does not apply to
warrants and rights that have been acquired as part of units with other
securities or that were 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 about these investments, 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. In a repurchase transaction, the Fund buys a security and
simultaneously sells it to the vendor for delivery at a future date.
Repurchase agreements must be fully collateralized. However, if the vendor
fails to pay the resale price on the delivery date, the Fund may incur
costs in disposing of the collateral and may experience losses if there
is any delay in its ability to do so. No Fund will enter into a
repurchase agreement that causes more than 15% of its net assets (10% of
net assets for Money Fund) to be subject to repurchase agreements having
a maturity beyond seven days. There is no limit on the amount of a Fund's
net assets that may be subject to repurchase agreements of seven days or
less.
- Illiquid and Restricted Securities. Under the policies and
procedures established by the Board of Trustees, the Manager determines
the liquidity of certain 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 invest more than 15% of its net assets in illiquid
or restricted securities; no Fund presently intends to invest more than
10% of its net assets in illiquid or 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; it does not apply to certain restricted
securities that are eligible for resale to qualified institutional
purchasers.
- Loans of Portfolio Securities. To attempt to increase its income,
each Fund may lend its portfolio securities to brokers, dealers and other
financial institutions. Each Fund must receive collateral for such loans.
These loans are limited to 25% of the Fund's net assets and are subject
to other conditions described in the Statement of Additional Information.
The Funds presently do not intend to lend portfolio securities, but if any
Fund does, the value of securities loaned is not expected to exceed 5% of
the value of that Fund's total assets.
- "When-Issued" or Delayed Delivery Transactions. Each Fund may
purchase securities on a "when-issued" basis and may purchase or sell
securities on a "delayed delivery" basis. These terms refer to securities
that have been created and for which a market exists, but which are not
available for immediate delivery. There may be a risk of loss to a Fund
if the value of the security changes prior to the settlement date.
- Hedging. As described below, the Funds (other than Money Fund)
may purchase and sell certain kinds of futures contracts, put and call
options, forward contracts, and options on futures and broadly-based stock
or bond indices, or enter into interest rate swap agreements. These are
all referred to as "hedging instruments." The Funds do not use hedging
instruments for speculative purposes, and have limits on the use of them,
described below. The hedging instruments the Funds may use are described
below and in greater detail in "Other Investment Techniques and
Strategies" in the Statement of Additional Information.
The Funds may buy and sell options, futures and forward contracts for
a number of purposes. They may do so to try to manage their exposure to
the possibility that the prices of their portfolio securities may decline,
or to establish a position in the securities market as a temporary
substitute for purchasing individual securities. High Income Fund, Bond
Fund, Multiple Strategies Fund, Growth & Income Fund and Strategic Bond
Fund may do so to try to manage their exposure to changing interest rates.
Some of these strategies, such as selling futures, buying puts and writing
covered calls, hedge the Funds' portfolios against price fluctuations.
Other hedging strategies, such as buying futures and call options,
tend to increase the Funds' exposure to the securities market. Forward
contracts are used to try to manage foreign currency risks on Funds'
foreign investments. Foreign currency options are used to try to protect
against declines in the dollar value of foreign securities the Funds own,
or to protect against an increase in the dollar cost of buying foreign
securities. Writing covered call options may also provide income to the
Funds for liquidity purposes or to raise cash to distribute to
shareholders.
- Futures. Global Securities Fund, Capital Appreciation Fund,
Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Strategic
Bond Fund may buy and sell futures contracts that relate to broadly-based
stock indices (these are referred to as Stock Index Futures). The latter
three Funds and Global Securities Fund, Bond Fund and High Income Fund may
buy and sell futures contracts that relate to broadly-based securities
indices (these are referred to as Stock Index Futures and Bond Index
Futures) or to interest rates (these are referred to as Interest Rate
Futures). These types of Futures are described in "Hedging" in the
Statement of Additional Information.
- Put and Call Options. The Funds may buy and sell certain kinds
of put options (puts) and call options (calls).
The Funds may buy calls only on securities, broadly-based stock and
bond indices, foreign currencies and Futures that the Fund is permitted
to buy and sell (as explained above) or to terminate their obligation on
a call that the Fund previously wrote. Each Fund may write (that is,
sell) covered call options on up to 100% of its assets. When a Fund
writes a call, it receives cash (called a premium). The call gives the
buyer the ability to buy the investment on which the call was written from
that Fund at the call price during the period in which the call may be
exercised. If the value of the investment does not rise above the call
price, it is likely that the call will lapse without being exercised,
while the Fund keeps the cash premium (and the investment).
The Funds may purchase put options. Buying a put on an investment
gives that Fund the right to sell the investment at a set price to a
seller of a put on that investment. The Funds can buy only those puts
that relate to (1) securities (whether or not that Fund owns such
securities), (2) Futures that the Fund is permitted to buy and sell (as
explained above), (3) broadly-based stock or bond indices or (4) foreign
currencies. A Fund can buy a put on a Future whether or not that Fund
owns the particular Future in its portfolio. A Fund may not sell a put
other than a put that it previously purchased.
The Funds may buy and sell puts and calls only if certain conditions
are met: (1) calls the Funds buy or sell must be listed on a securities
or commodities exchange, or quoted on the Automated Quotation System
("NASDAQ") of The Nasdaq Stock Market, Inc.; (2) in the case of puts and
calls on foreign currency, they must be traded on a securities or
commodities exchange, or in the over-the-counter market, or quoted by
recognized dealers in those options; (3) none of the Funds will write puts
if, as a result, more than 50% of its net assets would be required to be
segregated liquid assets; (4) each call the Funds write must be "covered"
while it is outstanding: that means a Fund must own the security on which
the call was written; calls (including calls on Futures) must be covered
by securities or other liquid assets a Fund owns and segregates to enable
it to satisfy its obligations if the call is exercised; (5) a Fund may
write calls on Futures contracts it owns, but these calls must be covered
by securities or other liquid assets the Fund owns and segregates to
enable it to satisfy its obligations if the call is exercised; (6) a call
or put option may not be purchased if the value of all of a Fund's put and
call options would exceed 5% of that Fund's total assets. No trading or
listing requirement applies to calls written by a Fund.
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.
- Forward Contracts. Forward contracts are foreign currency
exchange contracts. They are used to buy or sell foreign currency for
future delivery at a fixed price. The Funds (other than Money Fund) use
them to "lock-in" the U.S. dollar price of a security denominated in a
foreign currency that a Fund has bought or sold, or to protect against
losses from changes in the relative values of the U.S. dollar and a
foreign currency. Such Funds may also use "cross hedging," where a Fund
hedges against changes in currencies other than the currency in which a
security it holds is denominated.
- Interest Rate Swaps. Strategic Bond Fund, High Income Fund, Bond
Fund and Growth & Income Fund can also enter into interest rate swap
transactions. In an interest rate swap, a Fund and another party exchange
their right to receive or their obligation to pay interest on a security.
For example, they may swap a right to receive floating rate payments for
fixed rate payments. A Fund enters into swaps only on securities it owns.
Each of these Funds may not enter into swaps with respect to more than 50%
of its total assets. Also, each Fund will segregate liquid assets (such
as cash or U.S. Government securities) to cover any amounts it could owe
under swaps that exceed the amounts it is entitled to receive, and it will
adjust that amount daily, as needed.
Hedging instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different from what is
required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce that Fund's return. A Fund could also
experience losses if the prices of its futures and options positions were
not correlated with its other investments or if it could not close out a
position because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has special tax
effects on the Funds. There are also special risks in particular hedging
strategies. If a covered call written by a Fund is exercised on a
security that has increased in value, that Fund will be required to sell
the security at the call price and will not be able to realize any profit
if the security has increased in value above the call price. The use of
forward contracts may reduce the gain that would otherwise result from a
change in the relationship between the U.S. dollar and a foreign currency.
To limit its exposure in foreign currency exchange contracts, each Fund
limits its exposure to the amount of its assets denominated in the foreign
currency. Interest rate swaps are subject to credit risks (if the other
party fails to meet its obligations) and also to interest rate risks. The
Funds could be obligated to pay more under their swap agreements than
they receive under them, as a result of interest rate changes. These
risks are described in greater detail in the Statement of Additional
Information.
- Derivative Investments. Each Fund (other than Money Fund) can
invest in a number of different kinds of "derivative investments." Such
Funds may use some types of derivatives for hedging purposes, and may
invest in others because they offer the potential for increased income and
principal value. In general, a "derivative investment" is a specially-
designed investment whose performance is linked to the performance of
another investment or security, such as an option, future, index or
currency. In the broadest sense, derivative investments include exchange-
traded options and futures contracts (please refer to "Hedging").
One risk of investing in derivative investments is that the company
issuing the instrument might not pay the amount due on the maturity of the
instrument. There is also the risk that the underlying investment or
security might not perform the way the Manager expected it to perform.
The performance of derivative investments may also be influenced by
interest rate changes in the U.S. and abroad. All of these risks can mean
that a Fund will realize less income than expected from its investments,
or that it can lose part of the value of its investments, which will
affect that Fund's share price. Certain derivative investments held by
the Funds may trade in the over-the-counter markets and may be illiquid.
If that is the case, the Funds' investment in them will be limited, as
discussed in "Illiquid and Restricted Securities."
One type of derivative the Funds (other than Money Fund) may invest
in is an "index-linked" note. On the maturity of this type of debt
security, payment is made based on the performance of an underlying index,
rather than based on a set principal amount for a typical note. Another
derivative investment such Funds may invest in are currency-indexed
securities. These are typically short-term or intermediate-term debt
securities. Their value at maturity or the interest rates at which they
pay income are determined by the change in value of the U.S. dollar
against one or more foreign currencies or an index. In some cases, these
securities may pay an amount at maturity based on a multiple of the amount
of the relative currency movements. This variety of index security offers
the potential for greater income but at a greater risk of loss.
Other derivative investments the Funds (other than Money Fund) may
invest in include "debt exchangeable for common stock" of an issuer or
"equity-linked debt securities" of an issuer. At maturity, the debt
security is exchanged for common stock of the issuer or is payable in an
amount based on the price of the issuer's common stock at the time of
maturity. In either case there is a risk that the amount payable at
maturity will be less than the principal amount of the debt (because the
price of the issuer's common stock is not as high as was expected).
- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Funds may engage frequently in
short-term trading to try to achieve their objectives. High turnover and
short-term trading involve correspondingly greater commission expenses and
transaction costs for Capital Appreciation Fund, Growth Fund, Multiple
Strategies Fund, Growth & Income 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. The "Financial Highlights,"
above show the portfolio turnover for the past fiscal years 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, Capital Gains
and Taxes," below).
- Short Sales Against-the-Box. In a short sale, the seller does not
own the security that is sold, but normally borrows the security to
fulfill its delivery obligation. The seller later buys the security to
repay the loan, in the expectation that the price of the security will be
lower when the purchase is made, resulting in a gain. The Funds may not
sell securities short except that each Fund (except Money Fund) may sell
securities short in collateralized transactions referred to as "short
sales against-the-box", where the Funds own an equivalent amount of the
securities sold short. No more than 15% of any Fund's net assets will be
held as collateral for such short sales at any one time.
Other Investment Restrictions
Each of the Funds has certain investment restrictions which, together
with its investment objective, are fundamental policies. 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; and (5) deviate from the
percentage requirements and other restrictions listed under "Warrants and
Rights," and the first paragraph under "Special Risks-Borrowing for
Leverage." None of the percentage limitations and restrictions described
above and in the Statement of Additional Information for the Funds with
respect to writing covered calls, hedging, short sales and derivatives is
a fundamental policy.
All of the percentage restrictions described above and elsewhere in
this Prospectus, other than those described under "Other Investment
Techniques and Strategies--Special Risks-Borrowing for Leverage," apply
only at the time a Fund purchases a security. A Fund need not dispose of
a security merely because the size of the Fund's assets has changed or the
security has increased in value relative to the size of the 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. There are other fundamental policies
discussed in the Statement of Additional Information.
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.
How the Funds are Managed
Organization and History. The Trust was organized in 1984 as a
Massachusetts business trust. The Trust is an open-end, diversified
management investment company, with an unlimited number of authorized
shares of beneficial interest. It consists of nine 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, Strategic Bond Fund,
organized in 1993 and Growth & Income Fund, organized in 1995.
The Trust is governed by a Board of Trustees, which is responsible
for protecting the interests of shareholders under Massachusetts law. The
Trustees meet periodically throughout the year to oversee the Funds'
activities, review performance, and review the actions of the Manager.
"Trustees and Officers of the Trust" in the Statement of Additional
Information names the Trustees and provides more information about them
and the officers of the Trust. Although the Trust will normally not hold
annual meetings of its shareholders, it may hold shareholder meetings from
time to time on important matters, and shareholders have the right to call
a meeting to remove a Trustee or to take other action described in the
Trust's Declaration of Trust.
The Manager and Its Affiliates. The Funds are managed by the Manager,
OppenheimerFunds, Inc., which is responsible for selecting the Funds'
investments and handles its day-to-day business. The Manager carries out
its duties, subject to the policies established by the Board of Trustees,
under Investment Advisory Agreements for each Fund which state the
Manager's responsibilities. The Agreements set forth the fees paid by
each Fund to the Manager and describe the expenses that each Fund is
responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager (including a subsidiary) currently manages investment companies,
including other Oppenheimer funds, with assets of more than $50 billion
as of March 31, 1996, held in more than 2.8 million shareholder accounts.
The Manager is owned by Oppenheimer Acquisition Corp., a holding company
that is owned in part by senior officers of the Manager and controlled by
Massachusetts Mutual Life Insurance Company.
- Portfolio Managers. The Portfolio Manager of High Income Fund,
Bond Fund, Multiple Strategies Fund and Strategic Bond Fund is David P.
Negri, joined by Richard H. Rubinstein for Multiple Strategies Fund and
by Arthur P. Steinmetz for Strategic Bond Fund. They are the persons
principally responsible for the day-to-day management of those Funds since
July 1989, January 1990, July 1989 (April 1991 for Mr. Rubinstein) and May
1993, respectively. During the past five years, Messrs. Steinmetz and
Negri have also served as officers of other Oppenheimer funds. During the
past five years, Mr. Rubinstein has served as an officer of other
Oppenheimer funds and was formerly Vice President and Portfolio
Manager/Security Analyst for Oppenheimer Capital Corp., an investment
adviser. The Portfolio Manager of Global Securities Fund is William
Wilby. He has been the person principally responsible for the day-to-day
management of that Fund's portfolio since December, 1995. During the past
five years, Mr. Wilby has also served as an officer and portfolio manager
for other Oppenheimer funds, prior to which he was an international
investment strategist at Brown Brothers Harriman & Co., and a Managing
Director and Portfolio Manager at AIG Global Investors. The Portfolio
Manager of the Money Fund is Dorothy G. Warmack. On May 1, 1996, she
became the person principally responsible for the day-to-day management
of that Fund's portfolio. During the past five years, she has served as
an officer of other Oppenheimer funds. The Portfolio Manager of Growth
Fund is Jane Putnam. She has been the person principally responsible for
the day-to-day management of that Fund's portfolio since May 1994. During
the past five years, Ms. Putnam has also served as an Associate Portfolio
Manager for other Oppenheimer funds and formerly served as a portfolio
manager and equity research analyst for Chemical Bank. The Portfolio
Manager of Capital Appreciation Fund is Paul LaRocco. He has been the
person principally responsible for the day-to-day management of that
Fund's portfolio since January 1994. During the past five years, he has
also served as an Associate Portfolio Manager for other Oppenheimer funds
and formerly served as a securities analyst with Columbus Circle
Investors, prior to which he was an investment analyst for Chicago Title
& Trust Co. The Portfolio Managers of Growth & Income Fund are Robert C.
Doll, Jr. and Robert J. Milnamow. They have been the persons principally
responsible for the day-to-day management of that Fund since its inception
in July, 1995, and since November, 1995, respectively. Each of the Growth
& Income Fund Portfolio Managers is an officer of other Oppenheimer funds.
During the past five years, Mr. Milnamow was a portfolio manager with
Phoenix Securities Group. Messrs. Negri, Evans, Milnamow and Rubinstein
and Ms. Warmack are Vice Presidents of the Manager, Mr. Doll is an
Executive Vice President and Director of Equity Investments of the
Manager, Messrs. Steinmetz and Wilby are Senior Vice Presidents of the
Manager, and Ms. Putnam and Mr. LaRocco are Assistant Vice Presidents of
the Manager. Each of the Portfolio Managers named above is also a Vice
President of the Trust.
- Fees and Expenses. The monthly management fee payable to the
Manager is computed separately on the net assets of each Fund as of the
close of business each day. The management fee rates are as follows: (i)
for Money Fund: 0.450% of the first $500 million of net assets, 0.425%
of the next $500 million, 0.400% of the next $500 million, and 0.375% of
net assets over $1.5 billion; (ii) for Capital Appreciation Fund, Growth
Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities
Fund: 0.75% of the first $200 million of net assets, 0.72% of the next
$200 million, 0.69% of the next $200 million, 0.66% of the next $200
million, and 0.60% of net assets over $800 million; and (iii) for High
Income Fund, Bond Fund and Strategic Bond Fund: 0.75% of the first $200
million of net assets, 0.72% of the next $200 million, 0.69% of the next
$200 million, 0.66% of the next $200 million, 0.60% of the next $200
million, and 0.50% of net assets over $1 billion.
During the fiscal year ended December 31, 1995, 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:
Total
Management Operating
Fees Expenses(1)
Money Fund .45% .51%
High Income Fund .75% .81%
Bond Fund .75% .80%
Capital Appreciation Fund .74% .78%
Growth Fund .75% .79%
Multiple Strategies Fund .74% .77%
Global Securities Fund .74% .89%
Strategic Bond Fund .75% .85%
Growth & Income Fund(2) .75% .93%
____________________
(1) This table does not reflect expenses that apply at the separate
account level or to related insurance products.
(2) Because Growth & Income Fund is a new fund and has not completed a
full fiscal year, the expenses shown above are based on amounts estimated
to be payable in the current fiscal year. Growth & Income Fund's total
operating expenses for the period from commencement of operations (July
5, 1995) to December 31, 1995 were 2.07% (on an annualized basis) as a
percentage of net assets.
The Funds pay expenses related to their daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing
costs. Those expenses are paid out of the Funds' assets and are not paid
directly by shareholders. However, those expenses reduce the net asset
value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement is contained in the Statement of Additional Information.
There is also information about the Funds' brokerage policies and
practices in "Brokerage Policies of the Funds" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Funds' portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreements to consider whether brokers have sold shares of the Funds or
any other funds for which the Manager serves as investment adviser.
- 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 in the accompanying
Account Prospectus.
Performance of the Funds
Explanation of Performance Terminology. Money Fund uses the term "yield"
to illustrate its performance. High Income Fund, Bond Fund and Strategic
Bond Fund use the terms "yield," "total return," and "average annual total
return" to illustrate performance. All the Funds, except Money Fund, use
the terms "average annual total return" and "total return" to illustrate
their performance. This performance information may be useful to help you
see how well your investment has done and to compare it to other funds or
market indices, as we have done below.
It is important to understand that the Funds' total returns and yields
represent past performance and should not be considered to be predictions
of future returns or performance. This performance data is described
below, but more detailed information about how total returns and yields
are calculated is contained in the Statement of Additional Information,
which also contains information about other ways to measure and compare
the Funds' performance. Each Fund's investment performance will vary over
time, depending on market conditions, the composition of the portfolio and
expenses.
- Yields. 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.
Yield for High Income Fund, Strategic Bond Fund or Bond Fund 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.
- Total Returns. There are different types of total returns used to
measure each Fund's performance. Total return is the change in value of
a hypothetical investment in the Fund over a given period, assuming that
all dividends and capital gains distributions are reinvested in additional
shares. The cumulative total return measures the change in value over the
entire period (for example, ten years). An average annual total return
shows the average rate of return for each year in a period that would
produce the cumulative total return over the entire period. However,
average annual total returns do not show the Funds' actual year-by-year
performance.
How Have the Funds Performed? Below is a discussion by the Manager of the
Funds' performance during their last fiscal year ended December 31, 1995,
followed by a graphical comparison of each Fund's performance, except
Money Fund, to an appropriate broad-based market index.
Management's Discussion of Performance. During the Funds' fiscal year
ended December 31, 1995, the bond markets and the equity markets
experienced overall price increases in response to declines in interest
rates and favorable corporate profits in the face of slower economic
growth. During that period, the Manager emphasized the following
investment strategies and techniques. High Income Fund focused on the
higher quality tiers of below-investment grade bonds and sought value in
the housing, gaming and energy sectors, and invested in bonds of growth
companies such as foreign cable companies. Bond Fund reacted to a strong
rally in treasury securities by reducing its treasury allocation in favor
of increased allocations in different categories of U.S. Government and
corporate bonds. It reduced its holdings in utilities and cyclical
companies such as mining and metals companies in favor of companies
expected to experience earnings growth, such as cable, communications,
broadcasting and media firms. Capital Appreciation Fund experienced
increased investor interest in small-cap stocks beginning in the third
quarter of 1995, prior to which small-cap stocks were not participating
fully in the stock market rally. Its focus throughout the fiscal year was
on individual companies that appear to have carved out a unique market
niche rather than on broad industry sectors. Growth Fund's strategy of
looking for growth at reasonable price lead it to invest substantially in
the technology and financial services sectors. Multiple Strategies Fund's
equity investments reflected large positions in technology and health care
stocks while its fixed-income positions were strategically positioned at
year-end fairly equally across U.S. treasuries, foreign bonds and
corporate high yield bonds, in part in reaction to higher yields available
outside of the U.S. Growth & Income Fund had significant holdings in
technology stocks (including semiconductor makers) healthcare and
financial services. Global Securities Fund's investments reflected
perceived worldwide trends such as telecommunications expansion, emerging
consumer markets, infrastructure development and global integration, with
increased exposure to Japanese and European export-oriented companies and
high-quality technology stocks. Strategic Bond Fund added to its position
in bonds of selected East Asian markets and private label mortgage-backed
securities, in an effort to diversify among typically uncorrelated sectors
of the fixed-income market.
- Comparing each Fund's Performance to the Market. The charts below
show the performance of hypothetical $10,000 investments in each Fund
(except for Money Fund) held until December 31, 1995. Performance
information does not reflect charges that apply to separate accounts
investing in the Funds and is not restated to reflect the increased
management fee rates that took effect September 1, 1994. If these charges
and expenses were taken into account, performance would be lower.
High Income Fund's performance is compared to the performance of the
Salomon Brothers High Yield Market Index which 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. Bond
Fund's performance is compared to the performance of the Lehman Brothers
Corporate Bond Index, which 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
performance of Capital Appreciation Fund, Growth Fund and Growth & Income
Fund is compared to the performance of the S&P 500 Index, a broad-based
index of equity securities widely regarded as a general measurement of the
performance of the U.S. equity securities market. Multiple Strategies
Fund's performance is compared to the S&P 500 Index and the Lehman
Brothers Aggregate Bond Index, 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. Global Securities Fund's performance is
compared to the Morgan Stanley World Index, 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.
Strategic Bond Fund's performance is compared to the Lehman Brothers
Aggregate Bond Index and the Salomon Brothers World Government Bond Index.
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. Index performance reflects the reinvestment of dividends but does
not consider the effect of capital gains or transaction costs, and none
of the data below shows the effect of taxes. Also, a Fund's performance
reflects the effect of that Fund's business and operating expenses. While
index comparisons may be useful to provide a benchmark for a Fund's
performance, it must be noted that the Fund's investments are not limited
to the securities in the one index. Moreover, the index performance data
does not reflect any assessment of the risk of the investments included
in the index.
Comparison of Change in Value of $10,000 Hypothetical Investments in High
Income Fund Versus Salomon Brothers High Yield Market Index
(Graph comparing total return of High Income Fund shares to performance
of Salomon Brothers High Yield Market Index)
Average Annual Total Return at 12/31/95 (1)
1 year 5 years Life of Fund
20.37% 18.38% 13.27%
(1) The inception date of the Fund was 4/30/86. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
Comparison of Change in Value of $10,000 Hypothetical Investments in Bond
Fund Versus Lehman Brothers Corporate Bond Index
(Graph comparing total return of Bond Fund shares to performance of Lehman
Brothers Corporate Bond Index)
Average Annual Total Returns at 12/31/95 (1)
1 year 5 years Life of Fund
17% 10.19% 9.35%
(1) The inception date of the Fund was 4/3/85. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
Comparison of Change in Value of $10,000 Hypothetical Investments in
Capital Appreciation Fund Versus S&P 500 Index
(Graph comparing total return of Capital Appreciation Fund shares to
performance of S&P 500 Index)
Average Annual Total Returns at 12/31/95 (1)
1 year 5 years Life of Fund
32.52% 22.73% 15.20%
(1) The inception date of the Fund was 8/15/86. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
Comparison of Change in Value of $10,000 Hypothetical Investments in
Growth Fund Versus S&P 500 Index
(Graph comparing total return of Growth Fund shares to performance of S&P
500 Index)
Average Annual Total Returns at 12/31/95 (1)
1 year 5 years Life of Fund
36.65% 16.30% 13.57%
(1) The inception date of the Fund was 4/3/85. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
Comparison of Change in Value of $10,000 Hypothetical Investments in
Multiple Strategies Fund Versus S&P 500 Index and Lehman Brothers
Aggregate Bond Index
(Graph comparing total return of Multiple Strategies Fund shares to
performance of S&P 500 Index and Lehman Brothers Aggregate Bond Index)
Average Annual Total Returns at 12/31/95 (1)
1 year 5 years Life of Fund
21.36% 12.05% 11.09%
(1) The inception date of the Fund was 2/9/87. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
Comparison of Change in Value of $10,000 Hypothetical Investments in
Global Securities Fund Versus Morgan Stanley World Index
(Graph comparing total return of Global Securities Fund shares to
performance of Morgan Stanley World Index)
Average Annual Total Returns at 12/31/95 (1)
1 year 5 years Life of Fund
2.24% 9.53% 9.36%
(1) The inception date of the Fund was 11/12/90. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
Comparison of Change in Value of $10,000 Hypothetical Investments in
Strategic Bond Fund Versus Lehman Brothers Aggregate Bond Index and
Salomon Brothers World Government Bond Index
(Graph comparing total return of Strategic Bond Fund to performance of
Lehman Brothers Aggregate Bond Index and Salomon Brothers World Government
Bond Index)
Average Annual Total Returns at 12/31/95 (1)
1 year Life of Fund
15.33% 5.63%
______________
(1) The inception date of the Fund was 5/3/93. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
Comparison of Change in Value of $10,000 Hypothetical Investments in
Growth & Income Fund Versus S&P 500 Index
(Graph comparing total return of Growth & Income Fund to performance of
S&P 500)
Cumulative Total Return at 12/31/95 (1)
Life of Fund
25.25%
_________________________
(1) The inception date of the Fund was 7/5/95. The average annual total
returns and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.
ABOUT YOUR ACCOUNT
How to Buy Shares
Shares of each 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).
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 the close of
The New York Stock Exchange, which is normally 4:00 P.M., New York time,
but may be earlier on some days. Net asset value per share of each 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. 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; there can be no assurance that Money Fund's net asset value
will not vary. Further details are in "About Your Account- How to Buy
Shares - Money Fund Net Asset Valuation" in the Statement of Additional
Information.
How to Sell 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, OppenheimerFunds Services (the "Transfer Agent"),
of redemption instructions in proper form, except under unusual
circumstances as determined by the Securities and Exchange Commission.
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 portfolios 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, Capital Gains And Taxes
Dividends of Money Fund. The Trust intends to declare Money Fund's
dividends from its net investment income 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 "Money Fund Net Asset Valuation" in the Statement of Additional
Information).
Dividends and Distributions of High Income Fund, Bond Fund, Strategic Bond
Fund, Growth & Income Fund and Multiple Strategies Fund. The Trust
intends to declare High Income Fund, Bond Fund, Strategic Bond Fund,
Growth & Income 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.
Capital Gains. 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.
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 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., "Other Investment Techniques and Strategies - 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.
<PAGE>
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.
<PAGE>
APPENDIX B - DESCRIPTION OF SECURITIES RATINGS
This is a description of (i) the two highest rating categories for Short
Term Debt and Long Term Debt by the Rating Organizations referred to under
"Investment Objectives and 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 Broad-Based Indices. Set forth below are the relevant
data points that will appear on the linear graphs. Additional information
with respect to the foregoing, including a description of the Broad-Based
Indices, is set forth in the Prospectus under "How Have the Funds
Performed? - Management's Discussion of Performance."
Salomon
Brothers
Fiscal High Yield
Year Ended High Income Fund Market Index
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
12/31/94 $27,722 $24,569
12/31/95 $33,369 $29,412
Lehman
Brothers
Fiscal Corporate
Year Ended Bond Fund Bond Index
04/03/85 $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
12/31/94 $24,825 $26,139
12/31/95 $24,444 $27,063
Fiscal Capital
Year Ended Appreciation Fund S&P 500 Index
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 $13,533 $15,152
12/31/91 $20,938 $19,758
12/31/92 $24,167 $21,261
12/31/93 $30,770 $23,400
12/31/94 $28,434 $23,706
12/31/95 $37,681 $32,504
Fiscal
Year Ended Growth Fund S&P 500 Index
04/30/85 $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 $34,668
12/31/94 $28,726 $35,081
12/31/95 $35,851 $39,495
Lehman
Brothers
Fiscal Multiple Aggregate
Year Ended Strategies Fund S&P 500 Index Bond Index
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
12/31/94 $20,991 $20,754 $17,984
12/31/95 $25,474 $28,457 $21,307
Morgan
Fiscal Global Stanley
Year Ended Securities Fund World Index
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
12/31/94 $15,483 $14,985
12/31/95 $15,830 $18,090
Lehman Salomon
Brothers Brothers World
Fiscal Strategic Aggregate Government
Year Ended Bond Fund Bond Index Bond Index
05/03/93(1) $10,000 $10,000 $10,000
12/31/93 $10,425 $10,453 $10,426
12/31/94 $10,032 $10,147 $10,671
12/31/95 $11,569 $12,022 $12,703
_______________________
(1) Commencement of operations.
Fiscal Growth & S&P
Year Ended Income Fund 500 Index
07/05/95(1) $10,000 $10,000
12/31/95 $12,525 $11,455
_______________________
(1) Commencement of operations.
<PAGE>
Oppenheimer Variable Account Funds
3410 South Galena Street
Denver, Colorado 80231
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds 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 LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Statement of Additional Information,
and if given or made, such information and representations must not be
relied upon as having been authorized by the Trust, OppenheimerFunds, Inc.
or any affiliate thereof. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities offered
hereby in any state to any person to whom it is unlawful to make such an
offer in such state.
PR0600.001.0496
<PAGE>
Oppenheimer Variable Account Funds
3410 South Galena Street, Denver, Colorado 80231
1-800-525-7048
Statement of Additional Information dated May 1, 1996.
OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is an investment company
consisting of nine 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 Growth & Income Fund ("Growth & Income 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 is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated May 1, 1996. It should be read
together with the Trust's Prospectus, which may be obtained by writing to
the Funds' Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270,
Denver, Colorado 80217, or by calling the Transfer Agent at the toll-free
number shown above, and the Account Prospectus.
TABLE OF CONTENTS
Page
About the Funds
Investment Objectives and Policies 2
Investment Policies and Strategies 2
Other Investment Techniques and Strategies 11
Other Investment Restrictions 19
How the Funds are Managed 20
Organization and History 20
Trustees and Officers of the Trust 20
The Manager and Its Affiliates 26
Brokerage Policies of the Funds 28
Performance of the Funds 30
About Your Account
How to Buy Shares 33
Dividends, Capital Gains and Taxes 36
Additional Information About the Funds 36
Financial Information About the Funds 37
Independent Auditors' Report 38
Financial Statements 39
Appendix A: Industry Classifications A-1
<PAGE>
ABOUT THE FUNDS
Investment Objectives and Policies
Investment Policies and Strategies. 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.
-- 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 OppenheimerFunds, Inc. (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 Service, Inc., Fitch
Investors Service, L.P., 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 "Other Investment
Techniques and Strategies - Illiquid and Restricted 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. 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.
-- 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, where these
obligations are not secured by letters of credit or other credit support
arrangements, 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 by Rating Organizations, 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. 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 "Other Investment
Techniques and Strategies -Illiquid and Restricted Securities" in the
Prospectus.
-- 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.
-- Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund,
Growth & Income Fund, Strategic Bond Fund and Global Securities Fund. The
investment risks and rewards of certain of the investment policies of
these six 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 Companies. Each of these six Funds may invest
in securities of small unseasoned companies. These are companies that
have been in operation for less than three years, even after including the
operations of any of their predecessors. Securities of these companies
may have a limited liquidity (which means that a Fund may have difficulty
selling them at an acceptable price when it wants to) and the price of
those securities may be volatile.
-- Domestic Securities. Investments by Strategic Bond Fund, Growth
& Income Fund and Multiple Strategies Fund 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 - Collateralized Securities. Each of these
Funds may invest in the collateralized 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, Multiple Strategies Fund and Growth & Income Fund
may invest in participation interests, subject to the limitation,
described in "Illiquid and Restricted 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 the net assets of Multiple Strategies
Fund, Growth & Income Fund or Strategic Bond Fund can be invested in
participation interests of the same borrower. 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.
-- Foreign Securities. As noted in the Prospectus, each Fund, other
than Money Fund, may invest in securities (which may be denominated in
U.S. dollars or non-U.S. currencies) issued or guaranteed by foreign
corporations, certain supranational entities (described below) and foreign
governments or their agencies or instrumentalities, and in securities
issued by U.S. corporations denominated in non-U.S. currencies. All of
these are considered to be "foreign securities." Money Fund may invest in
certain U.S. dollar-denominated foreign securities, as described in the
Prospectus. 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, Multiple Strategies Fund, Growth & Income 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. If a Fund's
portfolio securities are held abroad, the countries in which they may be
held and the sub-custodians or depositories holding them must be approved
by the Trust's Board of Trustees to the extent that the approval is
required under applicable rules of the Securities and Exchange Commission.
Under normal market conditions, Global Fund will invest its assets
in securities of issuers located in a minimum of five different foreign
countries; this minimum may be reduced to four foreign countries when
foreign country investments comprise less than 80% of the Fund's net
assets; to three foreign countries when such investments comprise less
than 60% of its net assets, to two foreign countries when such investments
comprise less than 40% of its net assets and to one foreign country when
such investments comprise less than 20% of its net assets. In addition,
no more than 20% of Global Fund's net assets shall be invested in
securities of issuers located in any one foreign country; that limit shall
be increased to 35% for securities located in Australia, Canada, France,
Japan, the United Kingdom or Germany. None of the above percentage limits
are fundamental policies.
-- Warrants and Rights. As described in the Prospectus, each Fund
other than Money Fund may invest in warrants and rights. Warrants
basically are options to purchase equity securities at set prices valid
for a specified period of time. Their prices do not necessarily move in
a manner 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 Agreements. 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 or broker-dealer which has been designated a primary dealer in
government securities which must meet the credit requirements set by the
Trust's Board of Trustees from time to time) for delivery on an agreed-
upon future date. The resale 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 impose creditworthiness requirements to confirm that
the vendor is financially sound and will continuously monitor the
collateral's value.
-- Loans of Portfolio Securities. Each Fund may lend its respective
portfolio securities subject to the restrictions stated in the Prospectus.
Under applicable regulatory requirements (which are subject to change),
the loan collateral must, on each business day, at least equal the 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', administrative or other fees the Fund pays in connection with
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.
-- Borrowing. From time to time, each of Capital Appreciation Fund,
Strategic Bond Fund, Growth Fund, Multiple Strategies Fund, Growth &
Income Fund and Global Fund may borrow from banks on an unsecured basis
to invest the borrowed funds in portfolio securities. Borrowing is
subject to the restrictions stated in the Prospectus. Any such borrowing
will be made only from banks. In addition to the percentage restrictions
stated in the Prospectus, the Investment Company Act requires that any
such borrowing will be made only 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, when computed in that manner, 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. To do so, the Fund may have to sell a portion of its
investments at a time when it would otherwise not want to sell the
securities. Borrowing for investment increases both investment
opportunity and risk. Interest on money borrowed is an expense these six
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.
-- 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. The commitment to purchase a security for
which payment will be made on a future date may be deemed a separate
security and involve risk of loss if the value of the security declines
prior to the settlement 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 identify assets to 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.
Other Investment Techniques and Strategies
Covered Calls and Hedging
As described in the Prospectus, each Fund (except Money Fund) may
each write covered calls and may also employ one or more types of Hedging
Instruments, including the futures identified in the Prospectus
("Futures").
The 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 a Fund to establish a position in the securities markets as a
temporary substitute for purchasing individual securities (which that Fund
will normally purchase, and then terminate that hedging position), or to
attempt to protect against the possibility that a Fund's portfolio debt
securities are not fully included in a rise in the 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, a 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, the Funds
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 any of the Funds (except Money Fund)
write 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.
The Funds may also write (and purchase) calls on foreign currencies.
A call written on a foreign currency by any of the 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 any of
the 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 Funds' 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.
A 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. Set forth below are the Hedging Instruments which the Funds
(except Money 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 a 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.
The 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.
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 Bond Fund,
High Income Fund and 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. These Funds 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 a 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. These Funds 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. The Rule does not limit the percentage of
each Fund's assets that may be used for Futures margin and related options
premiums for a bona fide hedging position. However, under the Rule each
Fund must limit its aggregate initial futures margin and related option
premiums to no more than 5% of that Fund's net assets for hedging
strategies that are not considered bona fide hedging strategies under the
Rule. Under the restrictions, each 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. 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) s elling 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. Each Fund (except Money Fund) may
sell securities short in "short sales against-the-box." In a short sale,
the seller does not own the security that is sold, but normally borrows
the security to fulfill the delivery obligation. The seller later buys
the security to repay the loan, in the expectation that the price of the
security will be lower when the purchase is made, resulting in a gain.
In a short sale against-the-box, the Fund owns an equivalent amount of the
securities sold short. This technique is primarily used for tax purposes.
Other Investment Restrictions
The significant investment restrictions of all the Funds are set
forth in the Prospectus. The following investment restrictions are also
fundamental policies. Fundamental policies and the Funds' investment
objectives cannot be changed without the vote of a "majority" 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: (1) 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 (2) more than 50% of the outstanding shares.
Under these additional restrictions, each of the Funds cannot: (1)
invest in oil or gas exploration or development programs; (2) invest in
real estate or in interests in real estate, but may purchase securities
of issuers holding real estate or interests therein; (3) invest in
companies for the purpose of acquiring control of management thereof; (4)
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; (5) 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 (6) 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.
For purposes of the Funds' policy not to concentrate described under
investment restriction number four in the Prospectus, the Funds have
adopted the industry classifications set forth in Appendix A to the
Statement of Additional Information. This is not a fundamental policy.
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 each Fund has
undertaken to comply with the diversification requirements of Section
10506 of the California Insurance Code (see "Other Investment Techniques
and Strategies -- Foreign Securities" in the Prospectus) and with the
regulations adopted under those statutes.
How the Funds are Managed
Organization and History. As a Massachusetts business trust, the Trust
is not required to hold, and does not plan to hold, regular annual
meetings of shareholders. The Trust will hold meetings when required to
do so by the Investment Company Act or other applicable law, or when a
shareholder meeting is called by the Trustees or upon proper request of
the shareholders. At all shareholder meetings, shareholders only vote on
matters affecting their Fund. 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 record holders of 10% of its outstanding shares. In addition, if
the Trustees receive a request from at least 10 shareholders (who have
been shareholders for at least six months) holding shares of the Trust
valued at $25,000 or more or holding at least 1% of the Trust's
outstanding shares, whichever is less, stating 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 set forth under Section 16(c) of the Investment Company
Act. At all shareholder meetings, shareholders only vote on matters
affecting their Fund, and each Fund votes separately on such matters.
However, matters that require a vote by all shareholders of the Trust are
submitted to all the shareholders, without individual voting by Fund.
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 business trust (such as the
Trust) to be held personally liable as a "partner" under certain
circumstances, the risk of a Trust 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 its 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.
Trustees and Officers of the Trust. The Trust's Trustees and officers and
their principal occupations and business affiliations during the past five
years are set forth below. Each Trustee is also a Trustee, Director or
Managing General Partner of Daily Cash Accumulation Fund, Inc., Centennial
Money Market Trust, Centennial Tax Exempt Trust, Centennial Government
Trust, Centennial New York Tax Exempt Trust, Centennial California Tax
Exempt Trust, Oppenheimer Total Return Fund, Inc., Oppenheimer Equity
Income Fund, Oppenheimer Champion Income Fund, Oppenheimer High Yield
Fund, Oppenheimer Cash Reserves, Oppenheimer Main Street Funds, Inc.,
Oppenheimer International Bond Fund, Oppenheimer Integrity Funds,
Oppenheimer Strategic Income Fund, Oppenheimer Strategic Income & Growth
Fund, Centennial America Fund, L.P., Oppenheimer Tax-Exempt Fund,
Oppenheimer Limited-Term Government Fund, and The New York Tax-Exempt
Income Fund, Inc. (collectively, the "Denver-based Oppenheimer Funds"
except for Ms. Macaskill and Mr. Fossel, who are Trustees, Directors of
Managing General Partners of all the Denver-based Oppenheimer funds except
Oppenheimer Integrity Funds and Oppenheimer Strategic Income Fund). Ms.
Macaskill is President and Mr. Swain is Chairman of each of the Denver-
based Oppenheimer funds. As of March 31, 1996, none of the Trustees or
officers were Account owners and thus none owned any Fund shares.
Robert G. Avis, Trustee*, Age: 64
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; Age: 81
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
Charles Conrad, Jr., Trustee; Age: 65
19411 Merion Circle, Huntington Beach, California 92648
Vice President of McDonnell Douglas Space Systems, Co.; formerly
associated with the National Aeronautics and Space Administration.
Jon S. Fossel, Trustee*: Age: 53
Two World Trade Center, New York, New York 10048-0203
Chairman and a director of the Manager; Director of Oppenheimer
Acquisition Corp. ("OAC"), the Manager's parent holding company of
Shareholder Services, Inc. ("SSI") and of Shareholder Financial Services,
Inc. ("SFSI"), transfer agent subsidiaries of the Manager; formerly
President and Chief Executive Officer of the Manager.
Raymond J. Kalinowski, Trustee; Age: 66
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc.; 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.
__________________
*A Trustee who is an "interested person" of the Trust as defined in the
Investment Company Act.
C. Howard Kast, Trustee; Age: 74
2552 East Alameda, Denver, Colorado 80209
Formerly the Managing Partner of Deloitte, Haskins & Sells (an accounting
firm).
Robert M. Kirchner, Trustee; Age: 74
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
Bridget A. Macaskill, President and Trustee*; Age 47
President, Chief Executive Officer and a Director of the Manager; Chairman
and a Director of SSI; President and a Director of OAC and HarbourView
Asset Management Corporation ("HarbourView"), a subsidiary of the Manager,
and a Director of Oppenheimer Partnership Holdings, Inc., a holding
company subsidiary of the Manager; formerly Executive Vice President of
the Manager.
Ned M. Steel, Trustee; Age: 80
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; Director of Visiting Nurse
Corporation of Colorado; formerly Senior Vice President and a Director of
Van Gilder Insurance Corp. (insurance brokers).
James C. Swain, Chairman and Trustee*; Age: 62
3410 South Galena Street, Denver, Colorado 80231
Vice Chairman of the Manager; formerly President and a director of
Centennial Asset Management Corporation, an investment adviser subsidiary
of the Manager ("Centennial"); formerly Chairman of the Board of SSI.
Andrew J. Donohue, Vice President and Secretary; Age: 44
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
Oppenheimer funds; President and a director of Centennial; formerly Senior
Vice President and Associate General Counsel of the Manager and OFDI;
formerly a Partner in Kraft & McManimon (a law firm), prior to which he
was an officer of First Investors Corporation (a broker-dealer) and First
Investors Management Company, Inc. (broker-dealer and investment adviser)
and a director and an officer of the First Investors Family of Funds and
First Investors Life Insurance Company.
George C. Bowen, Vice President, Secretary and Treasurer; Age: 59
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 Oppenheimer
funds.
__________________
*A Trustee who is an "interested person" of the Trust as defined in the
Investment Company Act.
Paul LaRocco, Vice President; Capital Appreciation Fund Portfolio Manager;
Age: 37
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager; Associate Portfolio Manager for other
Oppenheimer funds; formerly a securities analyst with Columbus Circle
Investors, prior to which he was investment analyst for Chicago Title &
Trust Co.
Jane Putnam, Vice President; Growth Fund Portfolio Manager; Age 34
Two World Trade Center, New York, New York 10048-0203
Associate Portfolio Manager of other Oppenheimer funds; formerly a
portfolio manager and equity research analyst for Chemical Bank.
Michael S. Levine, Growth & Income Fund Assistant Portfolio Manager; Age:
29
Two World Trade Center, New York, New York 10048-0203
Assistant Vice President and Associate Portfolio Manager of the Manager;
formerly portfolio manager and research associate for Amas Securities,
Inc.; before which he was an analyst for Shearson Lehman Hutton, Inc.
David P. Negri, Vice President; High Income Fund, Bond Fund, Multiple
Strategies Fund and Strategic Bond Fund Portfolio Manager; Age: 41
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager; an officer of other Oppenheimer funds.
Richard H. Rubinstein, Vice President; Multiple Strategies Fund Portfolio
Manager; Age: 46
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager; an officer of other Oppenheimer funds;
formerly Vice President and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corporation (an investment adviser).
William L. Wilby, Vice President; Global Securities Fund Portfolio
Manager; Age: 51
Two World Trade Center, New York, New York 10048-0203
Senior Vice President of the Manager and HarbourView; formerly an
international investment strategist at Brown Brothers, Harriman & Co.,
prior to which he was a Managing Director and Portfolio Manager at AIG
Global Investors.
Robert C. Doll, Jr., Vice President; Growth & Income Fund Portfolio
Manager; Age: 41
Two World Trade Center, New York, New York 10048-0203
Executive Vice President of the Manager; an officer of other Oppenheimer
funds.
Robert J. Milnamow, Vice President; Growth & Income Fund Portfolio
Manager;Age 45
Two World Trade Center, New York, New York 10048-0203
Vice President of the Manager; previously a portfolio manager with Phoenix
Securities Group.
Robert G. Zack, Assistant Secretary; Age: 47
Two World Trade Center, New York, New York 10048-0203
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other Oppenheimer
funds.
Robert J. Bishop, Assistant Treasurer; Age: 36
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an officer
of other Oppenheimer funds; formerly a Fund Controller for the Manager,
prior to which he was an Accountant for Yale & Seffinger, P.C., an
accounting firm, and previously an Accountant and Commissions Supervisor
for Stuart James Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age: 30
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting, an officer
of other Oppenheimer funds; 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.
Dorothy Warmack, Vice President; Money Fund Portfolio Manager; Age: 59
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager and Centennial; an officer of other
Oppenheimer funds.
-- Remuneration of Trustees. The officers of the Trust are
affiliated with the Manager; they and the Trustees of the Trust who are
affiliated with the Manager (Ms. Macaskill and Messrs. Swain and Fossel,
the first two of which are both officers and Trustees) receive no salary
or fee from the Trust. The Trustees of the Trust (excluding Ms. Macaskill
and Messrs. Fossel and Swain) received the total amounts shown below (i)
from the Trust during its fiscal year ended 12/31/95, and (ii) from all
21 of the Denver-based Oppenheimer funds (including the Trust) listed in
the first paragraph of this section, and from Oppenheimer Strategic
Investment Grade Bond Fund and Oppenheimer Strategic Short-Term Income
Fund, which ceased operations following the acquisition of their assets
by other Oppenheimer funds for services in the positions shown:
<TABLE>
<CAPTION>
Total
Compensation
Aggregate From All
Compensation Denver-based
Name Position From Trust OppenheimerFunds1
<S> <C> <C> <C>
Robert G. Avis Trustee $2,666.66 $53,000.00
William A. Baker Audit and Review $3,687.00 $73,254.66
Committee Chairman
and Trustee
Charles Conrad, Jr. Audit and Review $3,240.66 $64,309.17
Committee Member
and Trustee
Raymond J. Kalinowski Derivative Instruments
Oversight Committee
Member and
Trustee $3,272.06 $65,000.00
C. Howard Kast Derivative Instruments
Oversight $3,272.06 $65,000.00
Committee
Member and
Trustee
Robert M. Kirchner Audit and Review $3,435.83 $68,292.00
Committee Member
and Trustee
Ned M. Steel Trustee $2,666.66 $53,000.00
</TABLE>
1 For the 1995 calendar year.
- -- Major Shareholders. As of March 20, 1996, the holders of 5% or more
of the outstanding shares of any Fund were separate accounts of (i)
Monarch Life Insurance Company ("Monarch"), Springfield, MA; (ii) Bankers
Security Life Insurance Society ("Bankers Security"), Arlington, VA; (iii)
The Life Insurance Company of Virginia ("Life of Virginia"), Richmond, VA;
(iv) Nationwide Life Insurance Company ("Nationwide"), Columbus, OH; (v)
Aetna Life Insurance and Annuity Company ("Aetna"), Hartford, CT; and (vi)
Massachusetts Mutual Life Insurance Company, Springfield, MA
("MassMutual"), and their respective subsidiaries. Such shares were held
as follows:
<TABLE>
<CAPTION>
Bankers Life of
Monarch Security Virginia Nationwide Aetna
MassMutual
<S> <C> <C> <C> <C> <C>
<C>
Money Fund 28,843,348.480 13,945,774.440 4,075,557.190 22,435,463.460
5,016,974.190
High Income 1,042,439.712 2,325,060.007 4,927,997.184 3,298,397.248
618,371.7263
Fund
Bond Fund * * 2,213,298.749 14,330,870.751 1,564,766.511
Capital 744,912.206 1,503,923.949 2,927,071.615 -- 1,607,759.381
3,583,873.584
Appreciation Fund
Growth Fund 1,017,311.860 * 1,703,213.267 1,891,039.097
506,904.99160
Multiple Strategies3,337,080.449 3,547,546.068 3,058,431.345 12,567,058.402 3,684,304.065
652,683.866
Fund
Global Securities 1,710,533.795 -- 14,641,525.608 3,055,954.312
6,962,582.634
Fund
Strategic Bond -- * -- -- 3,189,527.122 10,050,632.176
Fund
Growth & Income -- -- -- -- -- 619,575.663
Fund
</TABLE>
__________________
* Less than 5% of the outstanding shares of that Fund.
The Manager and Its Affiliates. The Manager is wholly-owned by
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 also
serve as officers of the Trust, and three of whom (Ms. Macaskill and
Messrs. Swain and Mr. Fossel) serve as Trustees of the Trust.
The Manager and the Funds have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees,
including portfolio managers, that would compete with or take advantage
of a Fund's portfolio transactions. Compliance with the Code of Ethics
is carefully monitored and strictly enforced by the Manager.
-- The Investment Advisory Agreements. The investment advisory
agreements between the Manager and the Trust for each of the nine Funds
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 corporate administration for 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.
Expenses not expressly assumed by the Manager under the advisory
agreement are paid by the Trust. The advisory 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 costs. Expenses with respect to any two or more
Funds are allocable 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 (except for Growth & Income Fund, which
commenced operations after December 31, 1994) were as follows:
<TABLE>
<CAPTION>
Fiscal year ended December 31,
1993 1994 1995
<S> <C> <C> <C>
Money Fund $212,358 $ 341,324 $ 338,483
High Income Fund $382,629 $ 617,198 $ 866,154
Bond Fund $361,258 $ 630,514 $1,280,422
Capital Appreciation Fund $407,611 $ 803,231 $1,790,785
Growth Fund $193,110 $ 307,904 $ 644,977
Multiple Strategies Fund $831,139 $1,433,107 $2,540,311
Global Securities Fund $227,226 $1,517,234 $2,451,556
Strategic Bond Fund (1) $ 18,509(1) $ 105,760 $ 281,335
Growth & Income Fund(2) $ 6,710(2)
</TABLE>
____________________
(1)From May 3, 1993 (commencement of operations) to December 31, 1993.
(2)From July 5, 1995 (commencement of operations) to December 31, 1995.
The advisory 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 advisory agreements, the Manager has voluntarily
undertaken since January 1, 1995 that the total expenses of any Fund shall
not exceed 2.5% of the first $30 million of average net assets of that
Fund, 2.0% of the next $70 million and 1.5% of average net assets over
$100 million. In addition, the Manager has voluntarily undertaken since
September 1, 1994 that it will limit the management fee charged under
Strategic Bond Fund's Agreement so that the ordinary operating expenses
of that Fund would not exceed 1.0% of its average net assets in any fiscal
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
a Fund to exceed its expense limitation. Other expense limits were in
effect prior to January 1, 1995. The Manager reserves the right to
terminate or amend the undertakings at any time. Any assumption of a
Fund's expenses under these limitations would lower that Fund's overall
expense ratio and increase its total return during any period in which
expenses are limited. The expense limitations in effect prior to the
above dates are contained in note 8 to the Funds' financial statements,
below.
-- The Transfer Agent. OppenheimerFunds Services, the Trust's
Transfer Agent, is responsible for maintaining the Trust's shareholder
registry and shareholder accounting records.
Brokerage Policies of the Funds
Brokerage Provisions of the Investment Advisory Agreements Affecting
Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth
& Income Fund, Global Securities Fund and Strategic Bond Fund. One of the
duties of the Manager under the advisory agreements is to arrange the
portfolio transactions for the Funds. The advisory agreements contain
provisions relating to the employment of broker-dealers ("brokers") to
effect the Funds' portfolio transactions. In doing so, the Manager is
authorized by the advisory agreements to employ broker-dealers, including
"affiliated" brokers, as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors,
implement the policy of 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 minimize the commissions
paid to the extent consistent with the interests and policies of the Funds
as established by the Board of Trustees. 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.
Under the advisory agreements, the Manager is authorized to select
brokers that 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 fair and
reasonable in relation to the services provided.
Description of Brokerage Practices Followed by the Manager. Subject to
the provisions of the advisory agreements, and the procedures and rules
described above, allocations of brokerage are generally made by the
Manager's portfolio traders based upon recommendations from the Manager's
portfolio managers. In certain instances portfolio managers may directly
place trades and allocate brokerage, also subject to the provisions of the
advisory agreement and the procedures and rules described above. In
either case, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those for which
an exchange is the primary market are generally done with principals or
market makers. Brokerage commissions are paid primarily for effecting
transactions in listed securities or for certain fixed-income agency
transactions in the secondary market, and are otherwise paid only if it
appears likely that a better price or execution can be obtained. When
Funds engage in an option transaction, ordinarily the same broker will be
used for the purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent orders
to purchase or sell the same security by more than one of the accounts
managed by the Manager 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 of 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 Fund normally deals directly with the selling or
purchasing principal or market maker unless the Manager determines that
a better price or execution can be obtained by using a broker. Purchases
of these securities from underwriters include a commission or concession
paid by the issuer to the underwriter. Purchases from dealers include a
spread between the bid and asked prices. The Funds seek to obtain prompt
execution of these 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 received 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 and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid in
commission dollars. 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. The Board has also
permitted the Manager to use stated commissions on secondary fixed-income
agency trades to obtain research where the broker has represented to the
Manager that: (i) the trade is not from or for the broker's own inventory,
(ii) the trade was executed by the broker on an agency basis at the stated
commission, and (iii) the trade is not a riskless principal transaction.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and by enabling the
Manager to obtain market information for the valuation of securities held
in the Fund's portfolio or being considered for purchase. The Board of
Trustees, including the "independent" Trustees of the Trust (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 or benefit of such services.
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 transactions 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.
During the Funds' fiscal years ended December 31, 1993, 1994 and 1995,
total brokerage commissions paid by the Funds (not including spreads or
concessions on principal transactions on a net trade basis) were $139,429,
$1,570,251 and $4,083,132, respectively, for Capital Appreciation Fund;
$6,723, $13,640 and $104,203, respectively, for High Income Fund; $33,497,
$96,732 and $152,870, respectively, for Growth Fund; $176,858, $332,782
and $400,275, respectively, for Multiple Strategies Fund; $352,908,
$2,245,838 and $2,826,016, respectively for Global Securities Fund; $0,
$3,742 and $13,074, respectively, for Strategic Bond Fund; $3,742 for Bond
Fund; and $42,952 for Growth & Income Fund. During the fiscal year ended
December 31, 1995, $85,181, $76,831, $124,622, $2,390,090, $84 and $1,121
was paid by Capital Appreciation Fund,Growth Fund, Multiple Strategies
Fund, Global Securities Fund, High Income Fund and Growth & Income Fund,
respectively, to dealers as brokerage commissions in return for research
services; the aggregate amount of those transactions was $13,766,311,
$44,158,624, $40,912,338, $637,535,747, $30,381 and $695,038 for Capital
Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global
Securities Fund, High Income Fund and Growth & Income Fund, respectively.
Performance of the Funds
-- 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, 1995, Money Fund's "current yield" was 5.29% and its
compounded "effective yield" for that period was 5.43%.
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,
1995, the yield of High Income Fund, Bond Fund and Strategic Bond Fund,
calculated as described above, was 9.64%, 5.95% and 7.88%, 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.
- -- Dividend Yield and Distribution Return. 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, 1995, was 11.29%,
6.76% and 7.83%, respectively.
Total Return. Each Fund, except 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. Cumulative total
return is determined as follows:
ERV - P
- ------- = Total Return
P
Both formulas assume that all dividends and capital gains distributions
during the period are reinvested at net asset value per share, and that
the investment is redeemed at the end of the period. Set forth below is
the "average annual total return" and "total return" for each Fund (using
the method described above) during the periods indicated:
<TABLE>
<CAPTION>
Average Annual Total Return for:
Cumulative
Total
Fiscal Year Five Year Return From
Ended Period Inception(1) Inception(1)
Fund 12/31/95 Ended 12/31/95 to 12/31/95 to 12/31/95
<S> <C> <C> <C> <C>
High Income Fund 20.37% 18.38% 13.27% 233.69%
Bond Fund 17.00% 10.19% 10.43% 190.45%
Capital Appreciation Fund 32.52% 22.73% 15.20% 276.81%
Growth Fund 36.65% 16.30% 13.57% 292.56%
Multiple Strategies Fund 21.36% 12.05% 11.09% 154.75%
Global Securities Fund 2.24% 9.53% 9.36% 58.30%
Strategic Bond Fund 15.33% N/A 5.63% 15.69%
Growth & Income Fund N/A N/A N/A 25.25%
</TABLE>
______________
(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; May 3, 1993 for Strategic Bond Fund;
and 7/5/95 for Growth & Income 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.
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 alternatives 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.
Other Performance Comparisons. 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 based on categories relating
to investment objectives. The performance of the Funds is ranked against
all other funds underlying variable insurance products. 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 Trust 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 separate accounts that offer any of the Funds by
Morningstar, Inc., an independent mutual fund monitoring service, that
ranks mutual funds, including the Funds, monthly in broad investment
categories (equity, taxable bond, municipal bond and hybrid) based on
risk-adjusted investment return. Investment return measures a fund's
three, five and ten-year average annual total returns (when available) in
excess of 90-day U.S. Treasury bill returns after considering sales
charges and expenses. Risk reflects fund performance below 90-day U.S.
Treasury bill monthly returns. Risk and return are combined to produce
star rankings reflecting performance relative to the average fund in a
fund's category. Five stars is the "highest" ranking (top 10%), four
stars is "above average" (next 22.5%), three stars is "average" (next
35%), two stars is "below average" (next 22.5%) and one star is "lowest"
(bottom 10%). Rankings are subject to change.
About Your Account
How To Buy 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 Statement of Additional Information and the Prospectus. Such shares
are sold at their respective offering prices (net asset values without
sales charges) and redeemed at their respective net asset values as
described in the Prospectus.
The net asset value per share of each Fund is determined as of the
close of business of The New York Stock Exchange (the "Exchange") on each
day that the Exchange is open, by dividing the value of the Fund's net
assets by the number of shares that are outstanding. The Exchange
normally closes at 4:00 P.M., New York time, but may close earlier on some
days (for example, in case of weather emergencies or on days falling
before a holiday). The Exchange's most recent annual announcement (which
is subject to change) states that it will close on New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. It may also close on other days.
Dealers may conduct trading at times when the Exchange is closed
(including weekends and holidays). 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 on those days, the net asset values per share of the Funds may
be significantly affected at times when shareholders may not purchase or
redeem shares.
The Trust's Board of Trustees has established procedures for the
valuation of each Fund's (other than the Money Fund's) securities,
generally as follows: (i) equity securities traded on a U.S. securities
exchange or on NASDAQ for which last sale information is regularly
reported are valued at the last reported sale price 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) securities actively traded on a
foreign securities exchange are valued at the last sales price available
to the pricing service approved by the Board of Trustees or to the Manager
as reported by the principal exchange on which the security is traded;
(iii) unlisted foreign securities or listed foreign securities not
actively traded are valued at the mean between "bid" and "asked" prices
determined by a pricing service approved by the Board of Trustees or by
the Manager; (iv) long-term debt securities having a remaining 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 Board of
Trustees or obtained from active market makers in the security on the
basis of reasonable inquiry; (v) debt instruments having a maturity of
more than one year when issued, and non-money market type instruments
having a maturity of one year or less when issued, which have a remaining
maturity of 60 days or less are valued at the mean between the "bid" and
"asked" prices determined by a pricing service approved by the Board of
Trustees or obtained from active market makers in the security on the
basis of reasonable inquiry; (vi) money market-type debt securities having
a maturity of less than one year when issued that having a remaining
maturity of 60 days or less are valued at cost, adjusted for amortization
of premiums and accretion of discounts; and (vii) securities (including
restricted securities) not having readily-available market quotations are
valued at fair value under the Board's procedures; (viii) securities
denominated in foreign currency are converted to U.S. dollars at the
prevailing rates of exchange at the closing price on the London foreign
exchange market as provided by a reliable bank, dealer or pricing
services; and (ix) foreign currency, including forward contracts, will be
valued at the closing price in the London foreign exchange market as
provided by a reliable bank, dealer or pricing service.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of The New York
Stock Exchange. Events affecting the values of foreign securities traded
in stock markets that occur between the time their prices are determined
and the close of the Exchange will not be reflected in a Fund's
calculation of net asset value unless the Board of Trustees or the
Manager, under procedures established by the Board of Trustees, determines
that the particular event would materially affect a Fund's net asset
value, in which case an adjustment would be made, if necessary.
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.
Puts, calls and Futures held by a Fund are valued at the last sales
price on the principal exchange on which they are traded, or on NASDAQ as
applicable, as determined by a pricing service approved by the Board of
Trustees or by the Manager, 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.
In determining a Fund's gain on investments, if a call written by that
Fund is exercised, the proceeds are increased by the premium received.
If a call or put written by a Fund expires, that Fund has a gain in the
amount of the premium; if the Fund enters into a closing purchase
transaction, it will have a gain or loss depending on whether the premium
was more or less than the cost of the closing transaction. If a Fund
exercises a put it holds, the amount that Fund receives on its sale of the
underlying investment is reduced by the amount of premium paid by the
Fund.
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 Trust'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, 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 Money Fund shares 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 Money Fund shares will tend to be higher than that of a
portfolio priced at market value.
Dividends, Capital Gains and Taxes
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 About the Funds
The Custodian and the Transfer Agent. The Bank of New York is the
custodian of the Trust's securities. 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.
OppenheimerFunds Services, a subsidiary of the Manager, is responsible
as Transfer Agent for maintaining the Trust's shareholder registry and
shareholder accounting records, and for administrative functions. It also
acts as the shareholder servicing agent for the other Oppenheimer funds.
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.
<PAGE>
Independent Auditors' Report
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,
Oppenheimer Strategic Bond Fund and Oppenheimer Growth & Income Fund (all
of which are series of Oppenheimer Variable Account Funds) as of
December 31, 1995, the related statements of operations for the year
then ended, the statements of changes in net assets for the years ended
December 31, 1995 and 1994, and the financial highlights for the
applicable periods ended December 31, 1995, 1994, 1993, 1992, 1991,
1990, 1989, 1988, 1987 and 1986. 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 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, 1995 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, Oppenheimer Strategic Bond Fund and Oppenheimer Growth & Income
Fund at December 31, 1995, the results of their operations, the
changes in their net assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted
accounting principles.
/s/ Deloitte & Touche LLP
- -----------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
January 22, 1996
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND
Statement of Investments
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
AMOUNT
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CERTIFICATES OF DEPOSIT - 4.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
YANKEE CERTIFICATES OF DEPOSIT - 4.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Sanwa Bank Ltd., 5.67%, 1/10/96 (Cost $2,999,928) $
3,000,000 $
2,999,928
- -------------------------------------------------------------------------------------------------------------------------
- -----------
DIRECT BANK OBLIGATIONS - 10.5%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Chase Manhattan Bank, 5.45%, 5/17/96 3,000,000
2,938,579
- -------------------------------------------------------------------------------------------------------------------------
FCC National Bank, 5.25%, 1/19/96 (1) 1,000,000
999,779
- -------------------------------------------------------------------------------------------------------------------------
National Westminster Bank of Canada, 5.40%, 7/26/96
3,000,000
2,906,850
- -----------------
Total Direct Bank Obligations (Cost $6,845,208)
6,845,208
- -------------------------------------------------------------------------------------------------------------------------
- -----------
LETTERS OF CREDIT - 5.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Barclays Bank PLC, guaranteeing commercial paper of:
3,500,000
3,440,885
Banco Real, S.A.-Grand Cayman Branch, 5.63%, 4/18/96
(Cost $3,440,885)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
SHORT-TERM NOTES - 61.4%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BANKS - 4.7%
- -------------------------------------------------------------------------------------------------------------------------
CoreStates Capital Corp., 5.71%, 2/15/96 3,000,000
2,978,587
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BROKER/DEALERS - 14.6%
- -------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 6.25%, 1/2/96
3,000,000 2,999,479
- -------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 5.68%-5.70%, 2/29/96
3,000,000 2,971,975
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc., 5.53%, 9/30/96 (1)
3,600,000 3,600,000
- -----------------
9,571,454
- -------------------------------------------------------------------------------------------------------------------------
- -----------
COMMERCIAL FINANCE - 15.2%
- -------------------------------------------------------------------------------------------------------------------------
CIT Group Holdings, Inc., 6.027%, 1/10/96 (1)
1,000,000 1,000,000
- -------------------------------------------------------------------------------------------------------------------------
FINOVA Capital Corp., 5.85%-5.90%, 1/30/96
3,000,000
2,985,742
- -------------------------------------------------------------------------------------------------------------------------
Fleet Mortgage Group, Inc., 5.58%, 4/4/96 3,000,000
2,956,290
- -------------------------------------------------------------------------------------------------------------------------
Heller Financial, Inc., 5.78%, 2/12/96 3,000,000
2,979,770
- -----------------
9,921,802
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CONGLOMERATES - 5.0%
- -------------------------------------------------------------------------------------------------------------------------
Mitsubishi International Corp., 5.65%, 1/5/96 3,300,000
3,297,928
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CONSUMER FINANCE - 6.1%
- -------------------------------------------------------------------------------------------------------------------------
Beneficial Corp., 5.26%, 2/1/96 (1) 4,000,000
4,000,000
- -------------------------------------------------------------------------------------------------------------------------
- -----------
DIVERSIFIED FINANCIAL - 3.0%
- -------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.025%, 3/1/96 (1)
2,000,000
1,999,902
- -------------------------------------------------------------------------------------------------------------------------
- -----------
ENVIRONMENTAL - 4.4%
- -------------------------------------------------------------------------------------------------------------------------
WMX Technologies, Inc., 5.32%, 9/10/96
3,000,000 2,887,837
- -------------------------------------------------------------------------------------------------------------------------
- -----------
SAVINGS & LOANS - 5.3%
- -------------------------------------------------------------------------------------------------------------------------
Great Western Bank FSB, 5.72%-5.75%, 1/29/96
3,500,000
3,484,429
- -------------------------------------------------------------------------------------------------------------------------
- -----------
SPECIAL PURPOSE FINANCIAL - 3.1%
- -------------------------------------------------------------------------------------------------------------------------
Madison Funding Corp., 5.70%, 1/22/96
2,025,000 2,017,818
- -----------------
Total Short-Term Notes (Cost $40,159,757)
40,159,757
</TABLE>
2
<PAGE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
AMOUNT
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
U.S. GOVERNMENT OBLIGATIONS - 4.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Student Loan Marketing Assn., guaranteeing commercial paper
of: Secondary Market Services, Inc., Education Loan Revenue
Nts., Series-1995A, 5.72%-5.75%, 1/12/96 (Cost $2,994,729) $
3,000,000 $
2,994,729
- -------------------------------------------------------------------------------------------------------------------------
- -----------
FOREIGN GOVERNMENT OBLIGATIONS - 4.4%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Westdeutsche Landesbank Girozentrale supported by Federal
Republic of Germany, guaranteeing commercial paper of:
Unibanco-Uniao de Brancos Brasileiros S.A.-Grand Cayman,
3,000,000
2,909,440
5.66%, 4/15/96 (Cost $2,909,440)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
REPURCHASE AGREEMENT - 5.5%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Repurchase agreement with First Chicago Capital Markets, 5.90%, dated
12/29/95, to be repurchased at $3,597,357 on 1/2/96, collateralized
by U.S. Treasury Nts., 5.125%-8.75%, 12/31/96-11/5/04, with a value
of $1,951,392, U.S. Treasury Bonds, 6.25%-11.25%, 8/15/03-8/15/23,
with a value of $1,182,591, and U.S. Treasury Bills maturing
11/14/96, with a value of $536,288 (Cost $3,595,000)
3,595,000 3,595,000
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
96.3%
62,944,947
- -------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES
3.7
2,441,513
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS 100.0%
65,386,460
</TABLE>
=================
Short-term notes, direct bank obligations and letters of credit are
generally traded on a discount basis; the interest rate is the discount
rate received by the Trust 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, 1995.
See accompanying Notes to Financial Statements.
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CERTIFICATES OF DEPOSIT - 1.8%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Citibank CD:
19%, 1/19/96 (2) IDR 1,369,800,000
$ 599,101
27.40%, 3/22/96 (2) HUF 83,706,000
612,667
- -------------------------------------------------------------------------------------------------------------------------
Indonesia (Republic of) Bank Negara CD, Zero Coupon, (2) (3) IDR
2,000,000,000 805,012
15.914%, 6/17/96
- -------------------------------------------------------------------------------------------------------------------------
Krungthai Thanakit CD, Zero Coupon, 11.533%, 2/29/96 (2) (3) THB
10,000,000 387,586
- -----------------
1,192,598
Total Certificates of Deposit (Cost $2,427,679)
2,404,366
- -------------------------------------------------------------------------------------------------------------------------
- -----------
MORTGAGE-BACKED OBLIGATIONS - 2.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
PRIVATE - 2.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
COMMERCIAL - 0.8%
- -------------------------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates, Series (4) (5)
700,000 518,219
1993-C1, Cl. F, 7.154%, 12/25/03
- -------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through (4)
496,835 509,644
Certificates, Series 1995-C2, Cl. D, 8.06%, 6/15/21
- -----------------
1,027,863
- -------------------------------------------------------------------------------------------------------------------------
- -----------
MULTI-FAMILY - 1.8%
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1994-C1, Cl. E, 8%, 6/25/26 747,797
631,889
Series 1994-C2, Cl. G, 8%, 4/25/25 913,912
768,543
Series 1995-C1, Cl. F, 6.90%, 2/25/27 1,133,508
997,841
- -----------------
2,398,273
- -----------------
Total Mortgage-Backed Obligations (Cost $3,274,663)
3,426,136
- -------------------------------------------------------------------------------------------------------------------------
- -----------
U.S. GOVERNMENT OBLIGATIONS - 5.1%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
TREASURY - 5.1%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
U.S. Treasury Bonds, 6.875%, 8/15/25 (Cost $6,531,094)
6,000,000 6,770,621
- -------------------------------------------------------------------------------------------------------------------------
- -----------
FOREIGN GOVERNMENT OBLIGATIONS - 12.2%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Argentina (Republic of):
Bonds, Bonos del Tesoro, Series I, 5.89%, 5/31/96 (4)
200,000 195,944
Medium-Term Nts., 8%, 8/9/97 NLG
800,000 495,325
Sr. Unsub. Unsec. Nts., 9.875%, 1/6/98 FRF
2,060,000 420,446
- -------------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Interest Due and Unpaid Bonds, (4)
356,250 306,820
6.688%, 1/1/01
- -------------------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 6.75%,
7/28/11 (4) (6) 200,000
92,750
- -------------------------------------------------------------------------------------------------------------------------
Canada (Government of) Bonds:
7.75%, 9/1/99 CAD 641,000
492,321
Series A-76, 9%, 6/1/25 CAD 592,000
506,792
- -------------------------------------------------------------------------------------------------------------------------
Central Bank of Costa Rica Principal Bonds, Series A, 6.25%,
500,000 310,000
5/21/10
- -------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) 1989-1990 Integrated Loan Facility (4) (7)
1,114,360 1,036,355
Bonds, 6.875%, 7/1/01
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Denmark (Kingdom of) Bonds:
7%, 11/10/24 DKK 6,300,000
$ 1,014,039
8%, 3/15/06 DKK 1,410,000
268,296
- -------------------------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Disc. Bonds, 6.812%, 2/28/25 (4)
520,000 264,550
- -------------------------------------------------------------------------------------------------------------------------
European Investment Bank, 12.75% Debs., 2/15/00 ITL
206,000,000 140,404
- -------------------------------------------------------------------------------------------------------------------------
France (Government of) Obligation Assimilable du Tresor FRF
556,000 124,403
Debs., 9.50%, 6/25/98
- -------------------------------------------------------------------------------------------------------------------------
Germany (Republic of) Bonds, Series 94, 6.25%, 1/4/24 DEM
1,450,000 943,685
- -------------------------------------------------------------------------------------------------------------------------
Hashemite Kingdom of Jordan Disc. Bonds, 6.437%,
12/23/23 (4) 1,000,000
620,000
- -------------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development Bonds, NZD
500,000 348,124
12.50%, 7/25/97
- -------------------------------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, Buoni del Tesoro ITL
320,000,000 203,611
Poliennali, 10.50%, 4/1/00
- -------------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement, Tranche (4)
1,500,000 999,375
A, 6.594%, 1/1/09
- -------------------------------------------------------------------------------------------------------------------------
National Treasury Management Agency (Irish Government) IEP
140,000 235,831
Bonds, 8%, 10/18/00
- -------------------------------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD
1,230,000 826,403
- -------------------------------------------------------------------------------------------------------------------------
Nordic Investment Bank, 11.30% Debs., 3/4/02 ITL
215,000,000 140,440
- -------------------------------------------------------------------------------------------------------------------------
Norwegian Government Bonds, 9.50%, 10/31/02 NOK
4,400,000 824,375
- -------------------------------------------------------------------------------------------------------------------------
Panama (Republic of) Debs., 6.75%, 5/10/02 (4)
175,000 149,953
- -------------------------------------------------------------------------------------------------------------------------
Poland (Republic of) Treasury Bills, Zero Coupon, 29.984%, (3) PLZ
500,000 188,298
4/17/96
- -------------------------------------------------------------------------------------------------------------------------
Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio PTE
85,000,000 613,096
Prazo, 11.875%, 2/23/00
- -------------------------------------------------------------------------------------------------------------------------
Spain (Kingdom of):
Debs., Bonos y Obligacion del Estado, 10.10%, 2/28/01 ESP
39,000,000 325,174
Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%,
3/25/00 ESP 49,000,000
441,551
- -------------------------------------------------------------------------------------------------------------------------
Sweden (Kingdom of) Bonds, Series 1028, 11%, 1/21/99 SEK
3,500,000 568,290
- -------------------------------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria Bonds, 12%, 10/22/98 AUD
450,000 372,686
- -------------------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement, Tranche B, (4) (7) JPY
65,000,000 534,044
1.563%, 9/30/00
- -------------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury:
Debs., 8.50%, 12/7/05 GBP 185,000
308,684
10%, 2/26/01 GBP 180,000
315,974
- -------------------------------------------------------------------------------------------------------------------------
United Mexican States, Nacional Financiera SNC Nts., 13.60%, ESP
100,000,000 800,594
4/2/98
- -------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series DL, 6.563%, (4)
1,500,000 828,750
12/18/07
- -----------------
Total Foreign Government Obligations (Cost $16,009,093)
16,257,383
- -------------------------------------------------------------------------------------------------------------------------
- -----------
MUNICIPAL BONDS AND NOTES - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
San Joaquin Hills, California Transportation Corridor Agency (3)
12,500,000 1,202,550
Toll Road Capital Appreciation Revenue Bonds, Jr. Lien, Zero
Coupon, 9%, 1/1/28 (Cost $747,374)
</TABLE>
5
<PAGE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CORPORATE BONDS AND NOTES - 65.8%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BASIC INDUSTRY - 5.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CHEMICALS - 1.0%
- -------------------------------------------------------------------------------------------------------------------------
NL Industries, Inc.:
0%/13% Sr. Sec. Disc. Nts., 10/15/05 (8) $ 800,000
618,000
11.75% Sr. Sec. Nts., 10/15/03 650,000
697,125
- -----------------
1,315,125
- -------------------------------------------------------------------------------------------------------------------------
- -----------
METALS/MINING - 0.8%
- -------------------------------------------------------------------------------------------------------------------------
Carbide/Graphite Group, Inc. (The), 11.50% Sr. Nts., 9/1/03
454,000 492,590
- -------------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts.,
2/15/02 300,000
309,750
- -------------------------------------------------------------------------------------------------------------------------
UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts., 1/15/05
230,000 262,775
- -----------------
1,065,115
- -------------------------------------------------------------------------------------------------------------------------
- -----------
PAPER - 3.8%
- -------------------------------------------------------------------------------------------------------------------------
Buckeye Cellulose Corp., 8.50% Sr. Sub. Nts., 12/15/05
250,000 257,812
- -------------------------------------------------------------------------------------------------------------------------
Crown Paper Co., 11% Sr. Sub. Nts., 9/1/05
750,000 660,000
- -------------------------------------------------------------------------------------------------------------------------
Domtar, Inc.:
11.25% Debs., 9/15/17 400,000
426,000
12% Nts., 4/15/01 250,000
295,313
- -------------------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01
500,000 517,500
- -------------------------------------------------------------------------------------------------------------------------
Repap New Brunswick, Inc., 9.25% First Priority Sr. Sec. (4)
400,000 402,000
Nts., 7/15/00
- -------------------------------------------------------------------------------------------------------------------------
Repap Wisconsin, Inc., 9.25% First Priority Sr. Sec. Nts.,
500,000 477,500
2/1/02
- -------------------------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.75% Sr. Nts., 6/15/00 400,000
427,500
11.25% Sr. Sub. Nts., 6/15/02 200,000
215,000
- -------------------------------------------------------------------------------------------------------------------------
Stone Container Corp.:
10.75% First Mtg. Nts., 10/1/02 1,300,000
1,358,500
10.75% Sr. Sub. Nts., 6/15/97 100,000
102,500
- -----------------
5,139,625
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CONSUMER RELATED - 12.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CONSUMER PRODUCTS - 2.9%
- -------------------------------------------------------------------------------------------------------------------------
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., (3)
400,000 320,000
Series B, 10.901%, 5/27/98
- -------------------------------------------------------------------------------------------------------------------------
Harman International Industries, Inc., 12% Sr. Sub. Nts.,
1,650,000 1,823,250
8/1/02
- -------------------------------------------------------------------------------------------------------------------------
International Semi-Tech Microelectronics, Inc., 0%/11.50% (8)
650,000 344,500
Sr. Sec. Disc. Nts., 8/15/03
- -------------------------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., (3)
350,000 260,750
12.333%, 3/15/98
- -------------------------------------------------------------------------------------------------------------------------
Tag-Heuer International SA, 12% Sr. Sub. Nts., 12/15/05 (5)
500,000 501,875
- -------------------------------------------------------------------------------------------------------------------------
Williams (J. B.) Holdings, Inc., 12% Sr. Nts., 3/1/04 600,000
600,000
- -----------------
3,850,375
- -------------------------------------------------------------------------------------------------------------------------
- -----------
FOOD/BEVERAGES/TOBACCO - 0.8%
- -------------------------------------------------------------------------------------------------------------------------
Consolidated Cigar Corp., 10.50% Sr. Sub. Nts., 3/1/03
400,000 418,000
- -------------------------------------------------------------------------------------------------------------------------
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96 (7)
700,000 705,250
- -----------------
1,123,250
- -------------------------------------------------------------------------------------------------------------------------
- -----------
HEALTHCARE - 4.1%
- -------------------------------------------------------------------------------------------------------------------------
AmeriSource Corp., 11.25% Sr. Debs., 7/15/05 (9)
650,000 718,250
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
CORPORATE BONDS AND NOTES (CONTINUED)
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CONSUMER RELATED (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
HEALTHCARE (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
Capstone Capital Corp., 10.50% Cv. Sub. Debs., 4/1/02 $
1,600,000 1,918,000
- -------------------------------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., 7/15/02 (5)
400,000 434,000
- -------------------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series
500,000 548,750
A, 4/15/04
- -------------------------------------------------------------------------------------------------------------------------
Quorum Health Group, Inc., 8.75% Sr. Sub. Nts., 11/1/05
300,000 311,625
- -------------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 10.125% Sr. Sub. Nts., 3/1/05
500,000 556,250
- -------------------------------------------------------------------------------------------------------------------------
Total Renal Care, Inc., 0%/12% Sr. Sub. Disc. Nts., 8/15/04 (8)
994,000 959,210
- -----------------
5,446,085
- -------------------------------------------------------------------------------------------------------------------------
- -----------
HOTEL/GAMING - 2.3%
- -------------------------------------------------------------------------------------------------------------------------
Bally's Casino Holdings, Inc., Zero Coupon Sr. Disc. Nts., (3)
600,000 483,000
10.252%, 6/15/98
- -------------------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Promissory Nts. 9,500
--
- -------------------------------------------------------------------------------------------------------------------------
Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03
500,000 523,750
- -------------------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 13.50% Sr. Sec. Nts., (5)
400,000 434,000
11/15/02
- -------------------------------------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625% Sr. Sub. Nts., 7/15/05
450,000 463,500
- -------------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 750,000
738,750
- -------------------------------------------------------------------------------------------------------------------------
Trump Plaza Funding, Inc., 10.875% Gtd. Mtg. Nts.,
6/15/01 250,000
260,000
- -------------------------------------------------------------------------------------------------------------------------
Trump Taj Mahal Funding, Inc., 11.35% Debs., Series A, (9)
200,000 189,217
11/15/99
- -----------------
3,092,217
- -------------------------------------------------------------------------------------------------------------------------
- -----------
LEISURE - 0.3%
- -------------------------------------------------------------------------------------------------------------------------
Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 387,805
409,619
6/30/02
- -------------------------------------------------------------------------------------------------------------------------
- -----------
RESTAURANTS - 1.3%
- -------------------------------------------------------------------------------------------------------------------------
Carrols Corp., 11.50% Sr. Nts., 8/15/03 430,000
436,450
- -------------------------------------------------------------------------------------------------------------------------
Foodmaker, Inc.:
9.25% Sr. Nts., 3/1/99 200,000
192,500
9.75% Sr. Sub. Nts., 6/1/02 1,275,000
1,160,250
- -----------------
1,789,200
- -------------------------------------------------------------------------------------------------------------------------
- -----------
TEXTILE/APPAREL - 0.6%
- -------------------------------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02
750,000 738,750
- -------------------------------------------------------------------------------------------------------------------------
- -----------
ENERGY - 4.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BP America, Inc., 10.875% Nts., 8/1/01 CAD
350,000 297,207
- -------------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 10.50% Sr. Nts., 6/1/02
500,000 526,250
- -------------------------------------------------------------------------------------------------------------------------
Kelley Oil & Gas Corp., 13.50% Sr. Nts., 6/15/99
600,000 489,000
- -------------------------------------------------------------------------------------------------------------------------
Maxus Energy Corp., 11.50% Debs., 11/15/15
800,000 830,000
- -------------------------------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02
750,000 853,125
- -------------------------------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc.:
12.25% Sub. Debs., 2/1/05 250,000
280,000
9.375% Sub. Debs., 2/1/06 250,000
246,250
- -------------------------------------------------------------------------------------------------------------------------
Plains Resources, Inc., 12% Sr. Sub. Nts., 10/1/99 200,000
208,000
- -------------------------------------------------------------------------------------------------------------------------
Triton Energy Corp.:
0%/9.75% Sr. Sub. Disc. Nts., 12/15/00 (8) 200,000
187,500
Zero Coupon Sr. Sub. Disc. Nts., 10.318%, 11/1/97 (3)
1,200,000 1,041,000
- -------------------------------------------------------------------------------------------------------------------------
United Meridian Corp., 10.375% Gtd. Sr. Sub. Nts.,
10/15/05 250,000
265,625
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
CORPORATE BONDS AND NOTES (CONTINUED)
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
ENERGY (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Vintage Petroleum, Inc., 9% Sr. Sub. Nts., 12/15/05 $
500,000 $ 506,250
- -----------------
5,730,207
- -------------------------------------------------------------------------------------------------------------------------
- -----------
FINANCIAL SERVICES - 2.1%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BANKS & THRIFTS - 0.7%
- -------------------------------------------------------------------------------------------------------------------------
Banco Bamerindus do Brasil SA:
10.50% Debs., 6/23/97 280,000
257,600
11% Sr. Unsub. Unsec. Bonds, 10/6/97 280,000
257,600
- -------------------------------------------------------------------------------------------------------------------------
Banco Ganadero SA, Zero Coupon Sr. Unsub. Unsec. Nts., (3) (5)
250,000 239,520
9.941%, 6/15/96
- -------------------------------------------------------------------------------------------------------------------------
Banco Mexicano SA, 8% Sr. Unsub. Unsec. Exchangeable
250,000 210,625
Medium-Term Nts., 11/4/98
-----------------
965,345
- -------------------------------------------------------------------------------------------------------------------------
- -----------
DIVERSIFIED FINANCIAL - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98
250,000 212,500
- -------------------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 (7)
244,994 269,494
- -------------------------------------------------------------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98
300,000 282,750
- -------------------------------------------------------------------------------------------------------------------------
Olympic Financial Ltd., 13% Sr. Nts., 5/1/00 350,000
383,250
- -----------------
1,147,994
- -------------------------------------------------------------------------------------------------------------------------
- -----------
INSURANCE - 0.5%
- -------------------------------------------------------------------------------------------------------------------------
Terra Nova Insurance (UK) Holdings PLC, 10.75% Sr. Nts.,
600,000 657,000
7/1/05
- -------------------------------------------------------------------------------------------------------------------------
- -----------
HOUSING RELATED - 2.1%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BUILDING MATERIALS - 0.7%
- -------------------------------------------------------------------------------------------------------------------------
Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01
640,000 707,200
- -------------------------------------------------------------------------------------------------------------------------
Walter Industries, Inc., 17% Sub. Nts., 1/1/96 (10) 400,000
254,000
- -----------------
961,200
- -------------------------------------------------------------------------------------------------------------------------
- -----------
HOMEBUILDERS/REAL ESTATE - 1.4%
- -------------------------------------------------------------------------------------------------------------------------
Olympia & York First Canadian Place Ltd., 11% Debs., Series (11) CAD
1,000,000 472,929
3, 11/4/49
- -------------------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec.
1,000,000 1,025,000
Nts., Series B, 4/1/02
- -------------------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (5)
500,000 372,500
- -----------------
1,870,429
- -------------------------------------------------------------------------------------------------------------------------
- -----------
MANUFACTURING - 3.1%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
AEROSPACE/ELECTRONICS/COMPUTERS - 1.9%
- -------------------------------------------------------------------------------------------------------------------------
Berg Electronics Holdings Corp., 11.375% Sr. Sub. Debs.,
500,000 562,500
5/1/03
- -------------------------------------------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
500,000 516,250
8/1/05
- -------------------------------------------------------------------------------------------------------------------------
Dell Computer Corp., 11% Sr. Nts., 8/15/00 500,000
555,000
- -------------------------------------------------------------------------------------------------------------------------
Rohr, Inc., 11.625% Sr. Nts., 5/15/03 800,000
876,000
- -----------------
2,509,750
- -------------------------------------------------------------------------------------------------------------------------
- -----------
AUTOMOTIVE - 1.2%
- -------------------------------------------------------------------------------------------------------------------------
Aftermarket Technology Corp., 12% Sr. Sub. Nts., Series B,
500,000 532,500
8/1/04
- -------------------------------------------------------------------------------------------------------------------------
Foamex LP/Foamex Capital Corp.:
11.25% Sr. Nts., 10/1/02 500,000
482,500
9.50% Sr. Sec. Nts., 6/1/00 240,000
234,000
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
CORPORATE BONDS AND NOTES (CONTINUED)
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
MANUFACTURING (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
AUTOMOTIVE (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 $
425,000 $ 357,000
- -----------------
1,606,000
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CAPITAL GOODS - 0.0%
- -------------------------------------------------------------------------------------------------------------------------
Farley, Inc., Zero Coupon Sub. Debs., 14.151%, 12/30/12 (3) (7)
198,000 19,569
- -------------------------------------------------------------------------------------------------------------------------
- -----------
MEDIA - 15.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BROADCASTING - 4.1%
- -------------------------------------------------------------------------------------------------------------------------
Act III Broadcasting, Inc., 9.625% Sr. Sub. Nts., 12/15/03
430,000 433,225
- -------------------------------------------------------------------------------------------------------------------------
Argyle Television, Inc., 9.75% Sr. Sub. Nts., 11/1/05
150,000 149,250
- -------------------------------------------------------------------------------------------------------------------------
Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03
1,000,000 1,115,000
- -------------------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 (5)
1,250,000 1,262,500
- -------------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
10% Sr. Sub. Nts., 12/15/03 345,000
353,625
10% Sr. Sub. Nts., 9/30/05 400,000
411,000
- -------------------------------------------------------------------------------------------------------------------------
Summit Communications Group, Inc., 10.50% Sr. Sub. Debs.,
850,000 947,750
4/15/05
- -------------------------------------------------------------------------------------------------------------------------
Univision Television Group, Inc., 11.75% Sr. Sub. Nts.,
700,000 754,250
1/15/01
- -----------------
5,426,600
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CABLE TELEVISION - 7.2%
- -------------------------------------------------------------------------------------------------------------------------
American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04 (8)
1,506,106 1,042,978
- -------------------------------------------------------------------------------------------------------------------------
Australis Media Ltd., Units (each unit consists of $1,000 (8)(12)
1,500,000 1,095,000
principal amount of 0%/14% sr. sub. disc. nts., 5/15/03 and
one warrant to purchase 57.721 ordinary shares)
- -------------------------------------------------------------------------------------------------------------------------
Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts., 7/15/04 (8)
1,500,000 1,070,625
- -------------------------------------------------------------------------------------------------------------------------
Cablevision Industries Corp., 9.25% Sr. Debs., Series B,
600,000 651,000
4/1/08
- -------------------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04
500,000 531,250
- -------------------------------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc.Debs., (8)
350,000 206,500
11/15/07
- -------------------------------------------------------------------------------------------------------------------------
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13
300,000 319,500
- -------------------------------------------------------------------------------------------------------------------------
Diamond Cable Communications PLC:
0%/11.75% Sr. Disc. Nts., 12/15/05 (8) 500,000
297,500
0%/13.25% Sr. Disc. Nts., 9/30/04 (8) 100,000
70,750
- -------------------------------------------------------------------------------------------------------------------------
Fundy Cable Ltd., 11% Sr. Sec. Second Priority Nts., 11/15/05
400,000 420,000
- -------------------------------------------------------------------------------------------------------------------------
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., (4)
675,000 651,375
Series B, 11/1/03
- -------------------------------------------------------------------------------------------------------------------------
International CableTel, Inc.:
0%/10.875% Sr. Deferred Coupon Nts., 10/15/03 (8)
100,000 71,750
0%/12.75% Sr. Deferred Coupon Nts., 4/15/05 (8)
350,000 223,125
- -------------------------------------------------------------------------------------------------------------------------
People's Choice TV Corp., 0%/13.125% Sr. Disc. Nts., 6/1/04 (8)
350,000 202,125
- -------------------------------------------------------------------------------------------------------------------------
Rogers Cablesystems Ltd., 10% Sr. Sec. Second Priority
900,000 960,750
Debs., 12/1/07
- -------------------------------------------------------------------------------------------------------------------------
TeleWest PLC, 0%/11% Sr. Disc. Debs., 10/1/07 (8)
1,000,000 606,250
- -------------------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07
300,000 353,034
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
CORPORATE BONDS AND NOTES (CONTINUED)
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
MEDIA (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CABLE TELEVISION (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., Zero Coupon Sr. Sec. (3) $
1,240,000 $ 775,000
Disc. Nts., 12.752%, 11/15/99
- -----------------
9,548,512
- -------------------------------------------------------------------------------------------------------------------------
- -----------
DIVERSIFIED MEDIA - 3.2%
- -------------------------------------------------------------------------------------------------------------------------
Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series
750,000 802,500
A, 10/1/03
- -------------------------------------------------------------------------------------------------------------------------
Echostar Communications Corp., 0%/12.875% Sr. Disc. Nts., (8)
1,000,000 675,000
6/1/04
- -------------------------------------------------------------------------------------------------------------------------
GSPI Corp., 10.15% First Mtg. Bonds, 6/24/10 (5)
479,871 578,845
- -------------------------------------------------------------------------------------------------------------------------
Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03
500,000 520,000
- -------------------------------------------------------------------------------------------------------------------------
Outdoor Systems, Inc., 10.75% Sr. Nts., 8/15/03
300,000 292,500
- -------------------------------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp.:
0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (8) 1,250,000
1,031,250
9.75% Sr. Sec. Nts., 8/1/00 350,000
371,875
- -----------------
4,271,970
- -------------------------------------------------------------------------------------------------------------------------
- -----------
ENTERTAINMENT/FILM - 1.2%
- -------------------------------------------------------------------------------------------------------------------------
Imax Corp., 7% Sr. Nts., 3/1/01 (13) 1,600,000
1,576,000
- -------------------------------------------------------------------------------------------------------------------------
- -----------
OTHER - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
- -------------------------------------------------------------------------------------------------------------------------
- -----------
CONGLOMERATES - 0.6%
- -------------------------------------------------------------------------------------------------------------------------
MacAndrews & Forbes Group, Inc., 12.25% Sub. Nts., 7/1/96
750,000 757,500
- -------------------------------------------------------------------------------------------------------------------------
- -----------
SERVICES - 0.3%
- -------------------------------------------------------------------------------------------------------------------------
Protection One, Inc., 0%/13.625% Sr. Disc. Nts., 6/30/05 (8)
500,000 405,000
- -------------------------------------------------------------------------------------------------------------------------
- -----------
RETAIL - 2.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
SPECIALTY RETAILING - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03
630,000 589,050
- -------------------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03
300,000 294,000
- -------------------------------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05
300,000 325,500
- -----------------
1,208,550
- -------------------------------------------------------------------------------------------------------------------------
- -----------
SUPERMARKETS - 1.7%
- -------------------------------------------------------------------------------------------------------------------------
Grand Union Co., 12% Sr. Nts., 9/1/04 1,500,000
1,305,000
- -------------------------------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc., 11.50% Sr. Nts., 2/1/03 (9)
533,800 519,491
- -------------------------------------------------------------------------------------------------------------------------
Penn Traffic Co., 10.25% Sr. Nts., 2/15/02 400,000
383,000
- -----------------
2,207,491
- -------------------------------------------------------------------------------------------------------------------------
- -----------
TRANSPORTATION - 2.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
AIR TRANSPORTATION - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
American International Group, Inc., 11.70% Unsec. Unsub. ITL
690,000,000 458,326
Bonds, 12/4/01
- -------------------------------------------------------------------------------------------------------------------------
Atlas Air, Inc., 12.25% Pass-Through Certificates, 12/1/02
750,000 768,750
- -----------------
1,227,076
- -------------------------------------------------------------------------------------------------------------------------
- -----------
RAILROADS - 1.1%
- -------------------------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. (8)
2,200,000 1,463,000
Disc. Nts., Series B, 12/15/03
- -------------------------------------------------------------------------------------------------------------------------
- -----------
SHIPPING - 0.6%
- -------------------------------------------------------------------------------------------------------------------------
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04
750,000 783,750
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
CORPORATE BONDS AND NOTES (CONTINUED)
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
UTILITIES - 14.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
ELECTRIC UTILITIES - 2.5%
- -------------------------------------------------------------------------------------------------------------------------
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04 (8) $
1,000,000 $ 947,500
- -------------------------------------------------------------------------------------------------------------------------
El Paso Electric Co.:
10.75% Lease Obligation Bonds, 4/1/13 (10) 250,000
169,683
9.375% Lease Obligation Bonds, 10/1/96 (10) 100,000
67,761
- -------------------------------------------------------------------------------------------------------------------------
First PV Funding Corp., 10.15% Lease Obligation Bonds,
500,000 515,685
Series 1986B, 1/15/16
- -------------------------------------------------------------------------------------------------------------------------
First PV Funding Corp., 10.30% Lease Obligation Bonds,
1,000,000 1,021,561
Series 1986A, 1/15/14
- -------------------------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., 12/28/08
672,413 642,155
- -----------------
3,364,345
- -------------------------------------------------------------------------------------------------------------------------
- -----------
TELECOMMUNICATIONS - 12.1%
- -------------------------------------------------------------------------------------------------------------------------
A+ Network, Inc., 11.875% Sr. Sub. Nts., 11/1/05
750,000 759,375
- -------------------------------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (5) (8)
1,500,000 1,065,000
- -------------------------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc.:
Units (each unit consists of $1,000 principal amount of zero (12)
200,000 126,000
coupon sr. disc. nts., 8/15/00 and one warrant to purchase
1.126 shares of common stock)
Zero Coupon Sr. Disc. Nts., 12.844%, 8/15/00 (3)
2,250,000 1,355,625
- -------------------------------------------------------------------------------------------------------------------------
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (8)
2,000,000 1,602,500
- -------------------------------------------------------------------------------------------------------------------------
Cencall Communications Corp., 0%/10.125% Sr. Disc. Nts., (8)
1,000,000 565,000
1/15/04
- -------------------------------------------------------------------------------------------------------------------------
Comcast Cellular Corp., Zero Coupon Nts., Series B, 7.889%, (3)
850,000 656,625
3/5/00
- -------------------------------------------------------------------------------------------------------------------------
Comunicacion Celular SA, Units (each unit consists of $1,000 (5)(8)(12)
750,000 427,500
principal 0%/13.125% sr. deferred coupon bond, 11/15/03 and
one warrant to purchase 12,860 shares of common stock at
$1.32 per 1,000 shares)
- -------------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., 0%/15% Sr. Sec. Disc. Nts., (8)
1,750,000 796,250
7/15/05
- -------------------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., Units (each unit consists of (5)(8)(12)
1,305,000 681,500
eight 0%/13.875% sr. disc. nts., 12/15/05 and one 0%/13.875%
cv. sr. sub. disc. nt., 12/15/05)
- -------------------------------------------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance Corp., (8)
1,800,000 1,539,000
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00
- -------------------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp., 0%/14% Sr. Disc. Nts., 5/15/02 (8)
950,000 318,250
- -------------------------------------------------------------------------------------------------------------------------
IntelCom Group (USA), Inc., 0%/13.50% Sr. Disc. Nts., 9/15/05 (5)(8)
1,800,000 1,039,500
- -------------------------------------------------------------------------------------------------------------------------
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (8)
1,250,000 1,006,250
- -------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 0%/11.50% Sr. Disc. Nts., 9/1/03 (8)
1,400,000 866,250
- -------------------------------------------------------------------------------------------------------------------------
Omnipoint Corp., Units (each unit represents $1,000 (5)(9)(12)
750,000 743,925
principal amount of 10% cv. sub. nts., 11/29/00 and one
warrant to purchase a share of common stock)
- -------------------------------------------------------------------------------------------------------------------------
PriCellular Wireless Corp.:
0%/12.25% Sr. Sub. Disc. Nts., 10/1/03 (8) 500,000
388,750
0%/14% Sr. Sub. Disc. Nts., 11/15/01 (8) 2,000,000
1,760,000
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
CORPORATE BONDS AND NOTES (CONTINUED)
AMOUNT(1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
UTILITIES (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
TELECOMMUNICATIONS (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------
WinStar Communications, Inc., Units (each unit consists of (5)(8)(12) $
300,000 $ 475,500
two $1,000 principal amount of 0%/14% sr. disc.
nts.,10/15/05 and one cv. sr. sub. disc. nts., 10/15/05)
- -----------------
16,172,800
- -----------------
Total Corporate Bonds and Notes (Cost $84,569,662)
87,849,449
SHARES
- -------------------------------------------------------------------------------------------------------------------------
- -----------
COMMON STOCKS - 1.4%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
American Telecasting, Inc. (14) 6,800
98,600
- -------------------------------------------------------------------------------------------------------------------------
Berg Electronics Corp. (5) 46,220
277,320
- -------------------------------------------------------------------------------------------------------------------------
Celcaribe SA (5)(14) 203,250
241,868
- -------------------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I. (7) 150
150,000
- -------------------------------------------------------------------------------------------------------------------------
EchoStar Communications Corp., Cl. A 6,000
109,125
- -------------------------------------------------------------------------------------------------------------------------
Equitable Bag, Inc. (14) 3,723
9,307
- -------------------------------------------------------------------------------------------------------------------------
Gillett Holdings, Inc., Cl. 2 (7)(14) 10,355
207,100
- -------------------------------------------------------------------------------------------------------------------------
Grand Union Co. (14) 26,511
198,832
- -------------------------------------------------------------------------------------------------------------------------
Gulfstream Holding, Inc. 56
--
- -------------------------------------------------------------------------------------------------------------------------
Gulfstream Housing Corp. 27,850
--
- -------------------------------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc. (14) 11,292
296,415
- -------------------------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. (7) 21,111
21,111
- -------------------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A (14) 9,000
132,750
- -------------------------------------------------------------------------------------------------------------------------
Walter Industries, Inc. (14) 4,837
63,486
- -----------------
Total Common Stocks (Cost $1,554,075)
1,805,914
- -------------------------------------------------------------------------------------------------------------------------
- -----------
PREFERRED STOCKS - 5.2%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BankAmerica Corp., 8.375%, Series K 13,000
336,375
- -------------------------------------------------------------------------------------------------------------------------
Berg Electronics Corp., $3.3438, Series E (9) 14,035
392,980
- -------------------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 8.50% Cum. Cv., Series I
20,000 545,000
- -------------------------------------------------------------------------------------------------------------------------
California Federal Bank, 10.625% Non-Cum., Series B
7,000 759,500
- -------------------------------------------------------------------------------------------------------------------------
Fidelity Federal Bank, 12% Non-Cum. Exchangeable Perpetual
20,000 507,500
Preferred Stock, Series A
- -------------------------------------------------------------------------------------------------------------------------
First Nationwide Bank, 11.50% Non-Cum.
8,500 955,188
- -------------------------------------------------------------------------------------------------------------------------
Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E
16,500 746,625
- -------------------------------------------------------------------------------------------------------------------------
J. Ray McDermott, SA 10,965
195,999
- -------------------------------------------------------------------------------------------------------------------------
K-III Communications Corp., $11.625 Exchangeable, Series B (9)
7,511 747,365
- -------------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum Corp., 8.255% Provisionally Redeemable
6,000 77,250
Income Debt Exchangeable for Stock
- -------------------------------------------------------------------------------------------------------------------------
Navistar International Corp., $6.00 Cv., Series G 2,500
135,625
- -------------------------------------------------------------------------------------------------------------------------
Pantry Pride, Inc., $14.875 Exchangeable, Series B 2,000
207,000
- -------------------------------------------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv., Series B 17,000
301,750
- -------------------------------------------------------------------------------------------------------------------------
SDW Holdings Corp., Units (each unit consists of ten shares (5)(12)
3,750 1,087,500
of sr. exchangeable preferred stock and one cl. B warrant to
purchase one share of common stock)
- -----------------
Total Preferred Stocks (Cost $6,311,457)
6,995,657
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
MARKET VALUE
UNITS
(NOTE 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
RIGHTS, WARRANTS AND CERTIFICATES - 0.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
American Telecasting, Inc. Wts., Exp. 6/99 6,000
$ 36,000
- -------------------------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc.:
Excess Cash Flow Payment Certificates, Series AG-7A (7)
12,400 124
Litigation Trust (7) 39,658
397
- -------------------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Wts., Exp. 2/99 21,112
211
- -------------------------------------------------------------------------------------------------------------------------
Casino America, Inc. Wts., Exp. 11/96 1,631
163
- -------------------------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc. Wts., Exp. 8/03
2,250 50,625
- -------------------------------------------------------------------------------------------------------------------------
Digicon, Inc. Wts., Exp. 7/96 1,566
98
- -------------------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc. Wts., Exp. 10/03 (5)
630 3,150
- -------------------------------------------------------------------------------------------------------------------------
Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99
500 2,500
- -------------------------------------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 7/96 26,410
198,075
- -------------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc. Wts., Exp. 7/05 (5)
52,500 105,000
- -------------------------------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc. Wts., Exp. 11/99 (5) 400
10,000
- -------------------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02 (5) 950
--
- -------------------------------------------------------------------------------------------------------------------------
IntelCom Group, Inc. Wts., Exp. 9/05 (5) 5,940
23,760
- -------------------------------------------------------------------------------------------------------------------------
Jewel Recovery LP, Participation Units of Limited Partners'
Interest 2,360
--
- -------------------------------------------------------------------------------------------------------------------------
People's Choice TV Corp. Wts., Exp. 6/00 350
3,500
- -------------------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 11/03 28,000
276,500
Exp. 6/05 1,600
7,200
- -------------------------------------------------------------------------------------------------------------------------
Southland Corp. Wts., Exp. 3/96 400
500
- -------------------------------------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96 (5) 744
37
- -------------------------------------------------------------------------------------------------------------------------
Trizec Corp. Wts., Exp. 7/99 CAD 3,970
4,134
- -------------------------------------------------------------------------------------------------------------------------
UGI Corp. Wts., Exp. 3/98 6,000
300
- -------------------------------------------------------------------------------------------------------------------------
United International Securities Ltd. Wts., Exp. 11/99 1,440
41,130
- ----------------
Total Rights, Warrants and Certificates (Cost $308,096)
763,404
DATE STRIKE CONTRACTS
- -------------------------------------------------------------------------------------------------------------------------
- -----------
PUT OPTIONS PURCHASED - 0.0%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Morocco (Kingdom of) Loan Participation Agreement, Tranche Jan. $60.25
1,000
1
A, 6.594%, 1/1/09, Put Opt. (Cost $19,000)
PRINCIPAL
AMOUNT (1)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
STRUCTURED INSTRUMENTS - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Goldman, Sachs & Co. Argentina Local Market Securities (7) $
782,608 765,000
Trust, 11.30%, 4/1/00 (representing debt of Argentina
(Republic of) Bonos del Tesoro Bonds, Series 10, 5.742%, 4/1/00 and
an interest rate swap between Goldman Sachs and the Trust)
- -------------------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked (3)
200,000 197,000
Nts., 11.318%, 2/15/96 (indexed to the Nota Do Tesouro
Nacional, Zero Coupon, 2/15/96)
- -------------------------------------------------------------------------------------------------------------------------
United Mexican States, Linked Nts. (indexed to the greater (5)
300,000 305,475
of Cetes Option Amount or USD LIBOR Option Amount, 11/27/96)
- ----------------
Total Structured Instruments (Cost $1,279,946)
1,267,475
</TABLE>
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
Statement of Investments (Continued)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
MARKET VALUE
AMOUNT (1)
(NOTE 1)
<S> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
REPURCHASE AGREEMENT - 2.1%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Repurchase agreement with PaineWebber, Inc., 5.90%, dated 12/29/95,
to be repurchased at $2,781,822 on 1/2/96, collateralized by U.S.
Treasury Nts., 6.875%, 8/31/99, with a value of $993,387, and U.S.
Treasury Bonds, 7.125%-7.625%, 11/15/22-2/15/23, with a value of
$1,871,730 (Cost $2,780,000) $ 2,780,000
$ 2,780,000
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $125,812,139)
98.6%
131,522,956
- -------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES
1.4 1,927,824
------------------
- ----------------
NET ASSETS 100.0%
133,450,780
===================
=================
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those denoted in
the following currencies:
AUD - Australian Dollar ITL - Italian Lira
CAD - Canadian Dollar JPY - Japanese Yen
DEM - German Deutsche NLG - Netherlands
Mark Guilder
DKK - Danish Krone NOK - Norwegian Krone
ESP - Spanish Peseta NZD - New Zealand Dollar
FRF - French Franc PLZ - Polish Zloty
GBP - British Pound PTE - Portuguese Escudo
Sterling
HUF - Hungarian Forint SEK - Swedish Krona
IDR - Indonesian Rupiah THB - Thai Baht
IEP - Irish Punt
2. Indexed instrument for which the principal amount and/or interest due
at maturity is affected by the relative value of a foreign currency.
3. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
4. Represents the current interest rate for a variable rate security.
5. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $10,828,494 or 8.11% of the Fund's
net assets, at December 31, 1995.
6. A sufficient amount of liquid assets has been designated to cover
outstanding written call options, as follows:
<TABLE>
<CAPTION>
Principal
Subject Expiration Exercise Premium
Market Value
To Call Date Price Received
See Note 1
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
Bulgaria (Republic of) Interest Arrears
Bonds, 6.75%, 7/28/11 100,000 1/96 $45 $1,430
$1,390
</TABLE>
7. Identifies issues considered to be illiquid - See Note 7 of Notes to
Financial Statements.
8. Denotes a step bond: a zero coupon bond that converts to a fixed rate
of interest at a designated future date.
9. Interest or dividend is paid in kind.
10. Non-income producing--issuer is in default of interest payment.
11. Partial interest payment received.
12. Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units
which represent debt securities, principal amount disclosed represents
total underlying principal.
13. Represents the current interest rate for an increasing rate security.
14. Non-income producing security.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Bond Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION> Principal
Market Value
Amount(1)
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Certificates of Deposit - 1.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Citibank CD:
19%, 1/19/96 (2) IDR 2,853,750,000
$ 1,248,126
27.40%, 3/22/96 (2) HUF 139,510,000
1,021,112
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Indonesia (Republic of) Bank Negara CD, Zero Coupon,
15.914%, 6/17/96 (2)(3) IDR 2,000,000,000
805,011
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Krungthai Thanakit CD, Zero Coupon, 11.533%, 2/29/96
(2)(3) THB 25,000,000
968,966
- -----------------
Total Certificates of Deposit (Cost $4,063,089)
4,043,215
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Mortgage-Backed Obligations - 18.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Government Agency - 11.5%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
FHLMC/FNMA/Sponsored - 7.7%
- ------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
7%, 11/1/25 1,888,319
1,903,653
7%, 11/1/25 7,990,664
8,055,548
Collateralized Mtg. Obligations, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates, 8.75%
11/25/05 3,000,000
3,262,500
Gtd. Real Estate Mtg. Investment Conduit Pass-Through
Certificates, 10.40%, 4/25/19 2,000,000
2,193,120
Interest-Only Stripped Mtg.-Backed Security, Trust 257, Cl.
2, 11.79%, 2/1/24 (4) 2,638,404
739,990
- -----------------
16,154,811
- -------------------------------------------------------------------------------------------------------------------------
- -----------
GNMA/Guaranteed - 3.8%
- ------------------------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn.:
6%, 10/20/25 4,986,569
5,036,435
6%, 10/20/24 2,939,612
3,009,429
- -----------------
8,045,864
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Private - 6.8%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Commercial - 3.1%
- ------------------------------------------------------------------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass-
Through Certificates, Series 1994-C1:
Cl. 2-D, 8.70%, 9/25/25 (5) 1,500,000
1,617,187
Cl. 2-E, 8.70%, 9/25/25 (5) 1,500,000
1,604,531
- ------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through
Certificates, Series 1995-C2, Cl. C, 7.70%, 6/15/21 (6) 993,670
1,025,033
- ------------------------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates:
Series 1992-CHF, Cl. C, 8.25%, 12/25/20 1,053,588
1,079,599
Series 1992-CHF, Cl. E, 8.25%, 12/25/20 931,256
913,795
Series 1994-C1, Cl. A, 7.25%, 6/25/26 302,117
301,740
- -----------------
6,541,885
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Multi-Family - 3.7%
- ------------------------------------------------------------------------------------------------------------------------------
Countrywide Funding Corp., Series 1993-12, Cl. Bl, 1,000,000
942,500
6.625%, 2/25/24
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION> Principal
Market Value
Mortgage-Backed Obligations (Continued) Amount(1)
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Private (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Multi-Family (Continued)
- ------------------------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates:
Series 1991-M5, Cl. A, 9%, 3/25/17 $ 2,295,071
$ 2,429,907
Series 1994-C1, Cl. C, 8%, 6/25/26 1,500,000
1,603,594
Series 1995-C1, Cl. D, 6.90%, 2/25/27 3,000,000
2,865,000
- -----------------
7,841,001
- -----------------
Total Mortgage-Backed Obligations (Cost $37,340,024)
38,583,561
- -------------------------------------------------------------------------------------------------------------------------
- -----------
U.S. Government Obligations - 40.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Treasury - 40.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
U.S. Treasury Bonds:
6.875%, 8/15/25 8,000,000
9,027,495
7.125%, 2/15/23 3,000,000
3,427,500
8%, 11/15/21 5,000,000
6,259,375
- ------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
6%, 12/31/97 3,000,000
3,047,811
6.25%, 5/31/00 10,000,000
10,343,750
6.375%, 6/30/97 1,000,000
1,017,187
6.50%, 5/15/05-8/15/05 18,000,000
19,182,809
6.875%, 3/31/00 5,000,000
5,289,065
7.25%, 5/15/04-8/15/04 7,000,000
7,787,812
7.375%, 11/15/97 2,000,000
2,076,250
7.50%, 2/15/05 5,000,000
5,676,559
7.75%, 12/31/99-1/31/00 6,000,000
6,519,374
7.875%, 6/30/96-11/15/04 3,000,000
3,329,999
9.25%, 8/15/98 2,000,000
2,193,124
- -----------------
Total U.S. Government Obligations (Cost $79,215,729)
85,178,110
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Foreign Government Obligations - 13.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Australia (Commonwealth of) Bonds, 12.50%, 1/15/98 AUD
960,000 782,889
- ------------------------------------------------------------------------------------------------------------------------------
Canada (Government of) Bonds:
7.75%, 9/1/99 CAD 347,000
266,514
Series A-76, 9%, 6/1/25 CAD 321,000
274,798
- ------------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) 1989-1990 Integrated Loan Facility
Bonds, 6.875%, 7/1/01 (6)(7) 1,714,400
1,594,392
- ------------------------------------------------------------------------------------------------------------------------------
Corporacion Andina de Fomento Sr. Unsec. Debs.:
6.625%, 10/14/98 (5) 1,000,000
999,375
7.25%, 4/30/98 (5) 1,000,000
998,125
- ------------------------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds:
7%, 11/10/24 DKK 6,300,000
1,014,039
8%, 3/15/06 DKK 1,880,000
357,728
- ------------------------------------------------------------------------------------------------------------------------------
Financiera Energetica Nacional:
Nts., 6.625%, 12/13/96 2,350,000
2,347,062
SA Medium-Term Nts., 9%, 11/8/99 400,000
419,500
- ------------------------------------------------------------------------------------------------------------------------------
France (Government of) Obligation Assimilable du Tresor
Debs., 9.50%, 6/25/98 FRF 1,196,000
267,600
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION> Principal
Market Value
Foreign Government Obligations (Continued) Amount(1)
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Germany (Republic of) Bonds:
7.75%, 10/1/04 DEM $ 5,350,000
$ 4,106,853
Series 94, 6.25%, 1/4/24 DEM 2,900,000
1,887,370
- ------------------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development
Bonds, 12.50%, 7/25/97 NZD 1,000,000
696,248
- ------------------------------------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, Buoni del Tesoro
Poliennali, 10.50%, 4/1/00 ITL 4,515,000,000
2,872,821
- ------------------------------------------------------------------------------------------------------------------------------
National Treasury Management Agency (Irish Government)
Bonds, 8%, 10/18/00 IEP 405,000
682,226
- ------------------------------------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD
1,720,000 1,155,621
- ------------------------------------------------------------------------------------------------------------------------------
Norwegian Government Bonds, 9.50%, 10/31/02 NOK
11,340,000 2,124,639
- ------------------------------------------------------------------------------------------------------------------------------
Poland (Republic of) Debs., 7.75%, 7/13/00 1,500,000
1,530,000
- ------------------------------------------------------------------------------------------------------------------------------
Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio
Prazo, 11.875%, 2/23/00 PTE 65,000,000
468,838
- ------------------------------------------------------------------------------------------------------------------------------
South Africa (Republic of) Debs., 9.625%, 12/15/99 1,000,000
1,082,500
- ------------------------------------------------------------------------------------------------------------------------------
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del
Estado, 12.25%, 3/25/00 ESP 156,000,000
1,405,755
- ------------------------------------------------------------------------------------------------------------------------------
Sweden (Kingdom of) Bonds, Series 1028, 11%, 1/21/99 SEK
4,400,000 714,422
- ------------------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury:
Debs., 8.50%, 12/7/05 GBP 337,000
562,305
Nts., 10%, 2/26/01 GBP 310,000
544,176
- ------------------------------------------------------------------------------------------------------------------------------
Western Australia Treasury Corp. Gtd. Bonds, Series 98,
12.50%, 4/1/98 AUD 200,000
164,222
- -----------------
Total Foreign Government Obligations (Cost $28,915,289)
29,320,018
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Municipal Bonds and Notes - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Pinole, California Redevelopment Agency Tax Allocation
Taxable Bonds, Pinole Vista Redevelopment, Series B,
8.35%, 8/1/17 670,000
733,429
- ------------------------------------------------------------------------------------------------------------------------------
Dade County, Florida Educational Facilities Authority:
Exchangeable Revenue Bonds, University of Miami
Prerefunded, MBIA Insured, 7.65%, 4/1/10 175,000
201,294
Revenue Bonds, University of Miami, MBIA Insured, 7.65%
4/1/10 205,000
230,154
Taxable Exchange Revenue Bonds, University of Miami,
MBIA Insured, 9.70%, 4/1/10 120,000
134,724
- ------------------------------------------------------------------------------------------------------------------------------
Port of Portland, Oregon Special Obligation Taxable
Revenue Bonds, PAMCO Project, 9.20%, 5/15/22
500,000 546,886
- -----------------
Total Municipal Bonds and Notes (Cost $1,663,728)
1,846,487
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Corporate Bonds and Notes - 16.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Basic Industry - 2.7%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Chemicals - 1.2%
- ------------------------------------------------------------------------------------------------------------------------------
Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03
2,100,000 2,389,670
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Paper - 1.5%
- ------------------------------------------------------------------------------------------------------------------------------
Boise Cascade Corp., 9.90% Nts., 3/15/00 750,000
850,994
- ------------------------------------------------------------------------------------------------------------------------------
Noranda Forest, Inc., 11% Debs., 7/15/98 CAD 1,000,000
805,629
</TABLE>
Oppenheimer Variable Account Funds - Oppenheimer Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION> Principal
Market Value
Corporate Bonds and Notes (Continued) Amount(1)
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Basic Industry (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Chemicals (Continued)
- ------------------------------------------------------------------------------------------------------------------------------
Scotia Pacific Holding Co., 7.95% Timber Collateralized
Nts., 7/20/15 $ 1,546,483
$ 1,571,753
- -----------------
3,228,376
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Consumer Related - 2.6%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Food/Beverages/Tobacco - 0.8%
- ------------------------------------------------------------------------------------------------------------------------------
Dr. Pepper/Seven-Up Cos., Inc., 0%/11.50% Sr. Sub. Disc.
Nts., 11/1/02 (8) 1,315,000
1,239,388
- ------------------------------------------------------------------------------------------------------------------------------
Philip Morris Cos., Inc., 8.875% Nts., 7/1/96 500,000
507,702
- -----------------
1,747,090
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Healthcare - 0.6%
- ------------------------------------------------------------------------------------------------------------------------------
R.P. Scherer Corp., 6.75% Sr. Nts., 2/1/04 1,250,000
1,189,530
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Hotel/Gaming - 0.2%
- ------------------------------------------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc., 6.75% Nts., 7/15/03 375,000
379,439
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Textile/Apparel - 0.5%
- ------------------------------------------------------------------------------------------------------------------------------
Fruit of the Loom, Inc., 7% Debs., 3/15/11 1,097,000
1,108,417
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Toys - 0.5%
- ------------------------------------------------------------------------------------------------------------------------------
Mattel, Inc., 6.875% Sr. Nts., 8/1/97 1,000,000
1,017,927
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Energy - 3.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
BP America, Inc., 10.875% Nts., 8/1/01 CAD 650,000
551,957
- ------------------------------------------------------------------------------------------------------------------------------
Coastal Corp.:
11.75% Sr. Debs., 6/15/06 2,000,000
2,126,614
9.75% Sr. Debs., 8/1/03 200,000
238,950
- ------------------------------------------------------------------------------------------------------------------------------
Enron Corp., 9.875% Debs., 6/15/03 375,000
457,052
- ------------------------------------------------------------------------------------------------------------------------------
McDermott, Inc., 9.375% Nts., 3/15/02 400,000
454,472
- ------------------------------------------------------------------------------------------------------------------------------
Mitchell Energy & Development Corp., 9.25% Sr. Nts.
1/15/02 1,000,000
1,146,689
- ------------------------------------------------------------------------------------------------------------------------------
Sonat, Inc., 9.50% Nts., 8/15/99 250,000
278,659
- ------------------------------------------------------------------------------------------------------------------------------
Southwest Gas Corp., 9.75% Debs., Series F, 6/15/02 500,000
585,022
- ------------------------------------------------------------------------------------------------------------------------------
Tenneco, Inc.:
10% Debs., 3/15/08 400,000
497,656
7.875% Nts., 10/1/02 650,000
709,766
- -----------------
7,046,837
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Financial Services - 1.7%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Banks & Thrifts - 1.0%
- ------------------------------------------------------------------------------------------------------------------------------
Banco Ganadero SA, Zero Coupon Sr. Unsub. Unsec. Nts.
9.931%, 6/15/96 (3)(5) 500,000
479,040
- ------------------------------------------------------------------------------------------------------------------------------
BankAmerica Corp., 7.50% Sr. Nts., 3/15/97 100,000
102,362
- ------------------------------------------------------------------------------------------------------------------------------
Chemical New York Corp., 9.75% Sub. Capital Nts., 6/15/99
200,000 224,742
- ------------------------------------------------------------------------------------------------------------------------------
First Chicago Corp.:
11.25% Sub. Nts., 2/20/01 750,000
923,495
9% Sub. Nts., 6/15/99 150,000
165,177
- ------------------------------------------------------------------------------------------------------------------------------
First Chicago NBD Bancorp, 7.25% Sub. Debs., 8/15/04
165,000 176,247
- ------------------------------------------------------------------------------------------------------------------------------
First Fidelity Bancorporation, 8.50% Sub. Capital Nts.,
4/1/98 100,000
105,456
- -----------------
2,176,519
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Diversified Financial - 0.7%
- ------------------------------------------------------------------------------------------------------------------------------
American Car Line Co., 8.25% Equipment Trust
Certificates, Series 1993-A, 4/15/08 627,000
659,134
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION> Principal
Market Value
Corporate Bonds and Notes (Continued) Amount(1)
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Financial Services (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Diversified Financial (Continued)
- ------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 8.375% Nts., 2/15/99 $
700,000 $ 744,198
- -----------------
1,403,332
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Manufacturing - 0.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Automotive - 0.9%
- ------------------------------------------------------------------------------------------------------------------------------
Chrysler Corp., 10.95% Debs., 8/1/17 800,000
898,110
- ------------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
5.50% Nts., 12/15/01 300,000
289,647
7.75% Nts., 4/15/97 700,000
713,318
- -----------------
1,901,075
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Media - 3.9%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Cable Television - 2.2%
- ------------------------------------------------------------------------------------------------------------------------------
Time Warner Entertainment LP/Time Warner, Inc., 8.375%
Sr. Debs., 3/15/23 1,850,000
2,009,405
- ------------------------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 2,200,000
2,588,914
- -----------------
4,598,319
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Diversified Media - 1.3%
- ------------------------------------------------------------------------------------------------------------------------------
GSPI Corp., 10.15% First Mtg. Bonds, 6/24/10 (5) 1,151,691
1,389,228
- ------------------------------------------------------------------------------------------------------------------------------
News America Holdings, Inc.:
10.125% Gtd. Sr. Debs., 10/15/12 500,000
608,130
12% Sr. Nts., 12/15/01 500,000
558,673
- ------------------------------------------------------------------------------------------------------------------------------
Time Warner, Inc., 9.15% Debs., 2/1/23 300,000
342,093
- -----------------
2,898,124
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Entertainment/Film - 0.4%
- ------------------------------------------------------------------------------------------------------------------------------
Columbia Pictures Entertainment, Inc., 9.875% Sr. Sub.
Nts., 2/1/98 500,000
541,242
- ------------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co., 10% Nts., 6/15/01 250,000
254,730
- -----------------
795,972
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Retail - 0.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Drug Stores - 0.3%
- ------------------------------------------------------------------------------------------------------------------------------
Hook-SupeRx, Inc., 10.125% Sr. Nts., 6/1/02 600,000
657,191
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Transportation - 0.2%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Railroads - 0.2%
- ------------------------------------------------------------------------------------------------------------------------------
Union Pacific Corp., 9.65% Medium-Term Nts., 4/17/00
400,000 455,554
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Utilities - 1.3%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Electric Utilities - 1.0%
- ------------------------------------------------------------------------------------------------------------------------------
Commonwealth Edison Co., 6.50% Nts., 7/15/97
775,000 779,528
- ------------------------------------------------------------------------------------------------------------------------------
Long Island Lighting Co., 7% Nts., 3/1/04 150,000
144,552
- ------------------------------------------------------------------------------------------------------------------------------
New Zealand Electric Corp., 10% Debs., 6/15/9 NZD
650,000 426,765
- ------------------------------------------------------------------------------------------------------------------------------
Public Service Co. of Colorado, 8.75% First Mtg. Bonds,
3/1/22 750,000
852,330
- -----------------
2,203,175
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Telecommunications - 0.3%
- ------------------------------------------------------------------------------------------------------------------------------
GTE Corp., 9.375% Debs., 12/1/00 500,000
567,703
- -----------------
Total Corporate Bonds and Notes (Cost $34,673,470)
35,764,250
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note
1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Preferred Stocks - 0.5%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Atlantic Richfield Co., 9% Exchangeable Notes for Common
Stock of Lyondell Petrochemical Co., 9/15/97 $ 15,000
$ 352,500
- ------------------------------------------------------------------------------------------------------------------------------
BankAmerica Corp., 8.375%, Series K 25,000
646,875
- -----------------
Total Preferred Stocks (Cost $1,076,533)
999,375
Principal
Amount(1)
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Structured Instruments - 0.5%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Merrill Lynch & Co., Inc. Units, 9.75%, 6/15/99
(representing debt of Chemical Banking Corp., sub. capital
nts., and equity of Citicorp, 7.75% preferred, series 22) (Cost
$1,100,540) (7)(9) $ 1,000,000
1,151,000
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Repurchase Agreement - 4.0%
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Repurchase agreement with First Chicago Capital Markets,
5.90%, dated 12/29/95, to be repurchased at $8,505,572 on
1/2/96, collateralized by U.S. Treasury Nts., 5.125%-8.75%,
12/31/96-11/5/04, with a value of $4,613,862, U.S. Treasury
Bonds, 6.25%-11.25%, 8/15/03-8/15/23, with a value of
$2,796,111, and U.S. Treasury Bills maturing 11/14/96, with
a value of $1,267,996 (Cost $8,500,000) 8,500,000
8,500,000
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Total Investments, at Value (Cost $196,548,402) 97.2%
205,386,016
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Other Assets Net of Liabilities 2.8
5,845,754
--------------
- -----------------
Net Assets 100.0% $
211,231,770
==============
=================
</TABLE>
1. Principal amount is reported in U.S. Dollars, except for those denoted
in the following currencies:
AUD - Australian Dollar DR - Indonesian Rupiah
CAD - Canadian Dollar IEP - Irish Punt
DEM - German Deutsche ITL - Italian Lira
Mark
DKK - Danish Krone NOK - Norwegian Krone
ESP - Spanish Peseta NZD - New Zealand Dollar
FRF - French Franc PTE - Portuguese Escudo
GBP - British Pound SEK - Swedish Krona
Sterling
HUF - Hungarian Forint THB - Thai Baht
2. Indexed instrument for which the principal amount and/or interest due
at maturity is affected by the relative value of a foreign currency.
3. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
4. Interest-Only Strips represent the right to receive the monthly
interest payments on an underlying pool of mortgage loans. These
securities typically decline in price as interest rates decline. Most
other fixed-income securities increase in price when interest rates
decline.
The principal amount of the underlying pool represents the notional amount
on which current interest is calculated. The price of these securities is
typically more sensitive to changes in prepayment rates than traditional
mortgage-backed securities (for example, GNMA pass-throughs). Interest
rates disclosed represent current yields based upon the current cost
basis and estimated timing and amount of future cash flows.
5. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $7,087,486 or 3.36% of the Fund's
net assets, at December 31, 1995.
6. Represents the current interest rate for a variable rate security.
7. Identifies issues considered to be illiquid - See Note 7 of Notes to
Financial Statements.
8. Denotes a step bond: a zero coupon bond that converts to a fixed rate
of interest at a designated future date.
9. Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units
which represent debt securities, principal amount disclosed represents
total underlying principal.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION> Principal
Market Value
Amount (Note
1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Convertible Corporate Bonds and Notes - 1.1%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Danka Business Systems PLC, 6.75% Cv. Sub. Nts., 4/1/02 $
800,000 $ 1,122,000
- -----------------------------------------------------------------------------------------------------------------------------
PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 (1)
850,000 709,750
- -----------------------------------------------------------------------------------------------------------------------------
Telxon Corp., 5.75% Cv. Debs., 1/1/03 (1) 1,500,000
1,627,500
- ----------------
Total Convertible Corporate Bonds and Notes (Cost $3,150,000)
3,459,250
Shares
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Common Stocks - 91.2%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Basic Materials - 0.2%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Paper - 0.2%
- -----------------------------------------------------------------------------------------------------------------------------
Visioneer, Inc. (2) 27,300
607,425
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Cyclicals - 24.4%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Autos & Housing - 1.2%
ITI Technologies, Inc. (2) 80,000
2,380,000
- -----------------------------------------------------------------------------------------------------------------------------
NHP, Inc. (2) 100,000
1,850,000
- ----------------
4,230,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Leisure & Entertainment - 7.1%
- -----------------------------------------------------------------------------------------------------------------------------
Apple South, Inc. 121,100
2,603,650
- -----------------------------------------------------------------------------------------------------------------------------
Applebee's International, Inc. 75,000
1,706,250
- -----------------------------------------------------------------------------------------------------------------------------
CKE Restaurants, Inc. 190,000
3,040,000
- -----------------------------------------------------------------------------------------------------------------------------
Consolidated Products, Inc. 44,000
649,000
- -----------------------------------------------------------------------------------------------------------------------------
Department 56, Inc. (2) 60,300
2,314,012
- -----------------------------------------------------------------------------------------------------------------------------
La Quinta Inns, Inc. 85,000
2,326,875
- -----------------------------------------------------------------------------------------------------------------------------
Landry's Seafood Restaurants, Inc. (2) 100,000
1,706,250
- -----------------------------------------------------------------------------------------------------------------------------
Lone Star Steakhouse & Saloon (2) 50,000
1,918,750
- -----------------------------------------------------------------------------------------------------------------------------
Morrow Snowboards, Inc. (2) 59,500
966,875
- -----------------------------------------------------------------------------------------------------------------------------
Play By Play Toys & Novelties, Inc. (2) 63,800
933,075
- -----------------------------------------------------------------------------------------------------------------------------
Quality Dining, Inc. (2) 94,500
2,291,625
- -----------------------------------------------------------------------------------------------------------------------------
Sonic Corp. 95,000
1,805,000
- -----------------------------------------------------------------------------------------------------------------------------
Studio Plus Hotels, Inc. (2) 37,500
965,625
- ----------------
23,226,987
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Media - 0.8%
- -----------------------------------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc., Cl. A (2) 55,100
1,666,775
- -----------------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., Cl. A (2) 50,000
862,500
- ----------------
2,529,275
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Retail: General - 4.9%
- -----------------------------------------------------------------------------------------------------------------------------
Donnkenny, Inc. 140,000
2,537,500
- -----------------------------------------------------------------------------------------------------------------------------
Fila Holding SpA, ADR 58,000
2,639,000
- -----------------------------------------------------------------------------------------------------------------------------
Marisa Christina, Inc. (2) 46,700
793,900
- -----------------------------------------------------------------------------------------------------------------------------
Nautica Enterprises, Inc. 52,500
2,296,875
- -----------------------------------------------------------------------------------------------------------------------------
Tommy Hilfiger Corp. 71,700
3,038,287
- -----------------------------------------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A 67,500
1,687,500
- -----------------------------------------------------------------------------------------------------------------------------
Wolverine World Wide, Inc. 89,000
2,803,500
- ----------------
15,796,562
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Retail: Specialty - 10.4%
- -----------------------------------------------------------------------------------------------------------------------------
adidas AG, ADS (1)(2) 24,000
637,500
- -----------------------------------------------------------------------------------------------------------------------------
Boise Cascade Office Products Corp. (2) 50,000
2,137,500
- -----------------------------------------------------------------------------------------------------------------------------
Copart, Inc. (2) 103,100
2,706,375
- -----------------------------------------------------------------------------------------------------------------------------
Corporate Express, Inc. 82,500
2,485,312
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note
1)
Common Stocks (Continued)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Cyclicals (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Retail: Specialty (Continued)
- -----------------------------------------------------------------------------------------------------------------------------
CUC International, Inc. 59,000
$ 2,013,375
- -----------------------------------------------------------------------------------------------------------------------------
Discount Auto Parts, Inc. (2) 60,000
1,867,500
- -----------------------------------------------------------------------------------------------------------------------------
General Nutrition Cos., Inc. (2) 218,800
5,032,400
- -----------------------------------------------------------------------------------------------------------------------------
Hollywood Entertainment Corp. 87,500
732,812
- -----------------------------------------------------------------------------------------------------------------------------
Men's Wearhouse, Inc. (2) 130,100
3,350,075
- -----------------------------------------------------------------------------------------------------------------------------
Moovies, Inc. (2) 137,200
1,852,200
- -----------------------------------------------------------------------------------------------------------------------------
MSC Industrial Direct Co., Inc., Cl. A (2) 35,000
962,500
- -----------------------------------------------------------------------------------------------------------------------------
Nike, Inc., Cl. B 22,000
1,531,750
- -----------------------------------------------------------------------------------------------------------------------------
OfficeMax, Inc. (2) 45,750
1,023,656
- -----------------------------------------------------------------------------------------------------------------------------
Petco Animal Supplies, Inc. (2) 80,000
2,340,000
- -----------------------------------------------------------------------------------------------------------------------------
Rocky Mountain Chocolate Factory, Inc. (2) 35,000
420,000
- -----------------------------------------------------------------------------------------------------------------------------
Staples, Inc. 67,500
1,645,312
- -----------------------------------------------------------------------------------------------------------------------------
Viking Office Products, Inc. (2) 65,000
3,022,500
- ----------------
33,760,767
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Non-Cyclicals - 21.3%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Beverages - 0.3%
- -----------------------------------------------------------------------------------------------------------------------------
Boston Beer Co., Inc., Cl. A (2) 9,800
232,750
- -----------------------------------------------------------------------------------------------------------------------------
Canandaigua Wine Co., Inc., Cl. A (2) 20,000
652,500
- ----------------
885,250
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Education - 0.2%
- -----------------------------------------------------------------------------------------------------------------------------
National Education Corp. (2) 80,000
650,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Food - 1.1%
- -----------------------------------------------------------------------------------------------------------------------------
Opta Food Ingredients, Inc. (2) 35,200
453,200
- -----------------------------------------------------------------------------------------------------------------------------
Safeway, Inc. (2) 60,000
3,090,000
- ----------------
3,543,200
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Healthcare/Drugs - 5.0%
- -----------------------------------------------------------------------------------------------------------------------------
Agouron Pharmaceuticals, Inc. (2) 40,000
1,310,000
- -----------------------------------------------------------------------------------------------------------------------------
Bio-Vascular, Inc. (2) 47,900
562,825
- -----------------------------------------------------------------------------------------------------------------------------
Dura Pharmaceuticals, Inc. (2) 75,000
2,606,250
- -----------------------------------------------------------------------------------------------------------------------------
Elan Corp. PLC, ADR (2) 45,000
2,188,125
- -----------------------------------------------------------------------------------------------------------------------------
Ethical Holdings PLC, Sponsored ADR (2) 50,000
450,000
- -----------------------------------------------------------------------------------------------------------------------------
Gilead Sciences, Inc. (2) 49,300
1,577,600
- -----------------------------------------------------------------------------------------------------------------------------
Martek Biosciences Corp. (2) 40,000
1,010,000
- -----------------------------------------------------------------------------------------------------------------------------
Matrix Pharmaceutical, Inc. (2) 30,400
570,000
- -----------------------------------------------------------------------------------------------------------------------------
Northfield Laboratories, Inc. (2) 50,000
943,750
- -----------------------------------------------------------------------------------------------------------------------------
Protein Design Labs, Inc. 7,500
173,437
- -----------------------------------------------------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. (2) 100,000
4,900,000
- ----------------
16,291,987
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Healthcare/Supplies & Services - 14.3%
- -----------------------------------------------------------------------------------------------------------------------------
AHI Healthcare Systems, Inc. (2) 138,500
796,375
- -----------------------------------------------------------------------------------------------------------------------------
AmeriSource Health Corp., Cl. A (2) 115,500
3,811,500
- -----------------------------------------------------------------------------------------------------------------------------
ARV Assisted Living, Inc. (2) 150,000
1,762,500
- -----------------------------------------------------------------------------------------------------------------------------
Compdent Corp. (2) 50,000
2,075,000
- -----------------------------------------------------------------------------------------------------------------------------
Emeritus Corp. (2) 100,000
1,162,500
- -----------------------------------------------------------------------------------------------------------------------------
Guidant Corp. 85,000
3,591,250
- -----------------------------------------------------------------------------------------------------------------------------
Gulf South Medical Supply, Inc. 73,400
2,220,350
- -----------------------------------------------------------------------------------------------------------------------------
HealthCare COMPARE Corp. (2) 50,000
2,175,000
- -----------------------------------------------------------------------------------------------------------------------------
HemaSure, Inc. (2) 36,000
459,000
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note
1)
Common Stocks (Continued)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Non-Cyclicals (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Healthcare/Supplies & Services (Continued)
- -----------------------------------------------------------------------------------------------------------------------------
Horizon/CMS Healthcare Corp. (2) 63,700
$ 1,608,425
- -----------------------------------------------------------------------------------------------------------------------------
Lincare Holdings, Inc. (2) 59,200
1,480,000
- -----------------------------------------------------------------------------------------------------------------------------
National Surgery Centers, Inc. (2) 14,500
333,500
- -----------------------------------------------------------------------------------------------------------------------------
Omnicare, Inc. 76,800
3,436,800
- -----------------------------------------------------------------------------------------------------------------------------
OrNda Healthcorp (2) 105,000
2,441,250
- -----------------------------------------------------------------------------------------------------------------------------
Owen Healthcare, Inc. 63,000
1,740,375
- -----------------------------------------------------------------------------------------------------------------------------
Pediatrix Medical Group, Inc. (2) 120,000
3,300,000
- -----------------------------------------------------------------------------------------------------------------------------
PhyCor, Inc. 65,000
3,286,562
- -----------------------------------------------------------------------------------------------------------------------------
Physician Reliance Network, Inc. (2) 40,000
1,590,000
- -----------------------------------------------------------------------------------------------------------------------------
Physicians Resource Group, Inc. (2) 75,000
1,490,625
- -----------------------------------------------------------------------------------------------------------------------------
Quorum Health Group, Inc. (2) 56,000
1,232,000
- -----------------------------------------------------------------------------------------------------------------------------
Renal Treatment Centers, Inc. (2) 50,000
2,200,000
- -----------------------------------------------------------------------------------------------------------------------------
Total Renal Care Holdings, Inc. (2) 52,600
1,551,700
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Healthcare, Inc. 30,000
1,395,000
- -----------------------------------------------------------------------------------------------------------------------------
United Dental Care, Inc. (2) 30,000
1,237,500
- ----------------
46,377,212
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Household Goods - 0.4%
- -----------------------------------------------------------------------------------------------------------------------------
Ultralife Batteries, Inc. (2) 60,000
1,440,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Energy - 3.4%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Energy Services & Producers - 2.9%
- -----------------------------------------------------------------------------------------------------------------------------
Core Laboratories NV (2) 50,300
603,600
- -----------------------------------------------------------------------------------------------------------------------------
Cross Timbers Oil Co. 30,800
542,850
- -----------------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. (2) 56,900
1,920,375
- -----------------------------------------------------------------------------------------------------------------------------
Energy Ventures, Inc. (2) 75,200
1,898,800
- -----------------------------------------------------------------------------------------------------------------------------
Nabors Industries, Inc. (2) 150,000
1,668,750
- -----------------------------------------------------------------------------------------------------------------------------
Newfield Exploration Co. (2) 20,000
540,000
- -----------------------------------------------------------------------------------------------------------------------------
NUMAR Corp. (2) 36,000
400,500
- -----------------------------------------------------------------------------------------------------------------------------
Stone Energy Corp. (2) 35,000
538,125
- -----------------------------------------------------------------------------------------------------------------------------
Weatherford Enterra, Inc. (2) 50,000
1,443,750
- ----------------
9,556,750
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Oil-Integrated - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Valero Energy Corp. 60,000
1,470,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Financial - 2.0%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Diversified Financial - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Advanta Corp., Cl. B 40,000
1,455,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Insurance - 1.5%
- -----------------------------------------------------------------------------------------------------------------------------
Berkley (W.R.) Corp. 40,000
2,150,000
- -----------------------------------------------------------------------------------------------------------------------------
CapMAC Holdings, Inc. (2) 70,600
1,773,825
- -----------------------------------------------------------------------------------------------------------------------------
First Commonwealth, Inc. (2) 18,000
468,000
- -----------------------------------------------------------------------------------------------------------------------------
Prudential Reinsurance Holdings, Inc. 24,900
582,037
- ----------------
4,973,862
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial - 10.6%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial Materials - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Kennametal, Inc. 52,000
1,651,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial Services - 8.3%
- -----------------------------------------------------------------------------------------------------------------------------
CIBER, Inc. (2) 73,500
1,718,062
- -----------------------------------------------------------------------------------------------------------------------------
CKS Group, Inc. (2) 11,600
452,400
- -----------------------------------------------------------------------------------------------------------------------------
Computer Horizons Corp. 60,000
2,280,000
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note
1)
Common Stocks (Continued)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial Services (Continued)
- -----------------------------------------------------------------------------------------------------------------------------
CORT Business Services Corp. (2) 93,800
$ 1,547,700
- -----------------------------------------------------------------------------------------------------------------------------
Danka Business System PLC, Sponsored ADR 70,000
2,590,000
- -----------------------------------------------------------------------------------------------------------------------------
DST Systems, Inc. (2) 83,500
2,379,750
- -----------------------------------------------------------------------------------------------------------------------------
Kent Electronics Corp. 33,300
1,943,888
- -----------------------------------------------------------------------------------------------------------------------------
META Group, Inc. (2) 40,000
1,225,000
- -----------------------------------------------------------------------------------------------------------------------------
PMT Services, Inc. (2) 58,000
1,754,500
- -----------------------------------------------------------------------------------------------------------------------------
Sitel Corp. (2) 59,300
1,816,063
- -----------------------------------------------------------------------------------------------------------------------------
Stewart Enterprises, Inc. 50,000
1,850,000
- -----------------------------------------------------------------------------------------------------------------------------
Transaction Network Services, Inc. (2) 60,000
1,500,000
- -----------------------------------------------------------------------------------------------------------------------------
Transaction Systems Architects, Inc., Cl. A (2) 60,000
2,025,000
- -----------------------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc. (2) 30,000
1,117,500
- -----------------------------------------------------------------------------------------------------------------------------
USA Waste Services, Inc. (2) 151,300
2,855,788
- ----------------
27,055,651
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Manufacturing - 1.0%
- -----------------------------------------------------------------------------------------------------------------------------
American Standard Cos., Inc. (2) 50,000
1,400,000
- -----------------------------------------------------------------------------------------------------------------------------
Cincinnati Milacron, Inc. 30,000
787,500
- -----------------------------------------------------------------------------------------------------------------------------
Harnischfeger Industries, Inc. 30,000
997,500
- ----------------
3,185,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Transportation - 0.8%
- -----------------------------------------------------------------------------------------------------------------------------
Airborne Freight Corp. 100,000
2,662,500
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Technology - 29.3%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Computer Hardware - 4.5%
- -----------------------------------------------------------------------------------------------------------------------------
Adaptec, Inc. (2) 50,300
2,062,300
- -----------------------------------------------------------------------------------------------------------------------------
Cisco Systems, Inc. (2) 55,000
4,104,375
- -----------------------------------------------------------------------------------------------------------------------------
Citrix Systems, Inc. (2) 15,500
503,750
- -----------------------------------------------------------------------------------------------------------------------------
Data Translation, Inc. 117,000
1,901,250
- -----------------------------------------------------------------------------------------------------------------------------
In Focus Systems, Inc. (2) 70,000
2,528,750
- -----------------------------------------------------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A (2) 73,400
1,339,550
- -----------------------------------------------------------------------------------------------------------------------------
Network Appliance, Inc. (2) 13,200
529,650
- -----------------------------------------------------------------------------------------------------------------------------
Sun Microsystems, Inc. (2) 40,000
1,825,000
- ----------------
14,794,625
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Computer Software - 12.4%
- -----------------------------------------------------------------------------------------------------------------------------
7th Level, Inc. (2) 40,000
560,000
- -----------------------------------------------------------------------------------------------------------------------------
Adept Technology, Inc. (2) 112,700
1,183,350
- -----------------------------------------------------------------------------------------------------------------------------
AMISYS Managed Care Systems, Inc. 18,700
355,300
- -----------------------------------------------------------------------------------------------------------------------------
Arbor Software Corp. (2) 13,500
637,875
- -----------------------------------------------------------------------------------------------------------------------------
Cheyenne Software, Inc. (2) 110,000
2,873,750
- -----------------------------------------------------------------------------------------------------------------------------
Computervision Corp. (2) 190,500
2,928,938
- -----------------------------------------------------------------------------------------------------------------------------
Computron Software, Inc. (2) 50,000
900,000
- -----------------------------------------------------------------------------------------------------------------------------
Enterprise Systems, Inc. (2) 34,100
1,040,050
- -----------------------------------------------------------------------------------------------------------------------------
First Data Corp. 58,788
3,931,448
- -----------------------------------------------------------------------------------------------------------------------------
GT Interactive Software Corp. (2) 25,000
350,000
- -----------------------------------------------------------------------------------------------------------------------------
HBO & Co. 40,000
3,065,000
- -----------------------------------------------------------------------------------------------------------------------------
IDX Systems Corp. (2) 11,200
389,200
- -----------------------------------------------------------------------------------------------------------------------------
IMNET Systems, Inc. (2) 48,000
1,152,000
- -----------------------------------------------------------------------------------------------------------------------------
Inference Corp., Cl. A (2) 25,000
475,000
- -----------------------------------------------------------------------------------------------------------------------------
Informix Corp. (2) 85,000
2,550,000
- -----------------------------------------------------------------------------------------------------------------------------
Legato Systems, Inc. (2) 40,000
1,240,000
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note
1)
Common Stocks (Continued)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Technology (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Computer Software (Continued)
- -----------------------------------------------------------------------------------------------------------------------------
Mecon, Inc. (2) 110,000
$ 1,746,250
- -----------------------------------------------------------------------------------------------------------------------------
MetaTools, Inc. (2) 15,000
390,000
- -----------------------------------------------------------------------------------------------------------------------------
NetManage, Inc. 60,000
1,395,000
- -----------------------------------------------------------------------------------------------------------------------------
Network General Corp. (2) 35,000
1,168,125
- -----------------------------------------------------------------------------------------------------------------------------
Novadigm, Inc. (2) 39,100
1,109,463
- -----------------------------------------------------------------------------------------------------------------------------
Open Environment Corp. (2) 72,500
996,875
- -----------------------------------------------------------------------------------------------------------------------------
Oracle Corp. (2) 80,000
3,390,000
- -----------------------------------------------------------------------------------------------------------------------------
Pinnacle Systems, Inc. (2) 39,800
985,050
- -----------------------------------------------------------------------------------------------------------------------------
Project Software & Development, Inc. 64,500
2,249,438
- -----------------------------------------------------------------------------------------------------------------------------
Spacetec IMC Corp. (2) 30,000
352,500
- -----------------------------------------------------------------------------------------------------------------------------
SQA, Inc. (2) 12,500
240,625
- -----------------------------------------------------------------------------------------------------------------------------
Summit Medical Systems, Inc. (2) 55,000
1,182,500
- -----------------------------------------------------------------------------------------------------------------------------
Sync Research, Inc. (2) 30,800
1,393,700
- ----------------
40,231,437
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Electronics - 0.9%
- -----------------------------------------------------------------------------------------------------------------------------
Photon Dynamics, Inc. (2) 78,500
628,000
- -----------------------------------------------------------------------------------------------------------------------------
SDL, Inc. (2) 95,000
2,280,000
- ----------------
2,908,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Telecommunications-Technology - 11.5%
- -----------------------------------------------------------------------------------------------------------------------------
ADC Telecommunications, Inc. 60,000
2,190,000
- -----------------------------------------------------------------------------------------------------------------------------
Allen Group, Inc. 60,000
1,342,500
- -----------------------------------------------------------------------------------------------------------------------------
Arch Communications Group, Inc. (2) 140,000
3,360,000
- -----------------------------------------------------------------------------------------------------------------------------
Comverse Technology, Inc. (2) 60,000
1,200,000
- -----------------------------------------------------------------------------------------------------------------------------
Davox Corp. (2) 80,000
950,000
- -----------------------------------------------------------------------------------------------------------------------------
DSC Communications Corp. (2) 75,000
2,765,625
- -----------------------------------------------------------------------------------------------------------------------------
Glenayre Technologies, Inc. 31,750
1,976,438
- -----------------------------------------------------------------------------------------------------------------------------
Inter-Tel, Inc. (2) 56,300
865,613
- -----------------------------------------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., Cl. B, ADR 90,000
1,755,000
- -----------------------------------------------------------------------------------------------------------------------------
LCI International, Inc. (2) 132,600
2,718,300
- -----------------------------------------------------------------------------------------------------------------------------
Metrocall, Inc. (2) 34,200
654,075
- -----------------------------------------------------------------------------------------------------------------------------
MobileMedia Corp., Cl. A (2) 125,000
2,781,250
- -----------------------------------------------------------------------------------------------------------------------------
Pairgain Technologies, Inc. (2) 40,000
2,190,000
- -----------------------------------------------------------------------------------------------------------------------------
Periphonics Corp. (2) 85,400
2,369,850
- -----------------------------------------------------------------------------------------------------------------------------
ProNet, Inc. (2) 100,000
2,950,000
- -----------------------------------------------------------------------------------------------------------------------------
Tellabs, Inc. 55,000
2,035,000
- -----------------------------------------------------------------------------------------------------------------------------
Teltrend, Inc. (2) 65,000
3,038,750
- -----------------------------------------------------------------------------------------------------------------------------
VTEL Corp. (2) 105,500
1,951,750
- -----------------------------------------------------------------------------------------------------------------------------
Westell Technologies, Inc., Cl. A (2) 14,000
351,750
- ----------------
37,445,901
- ----------------
Total Common Stocks (Cost $234,017,201)
296,728,391
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Units (Note
1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Rights, Warrants and Certificates - 0.0%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Jan Bell Marketing, Inc. Wts., Exp. 12/98 532
$ 266
Tapistron International, Inc. Wts., Exp. 6/97 120,000
7,500
- -----------------------------------------------------------------------------------------------------------------------------
Windmere Corp. Wts., Exp. 1/98 381
--
- ----------------
Total Rights, Warrants and Certificates (Cost $52,860)
7,766
<CAPTION> Principal
Amount
- -------------------------------------------------------------------------------------------------------------------------
- ----------
<S> <C> <C>
<C>
Repurchase Agreement - 10.9%
Repurchase agreement with First Chicago Capital Markets,
5.90%, dated 12/29/95, to be repurchased at $35,623,338
on 1/2/96, collateralized by U.S. Treasury Nts., 5.125%-8.75%,
12/31/96-11/5/04, with a value of $19,323,938, U.S. Treasury
Bonds, 6.25%-11.25%, 8/15/03-8/15/23, with a value of
$11,710,771, and U.S. Treasury Bills maturing 11/14/96,
with a value of $5,310,666 (Cost $35,600,000) $ 35,600,000
35,600,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Total Investments, at Value (Cost $272,820,061) 103.2%
335,795,407
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Liabilities in Excess of Other Assets (3.2)
(10,391,316)
-----------------
- ----------------
Net Assets 100.0% $
325,404,091
=================
================
</TABLE>
1. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $2,974,750 or 0.91% of the Fund's
net assets, at December 31, 1995.
2. Non-income producing security.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Common Stocks - 80.1%
- ---------------------------------------------------------------------------------------------------
Basic Materials - 6.3%
- ---------------------------------------------------------------------------------------------------
Chemicals - 4.5%
---------------------------------------------------------------------------------------------
FMC Corp. (1) 4,000 $ 270,500
---------------------------------------------------------------------------------------------
Georgia Gulf Corp. 19,000 584,250
---------------------------------------------------------------------------------------------
IMC Global, Inc. 16,000 654,000
---------------------------------------------------------------------------------------------
Morton International, Inc. 29,000 1,040,375
---------------------------------------------------------------------------------------------
PPG Industries, Inc. 18,000 823,500
---------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. (1) 80,600 654,875
---------------------------------------------------------------------------------------------
Terra Industries, Inc. 46,000 649,750
---------------------------------------------------------------------------------------------
Union Carbide Corp. 17,000 637,500
----------------
5,314,750
- ---------------------------------------------------------------------------------------------------
Metals - 0.3%
---------------------------------------------------------------------------------------------
Reynolds Metals Co. 7,000 396,375
- ---------------------------------------------------------------------------------------------------
Paper - 1.5%
---------------------------------------------------------------------------------------------
Boise Cascade Corp. 17,000 588,625
---------------------------------------------------------------------------------------------
Bowater, Inc. 5,000 177,500
---------------------------------------------------------------------------------------------
Federal Paper Board Co. 7,000 363,125
---------------------------------------------------------------------------------------------
Willamette Industries, Inc. 11,000 618,750
----------------
1,748,000
- ---------------------------------------------------------------------------------------------------
Consumer Cyclicals - 10.7%
---------------------------------------------------------------------------------------------
Autos & Housing - 1.4%
---------------------------------------------------------------------------------------------
Pulte Corp. 17,000 571,625
---------------------------------------------------------------------------------------------
Toll Brothers, Inc. (1) 46,000 1,058,000
----------------
1,629,625
- ---------------------------------------------------------------------------------------------------
Leisure & Entertainment - 3.3%
---------------------------------------------------------------------------------------------
Applebee's International, Inc. 18,000 409,500
---------------------------------------------------------------------------------------------
Callaway Golf Co. 25,000 565,625
---------------------------------------------------------------------------------------------
ITT Corp. (New) 5,000 265,000
---------------------------------------------------------------------------------------------
McDonald's Corp. 11,000 496,375
---------------------------------------------------------------------------------------------
Walt Disney Co. 25,000 1,475,000
---------------------------------------------------------------------------------------------
Wendy's International, Inc. 33,800 718,250
----------------
3,929,750
- ---------------------------------------------------------------------------------------------------
Media - 0.2%
---------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B (1) 3,667 173,724
- ---------------------------------------------------------------------------------------------------
Retail: General - 3.2%
---------------------------------------------------------------------------------------------
Jones Apparel Group, Inc. (1) 17,100 673,312
---------------------------------------------------------------------------------------------
May Department Stores Co. 6,000 253,500
---------------------------------------------------------------------------------------------
Nautica Enterprises, Inc. 10,200 446,250
---------------------------------------------------------------------------------------------
Tommy Hilfiger Corp. 22,500 953,437
---------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 26,000 581,750
---------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A 33,000 825,000
----------------
3,733,249
- ---------------------------------------------------------------------------------------------------
Retail: Specialty - 2.6%
---------------------------------------------------------------------------------------------
Bed Bath & Beyond, Inc. (1) 9,000 349,312
---------------------------------------------------------------------------------------------
Gap, Inc. (The) 10,000 420,000
---------------------------------------------------------------------------------------------
General Nutrition Cos., Inc. (1) 40,000 920,000
---------------------------------------------------------------------------------------------
Home Depot, Inc. 24,000 1,149,000
---------------------------------------------------------------------------------------------
OfficeMax, Inc. (1) 8,000 179,000
----------------
3,017,312
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals - 17.6%
- ---------------------------------------------------------------------------------------------------
Beverages - 1.4%
---------------------------------------------------------------------------------------------
Boston Beer Co., Inc., Cl. A (1) 6,600 $ 156,750
---------------------------------------------------------------------------------------------
Coca-Cola Co. (The) 10,000 742,500
---------------------------------------------------------------------------------------------
PepsiCo, Inc. 10,000 558,750
---------------------------------------------------------------------------------------------
Whitman Corp. 8,000 186,000
----------------
1,644,000
- ---------------------------------------------------------------------------------------------------
Food - 3.1%
---------------------------------------------------------------------------------------------
ConAgra, Inc. 4,000 165,000
---------------------------------------------------------------------------------------------
H.J. Heinz Co. 15,000 496,875
---------------------------------------------------------------------------------------------
IBP, Inc. 20,000 1,010,000
---------------------------------------------------------------------------------------------
Kroger Co. (1) 14,000 525,000
---------------------------------------------------------------------------------------------
Safeway, Inc. (1) 16,000 824,000
---------------------------------------------------------------------------------------------
Smithfield Foods, Inc. (1) 21,000 666,750
----------------
3,687,625
- ---------------------------------------------------------------------------------------------------
Healthcare/Drugs - 5.6%
---------------------------------------------------------------------------------------------
Abbott Laboratories 27,000 1,127,250
---------------------------------------------------------------------------------------------
Amgen, Inc. 8,000 475,000
---------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 6,500 558,187
---------------------------------------------------------------------------------------------
Johnson & Johnson 12,000 1,027,500
---------------------------------------------------------------------------------------------
Pfizer, Inc. 26,500 1,669,500
---------------------------------------------------------------------------------------------
Schering-Plough Corp. 16,000 876,000
---------------------------------------------------------------------------------------------
Warner-Lambert Co. 6,000 582,750
---------------------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. (1) 6,000 294,000
----------------
6,610,187
- ---------------------------------------------------------------------------------------------------
Healthcare/Supplies & Services - 4.2%
---------------------------------------------------------------------------------------------
Columbia/HCA Healthcare Corp. 12,000 609,000
---------------------------------------------------------------------------------------------
Cordis Corp. (1) 2,000 201,000
---------------------------------------------------------------------------------------------
HealthCare COMPARE Corp. (1) 20,000 870,000
---------------------------------------------------------------------------------------------
Lincare Holdings, Inc. (1) 35,000 875,000
---------------------------------------------------------------------------------------------
Medtronic, Inc. 34,000 1,899,750
---------------------------------------------------------------------------------------------
Nellcor Puritan Bennett, Inc. (1) 8,800 510,400
----------------
4,965,150
- ---------------------------------------------------------------------------------------------------
Household Goods - 0.9%
---------------------------------------------------------------------------------------------
Procter & Gamble Co. 13,000 1,079,000
- ---------------------------------------------------------------------------------------------------
Tobacco - 2.4%
---------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 16,000 1,448,000
---------------------------------------------------------------------------------------------
UST, Inc. 41,000 1,368,375
----------------
2,816,375
- ---------------------------------------------------------------------------------------------------
Energy - 1.5%
---------------------------------------------------------------------------------------------
Oil-Integrated - 1.5%
---------------------------------------------------------------------------------------------
Mobil Corp. 6,000 672,000
---------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 3,500 493,938
---------------------------------------------------------------------------------------------
USX-Marathon Group 25,000 487,500
---------------------------------------------------------------------------------------------
YPF Sociedad Anonima, Sponsored ADR 5,000 108,125
----------------
1,761,563
- --------------------------------------------------------------------------------------------------
Financial - 13.7%
---------------------------------------------------------------------------------------------
Banks - 4.3%
---------------------------------------------------------------------------------------------
Bank of Boston Corp. 23,000 1,063,750
---------------------------------------------------------------------------------------------
Chase Manhattan Corp. 6,000 363,750
----------------
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Financial (Continued)
- ---------------------------------------------------------------------------------------------------
Banks (Continued)
---------------------------------------------------------------------------------------------
Chemical Banking Corp. 9,000 $ 528,750
---------------------------------------------------------------------------------------------
First Interstate Bancorp 6,500 887,250
---------------------------------------------------------------------------------------------
Midlantic Corp. 12,000 787,500
---------------------------------------------------------------------------------------------
NationsBank Corp. 10,000 696,250
---------------------------------------------------------------------------------------------
State Street Boston Corp. 16,600 747,000
----------------
5,074,250
- ---------------------------------------------------------------------------------------------------
Diversified Financial - 7.4%
---------------------------------------------------------------------------------------------
Advanta Corp., Cl. A 15,000 573,750
---------------------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette, Inc. (1) 6,200 193,750
---------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 8,000 668,000
---------------------------------------------------------------------------------------------
Federal National Mortgage Assn. 8,000 993,000
---------------------------------------------------------------------------------------------
First USA, Inc. 25,000 1,109,375
---------------------------------------------------------------------------------------------
Green Tree Financial Corp. 56,000 1,477,000
---------------------------------------------------------------------------------------------
Money Store, Inc. (The) 23,000 359,375
---------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc. 3,000 241,875
---------------------------------------------------------------------------------------------
Price (T. Rowe) Associates 20,400 1,004,700
---------------------------------------------------------------------------------------------
Schwab (Charles) Corp. (The) 29,000 583,625
---------------------------------------------------------------------------------------------
Travelers Group, Inc. 24,000 1,509,000
----------------
8,713,450
- ---------------------------------------------------------------------------------------------------
Insurance - 2.0%
---------------------------------------------------------------------------------------------
AFLAC, Inc. 5,250 227,719
---------------------------------------------------------------------------------------------
ITT Hartford Group, Inc. 5,000 241,875
---------------------------------------------------------------------------------------------
MGIC Investment Corp. 14,100 764,925
---------------------------------------------------------------------------------------------
SunAmerica, Inc. 24,000 1,140,000
----------------
2,374,519
- ---------------------------------------------------------------------------------------------------
Industrial - 7.1%
- ---------------------------------------------------------------------------------------------------
Electrical Equipment - 2.2%
---------------------------------------------------------------------------------------------
Emerson Electric Co. 17,500 1,430,625
---------------------------------------------------------------------------------------------
General Electric Co. 13,000 936,000
---------------------------------------------------------------------------------------------
Honeywell, Inc. 2,000 97,250
---------------------------------------------------------------------------------------------
Kemet Corp. 6,000 143,250
----------------
2,607,125
- ---------------------------------------------------------------------------------------------------
Industrial Materials - 1.6%
---------------------------------------------------------------------------------------------
Ball Corp. 10,000 275,000
---------------------------------------------------------------------------------------------
Centex Corp. 14,000 486,500
---------------------------------------------------------------------------------------------
Fluor Corp. 8,000 528,000
---------------------------------------------------------------------------------------------
Rayonier, Inc. 19,400 647,475
----------------
1,936,975
- ---------------------------------------------------------------------------------------------------
Industrial Services - 1.0%
---------------------------------------------------------------------------------------------
Danka Business System PLC, Sponsored ADR 21,000 777,000
---------------------------------------------------------------------------------------------
Manpower, Inc. 12,500 351,563
----------------
1,128,563
- ---------------------------------------------------------------------------------------------------
Manufacturing - 0.8%
---------------------------------------------------------------------------------------------
ITT Industries, Inc. 5,000 120,000
---------------------------------------------------------------------------------------------
Kulicke & Soffa Industries, Inc. 20,000 465,000
---------------------------------------------------------------------------------------------
Varity Corp. (1) 9,000 334,125
----------------
919,125
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Transportation - 1.5%
---------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 7,000 $ 546,000
---------------------------------------------------------------------------------------------
Canadian Pacific Ltd. 47,000 851,875
---------------------------------------------------------------------------------------------
Illinois Central Corp. 10,000 383,750
----------------
1,781,625
- ---------------------------------------------------------------------------------------------------
Technology - 22.1%
- ---------------------------------------------------------------------------------------------------
Aerospace/Defense - 0.7%
---------------------------------------------------------------------------------------------
Goodrich (B.F.) Co. 12,000 817,500
- ---------------------------------------------------------------------------------------------------
Computer Hardware - 5.3%
---------------------------------------------------------------------------------------------
3Com Corp. (1) 10,000 466,250
---------------------------------------------------------------------------------------------
Adaptec, Inc. (1) 20,000 820,000
---------------------------------------------------------------------------------------------
Cabletron Systems, Inc. (1) 22,000 1,782,000
---------------------------------------------------------------------------------------------
Cisco Systems, Inc. (1) 7,000 522,375
---------------------------------------------------------------------------------------------
Compaq Computer Corp. (1) 22,000 1,056,000
---------------------------------------------------------------------------------------------
EMC Corp. (1) 36,000 553,500
---------------------------------------------------------------------------------------------
Gateway 2000, Inc. (1) 22,000 539,000
---------------------------------------------------------------------------------------------
Sun Microsystems, Inc. (1) 12,000 547,500
----------------
6,286,625
- ---------------------------------------------------------------------------------------------------
Computer Software - 9.6%
---------------------------------------------------------------------------------------------
Automatic Data Processing, Inc. 19,000 1,410,750
---------------------------------------------------------------------------------------------
BMC Software, Inc. (1) 30,000 1,282,500
---------------------------------------------------------------------------------------------
Cheyenne Software, Inc. (1) 41,000 1,071,125
---------------------------------------------------------------------------------------------
Computer Associates International, Inc. 6,000 341,250
---------------------------------------------------------------------------------------------
First Data Corp. 20,000 1,337,500
---------------------------------------------------------------------------------------------
Informix Corp. (1) 35,000 1,050,000
---------------------------------------------------------------------------------------------
Microsoft Corp. (1) 30,000 2,632,500
---------------------------------------------------------------------------------------------
Oracle Corp. (1) 33,600 1,423,800
---------------------------------------------------------------------------------------------
Sterling Software, Inc. (1) 12,000 748,500
----------------
11,297,925
- ---------------------------------------------------------------------------------------------------
Electronics - 3.8%
---------------------------------------------------------------------------------------------
Arrow Electronics, Inc. (1) 11,000 474,375
---------------------------------------------------------------------------------------------
Cypress Semiconductor Corp. (1) 50,000 637,500
---------------------------------------------------------------------------------------------
General Instrument Corp. (1) 15,000 350,625
---------------------------------------------------------------------------------------------
Intel Corp. 26,000 1,475,500
---------------------------------------------------------------------------------------------
Motorola, Inc. 15,000 855,000
---------------------------------------------------------------------------------------------
Phillips Electronics NV, ADR 19,000 681,625
----------------
4,474,625
- ---------------------------------------------------------------------------------------------------
Telecommunications-Technology - 2.7%
---------------------------------------------------------------------------------------------
AT&T Corp. 18,000 1,165,500
---------------------------------------------------------------------------------------------
Hong Kong Telecommunications Ltd., Sponsored ADR 5,000 88,750
---------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., Cl. B, ADR 33,000 643,500
---------------------------------------------------------------------------------------------
Telecom Corp. of New Zealand Ltd., Sponsored ADR 7,000 485,625
---------------------------------------------------------------------------------------------
Tellabs, Inc. 21,800 806,600
----------------
3,189,975
- ---------------------------------------------------------------------------------------------------
Utilities - 1.1%
- ---------------------------------------------------------------------------------------------------
Telephone Utilities - 1.1%
---------------------------------------------------------------------------------------------
BellSouth Corp. 5,000 217,500
---------------------------------------------------------------------------------------------
Cincinnati Bell, Inc. 17,000 590,750
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Utilities - 1.1%
- ---------------------------------------------------------------------------------------------------
Telephone Utilities - 1.1%
---------------------------------------------------------------------------------------------
Telefonos de Mexico SA, Sponsored ADR 13,500 $ 430,313
----------------
1,238,563
----------------
Total Common Stocks (Cost $70,729,607) 94,347,530
Principal
Amount
- ---------------------------------------------------------------------------------------------------
Repurchase Agreements - 19.9%
---------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.90%, dated 12/29/95, to be repurchased at
$18,011,800 on 1/2/96, collateralized by
U.S. Treasury Nts., 5.125%-8.75%, 12/31/96-11/5/04,
with a value of $9,770,530, U.S. Treasury Bonds,
6.25%-11.25%, 8/15/03-8/15/23, with a
value of $5,921,176, and U.S. Treasury
Bills maturing 11/14/96, with a
value of $2,685,168 $18,000,000 18,000,000
---------------------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 5.90%, dated
12/29/95, to be repurchased at $5,473,586 on 1/2/96,
collateralized by U.S. Treasury Nts., 6.875%, 8/31/99,
with a value of $1,954,613, and U.S. Treasury
Bonds, 7.125%-7.625%, 11/15/22-2/15/23, with
a value of $3,682,864 5,470,000 5,470,000
----------------
---------------------------------------------------------------------------------------------
Total Repurchase Agreements (Cost $23,470,000) 23,470,000
---------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $94,199,607) 100.0% 117,817,530
---------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets 0.0 (107,640)
----------- -----------------
Net Assets 100.0% $117,709,890
===========
==================
</TABLE>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Principal
Market Value
Amount(1)
(Note 1)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Mortgage-Backed Obligations - 1.6%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Government Agency - 1.4%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
GNMA/Guaranteed - 1.4%
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
<C>
Government National Mortgage Assn.:
8%, 4/15/23 $ 3,633,256
$ 3,785,417
8%, 7/15/22 1,636,667
1,705,211
- -----------
5,490,628
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Private - 0.2%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Multi-Family - 0.2%
- -----------------------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25
757,146 714,557
- ----------
Total Mortgage-Backed Obligations (Cost $6,131,064)
6,205,185
- -------------------------------------------------------------------------------------------------------------------------
- ----------
U.S. Government Obligations - 10.0%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Treasury - 10.0%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
U.S. Treasury Nts.:
6.375%, 8/15/02 5,000,000
5,254,684
6.75%, 5/31/97 10,300,000
10,515,650
7.625%, 5/31/96 12,500,000
12,625,000
9.25%, 8/15/98 9,000,000
9,869,057
- -----------
Total U.S. Government Obligations (Cost $36,992,459)
38,264,391
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Foreign Government Obligations - 9.6%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Argentina (Republic of):
Bonds, Bonos de Consolidacion de Deudas, Series 1, 5.836%, 4/1/01 (2)(3)
2,345,788 1,841,852
Par Bonds, 5%, 3/31/23 (4) 3,500,000
1,997,187
Past Due Interest Bonds, Series L, 6.812%, 3/31/05 (2)
3,000,000 2,145,000
- -----------------------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon:
48.252%, 10/3/96 (5) MXP 5,615,100
537,857
51.195%, 9/12/96 (5) MXP 5,977,280
583,858
- -----------------------------------------------------------------------------------------------------------------------------
Canada (Government of) Bonds:
8.50%, 4/1/02 CAD 1,500,000
1,198,677
9.75%, 12/1/01 CAD 3,000,000
2,528,212
9.75%, 6/1/01 CAD 2,000,000
1,673,861
- -----------------------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds, 8%, 3/15/06 DKK
32,100,000 6,108,023
- -----------------------------------------------------------------------------------------------------------------------------
Eskom Loan Participation Agreements, Series 168, 11%, 6/1/08 ZAR
8,570,000 1,915,724
- -----------------------------------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, Buoni del Tesoro
Poliennali, 8.50%, 8/1/99 ITL
2,700,000,000 1,615,338
- -----------------------------------------------------------------------------------------------------------------------------
Poland (Republic of) Treasury Bills, Zero Coupon:
24.132%, 11/13/96 (5) PLZ
2,300,000 766,729
24.426%, 7/3/96 (5) PLZ 2,860,000
1,030,803
- -----------------------------------------------------------------------------------------------------------------------------
Queensland Treasury Corp. Gtd. Exch. Nts., 10.50%, 5/15/03 AUD
3,600,000 3,018,246
- -----------------------------------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 AUD
6,000,000 4,457,624
- -----------------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 13%, 7/14/00 GBP
1,590,000 3,054,934
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal
Market Value
Foreign Government Obligations (Continued)
Amount(1) (Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Venezuela (Republic of) Front-Loaded Interest Reduction
Bonds, Series B, 7%, 3/31/07 (2) $4,000,000
$ 2,230,000
- -----------
Total Foreign Government Obligations (Cost $34,609,292)
36,703,925
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Municipal Bonds and Notes - 0.1%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Port of Portland, Oregon Special Obligation Taxable
Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 (Cost $500,000)
500,000 546,886
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Non-Convertible Corporate Bonds and Notes - 15.9%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Basic Materials - 2.2%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Chemicals - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03
1,350,000 1,447,875
- -----------------------------------------------------------------------------------------------------------------------------
Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03
500,000 568,969
- -----------
2,016,844
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Metals - 0.9%
- -----------------------------------------------------------------------------------------------------------------------------
AK Steel Corp., 10.75% Gtd. Sr. Nts., 4/1/04
1,000,000 1,112,500
- -----------------------------------------------------------------------------------------------------------------------------
Armco, Inc., 8.50% Sinking Fund Debs., 9/1/01
200,000 194,000
- -----------------------------------------------------------------------------------------------------------------------------
Horsehead Industries, Inc., 14% Sub. Nts., 6/1/99 400,000
418,668
- -----------------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03
1,000,000 1,102,500
- -----------------------------------------------------------------------------------------------------------------------------
Wheel-Pittsburgh Corp., 9.375% Sr. Nts., 11/15/03
500,000 478,750
- ----------
3,306,418
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Paper - 0.8%
- -----------------------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01
500,000 517,500
- -----------------------------------------------------------------------------------------------------------------------------
Repap Wisconsin, Inc., 9.875% Second Priority Sr. Nts., 5/1/06
1,000,000 955,000
- -----------------------------------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.75% Sr. Nts., 6/15/00
1,000,000 1,068,750
- -----------------------------------------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00
350,000 376,250
- -----------
2,917,500
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Cyclicals - 6.5%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Autos & Housing - 0.6%
- -----------------------------------------------------------------------------------------------------------------------------
Chrysler Financial Corp., 13.25% Nts., 10/15/99 500,000
619,944
- -----------------------------------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 825,000
693,000
- ----------------------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec.
Nts., Series B, 4/1/02 950,000
973,750
- -----------
2,286,694
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Leisure & Entertainment - 1.0%
- -----------------------------------------------------------------------------------------------------------------------------
Foodmaker, Inc.:
9.25% Sr. Nts., 3/1/99 450,000
433,125
9.75% Sr. Sub. Nts., 6/1/02 350,000
318,500
- -----------------------------------------------------------------------------------------------------------------------------
Imax Corp., 7% Sr. Nts., 3/1/01 (4) 600,000
591,000
- -----------------------------------------------------------------------------------------------------------------------------
Pioneer Finance Corp., 13.50% Gtd. First Mtg. Bonds, 12/1/98
1,000,000 755,000
- -----------------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 1,000,000
985,000
- -----------------------------------------------------------------------------------------------------------------------------
Trump Plaza Funding, Inc., 10.875% Gtd. Mtg. Nts.,
6/15/01 500,000
520,000
- ----------
3,602,625
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal
Market Value
Non-Convertible Corporate Bonds and Notes (Continued)
Amount(1) (Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Cyclicals (Continued)
Media - 4.2%
- -----------------------------------------------------------------------------------------------------------------------------
Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02
$1,000,000 $ 980,000
- -----------------------------------------------------------------------------------------------------------------------------
American Telecasting, Inc., 0%/14.50% Sr. Dis. Nts., 6/15/04 (6)
1,290,948 893,981
- -----------------------------------------------------------------------------------------------------------------------------
Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs., Series B, 3/1/05
(6) 1,000,000 635,000
- -----------------------------------------------------------------------------------------------------------------------------
Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08
500,000 542,500
- -----------------------------------------------------------------------------------------------------------------------------
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13
1,100,000 1,171,500
- -----------------------------------------------------------------------------------------------------------------------------
Echostar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04 (6)
1,100,000 742,500
- -----------------------------------------------------------------------------------------------------------------------------
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., Series B, 11/1/03 (2)
1,000,000 965,000
- -----------------------------------------------------------------------------------------------------------------------------
International CableTel, Inc., 0%/10.875% Sr. Deferred Coupon Nts., 10/15/03
(6) 500,000 358,750
- -----------------------------------------------------------------------------------------------------------------------------
Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03
750,000 780,000
- -----------------------------------------------------------------------------------------------------------------------------
Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03
1,000,000 1,115,000
- -----------------------------------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp.:
0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (6)
1,000,000 825,000
9.75% Sr. Sec. Nts., 8/1/00
500,000 531,250
- -----------------------------------------------------------------------------------------------------------------------------
People's Choice TV Corp., 0%/13.125% Sr. Disc. Nts., 6/1/04 (6)
500,000 288,750
- -----------------------------------------------------------------------------------------------------------------------------
Rogers Cablesystems Ltd., 10% Sr. Sec. Second Priority Debs., 12/1/07
1,000,000 1,067,500
- -----------------------------------------------------------------------------------------------------------------------------
SCI Television, Inc., 11% Sr. Nts., Series 1, 6/30/05
500,000 527,500
- -----------------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10% Sr. Sub. Nts., 9/30/05
500,000 513,750
- -----------------------------------------------------------------------------------------------------------------------------
TeleWest PLC, 9.625% Sr. Debs., 10/1/06
500,000 510,625
- -----------------------------------------------------------------------------------------------------------------------------
Time Warner Entertainment LP/Time Warner, Inc.:
10.15% Sr. Nts., 5/1/12 500,000
623,816
8.375% Sr. Debs., 3/15/23
500,000 543,082
- -----------------------------------------------------------------------------------------------------------------------------
Time Warner, Inc., 9.125% Debs., 1/15/13
1,000,000 1,127,699
- -----------------------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07
1,000,000 1,176,779
- -----------------------------------------------------------------------------------------------------------------------------
United States Banknote Corp., 11.625% Sr. Nts., Series B, 8/1/02
380,000 229,900
- -----------
16,149,882
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Retail: General - 0.2%
- -----------------------------------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02
600,000 591,000
- -----------------------------------------------------------------------------------------------------------------------------
Retail: Specialty - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01
1,000,000 1,007,500
- -----------------------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03
750,000 735,000
- -----------
1,742,500
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Non-Cyclicals - 1.9%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Food - 0.6%
- -----------------------------------------------------------------------------------------------------------------------------
Di Giorgio Corp., 12% Sr. Nts., 2/15/03
250,000 191,250
- -----------------------------------------------------------------------------------------------------------------------------
Grand Union Co., 12% Sr. Nts., 9/1/04
1,103,000 959,610
- -----------------------------------------------------------------------------------------------------------------------------
Penn Traffic Co., 9.625% Sr. Sub. Nts., 4/15/05
500,000 390,000
- -----------------------------------------------------------------------------------------------------------------------------
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99
300,000 332,250
- -----------------------------------------------------------------------------------------------------------------------------
RJR Nabisco, Inc., 8.625% Medium-Term Nts., 12/1/02
500,000 519,295
- -----------
2,392,405
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal
Market Value
Non-Convertible Corporate Bonds and Notes (Continued)
Amount(1) (Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Non-Cyclicals (Continued)
Healthcare/Supplies & Services - 0.6%
- -----------------------------------------------------------------------------------------------------------------------------
AmeriSource Corp., 11.25% Sr. Debs., 7/15/05 (3) $
590,129 $ 652,093
- -----------------------------------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., 7/15/02 (7)
1,000,000 1,085,000
- -----------------------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04
500,000 548,750
- ----------
2,285,843
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Household Goods - 0.7%
- -----------------------------------------------------------------------------------------------------------------------------
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts.,
Series B, 11.404%, 5/27/98 (5) 1,500,000
1,200,000
- -----------------------------------------------------------------------------------------------------------------------------
Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02
1,000,000 1,105,000
- -----------------------------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 13.169%, 3/15/98 (5)
500,000
372,500
- ----------
2,677,500
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Energy - 0.4%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Energy Services & Producers - 0.4%
- -----------------------------------------------------------------------------------------------------------------------------
Coastal Corp., 11.75% Sr. Debs., 6/15/06
500,000 531,653
- -----------------------------------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02
1,000,000 1,137,500
- ----------
1,669,153
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Financial - 0.5%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Banks - 0.2%
- -----------------------------------------------------------------------------------------------------------------------------
First Chicago Corp.:
11.25% Sub. Nts., 2/20/01 250,000
307,832
9% Sub. Nts., 6/15/99 250,000
275,295
- ----------
583,127
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Diversified Financial - 0.3%
- -----------------------------------------------------------------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98
250,000 235,625
- -----------------------------------------------------------------------------------------------------------------------------
GPA Holland BV, 9.75% Medium-Term Nts., Series B, 6/10/96 (7)
1,000,000 1,000,000
- ----------
1,235,625
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial - 1.7%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial Materials - 0.8%
- -----------------------------------------------------------------------------------------------------------------------------
American Standard, Inc., 10.875% Sr. Nts., 5/15/99
500,000 546,250
- -----------------------------------------------------------------------------------------------------------------------------
Owens-Illinois, Inc.:
10% Sr. Sub. Nts., 8/1/02 500,000
525,625
11% Sr. Debs., 12/1/03 500,000
566,875
- -----------------------------------------------------------------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03
425,000 403,219
- -----------------------------------------------------------------------------------------------------------------------------
Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03
850,000 896,750
- ----------
2,938,719
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial Services - 0.3%
- -----------------------------------------------------------------------------------------------------------------------------
EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03
1,250,000 1,112,500
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Manufacturing - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05 (6)
1,250,000 931,250
- -----------------------------------------------------------------------------------------------------------------------------
Terex Corp., 13.75% Sr. Sec. Nts., 5/15/02 (7)
1,000,000 882,500
- ----------
1,813,750
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Transportation - 0.1%
- -----------------------------------------------------------------------------------------------------------------------------
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04
500,000 522,500
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal
Market Value
Non-Convertible Corporate Bonds and Notes (Continued)
Amount(1) (Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Technology - 1.9%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Aerospace/Defense - 0.3%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Unisys Corp., 13.50% Credit Sensitive Nts., 7/1/97 (2)
$1,250,000 $1,193,750
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Telecommunications-Technology - 1.6%
- -----------------------------------------------------------------------------------------------------------------------------
Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04 (6)
800,000 576,000
- -----------------------------------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01
500,000 493,750
- -----------------------------------------------------------------------------------------------------------------------------
Comcast Cellular Corp., Zero Coupon Nts., Series B, 7.825%, 3/5/00 (5)
1,000,000 772,500
- -----------------------------------------------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts. 10/1/00 (6)
1,200,000 1,026,000
- -----------------------------------------------------------------------------------------------------------------------------
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (6)
1,850,000 1,489,250
- -----------------------------------------------------------------------------------------------------------------------------
PriCellular Wireless Corp., 0%/14% Sr. Sub. Disc. Nts., 11/15/01 (6)
1,000,000 880,000
- -----------------------------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04
1,000,000 995,000
- ----------
6,232,500
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Utilities - 0.8%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Electric Utilities - 0.4%
- -----------------------------------------------------------------------------------------------------------------------------
First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16
1,500,000
1,547,055
- -------------------------------------------------------------------------------------------------------------------------
- -----------
Gas Utilities - 0.4%
- -----------------------------------------------------------------------------------------------------------------------------
Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17
989,000 846,386
- -----------------------------------------------------------------------------------------------------------------------------
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04 (6)
750,000 710,625
- ----------
1,557,011
- ----------
Total Non-Convertible Corporate Bonds and Notes (Cost $58,825,378)
60,374,901
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Convertible Corporate Bonds and Notes - 0.2%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
MEDIQ, Inc., 7.50% Exchangeable Sub. Debs., 7/15/03 (Cost $927,514)
1,000,000
793,750
Shares
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Common Stocks - 47.1%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Basic Materials - 3.1%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Chemicals - 1.4%
- -----------------------------------------------------------------------------------------------------------------------------
Air Products & Chemicals, Inc. 2,000
105,500
- -----------------------------------------------------------------------------------------------------------------------------
ARCO Chemical Co.
17,900 870,387
- -----------------------------------------------------------------------------------------------------------------------------
Bayer AG, Sponsored ADR
70,000 1,851,143
- -----------------------------------------------------------------------------------------------------------------------------
Dow Chemical Co. (The)
8,500 598,187
- -----------------------------------------------------------------------------------------------------------------------------
Georgia Gulf Corp. 20,400
627,300
- -----------------------------------------------------------------------------------------------------------------------------
Goldschmidt (T.H.) AG 430
151,718
- -----------------------------------------------------------------------------------------------------------------------------
IMC Global, Inc. (11) 15,200
621,300
- -----------------------------------------------------------------------------------------------------------------------------
Sybron Chemical Industries, Inc. (8)
48,000 516,000
- ----------
5,341,535
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Gold - 0.2%
- -----------------------------------------------------------------------------------------------------------------------------
Santa Fe Pacific Gold Corp. 70,000
848,750
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Basic Materials (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Metals - 0.4%
- -----------------------------------------------------------------------------------------------------------------------------
Brush Wellman, Inc. 69,300
$1,195,425
- -----------------------------------------------------------------------------------------------------------------------------
Inco Ltd. 15,200
505,400
- -----------
1,700,825
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Paper - 1.1%
- -----------------------------------------------------------------------------------------------------------------------------
Aracruz Celulose SA, Sponsored ADR, Cl. B
121,000 937,750
- -----------------------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., Cl. A (8) 7,180
57,889
- -----------------------------------------------------------------------------------------------------------------------------
Georgia-Pacific Corp. 7,700
528,412
- -----------------------------------------------------------------------------------------------------------------------------
Louisiana-Pacific Corp. (11) 31,900
773,575
- -----------------------------------------------------------------------------------------------------------------------------
MacMillan Bloedel Ltd. 76,830
950,629
- -----------------------------------------------------------------------------------------------------------------------------
MacMillan Bloedel Ltd. 4,200
50,925
- -----------------------------------------------------------------------------------------------------------------------------
Stone Container Corp. 54,000
776,250
- -----------
4,075,430
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Cyclicals - 8.8%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Autos & Housing - 1.3%
- -----------------------------------------------------------------------------------------------------------------------------
Chromcraft Revington, Inc. (8) 23,500
625,687
- -----------------------------------------------------------------------------------------------------------------------------
Eaton Corp. 14,000
750,750
- -----------------------------------------------------------------------------------------------------------------------------
Excel Industries, Inc. 52,000
728,000
- -----------------------------------------------------------------------------------------------------------------------------
Fiat SpA 310,000
1,008,321
- -----------------------------------------------------------------------------------------------------------------------------
General Motors Corp. (11) 22,500
1,189,687
- -----------------------------------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc. 26,000
666,250
- -----------------------------------------------------------------------------------------------------------------------------
Hi-Lo Automotive, Inc. (8) 21,900
112,237
- -----------
5,080,932
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Leisure & Entertainment - 3.0%
- -----------------------------------------------------------------------------------------------------------------------------
AMR Corp. (8)(11) 16,700
1,239,975
- -----------------------------------------------------------------------------------------------------------------------------
Carnival Corp., Cl. A 34,100
831,187
- -----------------------------------------------------------------------------------------------------------------------------
Cheesecake Factory (The) (8)(11) 30,000
645,000
- -----------------------------------------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc. (8) 34,000
947,750
- -----------------------------------------------------------------------------------------------------------------------------
Cracker Barrel Old Country Store, Inc. 64,000
1,104,000
- -----------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co. 18,000
1,206,000
- -----------------------------------------------------------------------------------------------------------------------------
International Game Technology 60,000
652,500
- -----------------------------------------------------------------------------------------------------------------------------
King World Productions, Inc. (8) 31,000
1,205,125
- -----------------------------------------------------------------------------------------------------------------------------
Mattel, Inc. 31,337
963,613
- -----------------------------------------------------------------------------------------------------------------------------
Primadonna Resorts, Inc. 5,000
73,750
- -----------------------------------------------------------------------------------------------------------------------------
Shaw Brothers (Hong Kong) Ltd.
127,000 139,616
- -----------------------------------------------------------------------------------------------------------------------------
Shimano, Inc. 50,000
882,196
- -----------------------------------------------------------------------------------------------------------------------------
US West Media Group (8) 33,000
627,000
- -----------------------------------------------------------------------------------------------------------------------------
Walt Disney Co. 13,000
767,000
- -----------
11,284,712
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Media - 1.7%
- -----------------------------------------------------------------------------------------------------------------------------
Bowne & Co., Inc. 46,000
920,000
- -----------------------------------------------------------------------------------------------------------------------------
Capital Cities/ABC, Inc. 10,000
1,233,750
- -----------------------------------------------------------------------------------------------------------------------------
Comcast Corp., Cl. A Special 75,000
1,364,062
- -----------------------------------------------------------------------------------------------------------------------------
Dow Jones & Co., Inc. 18,500
737,687
- -----------------------------------------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR (7)
15,500 348,750
- -----------------------------------------------------------------------------------------------------------------------------
South China Morning Post Holdings Ltd.
1,200,000 733,322
- -----------------------------------------------------------------------------------------------------------------------------
Tele-Communications, Inc. (New), TCI Group, Series A (8)
34,400 683,700
- -----------------------------------------------------------------------------------------------------------------------------
Time Warner, Inc. 14,600
552,975
- -----------
6,574,246
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Cyclicals (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Retail: General - 1.3%
- -----------------------------------------------------------------------------------------------------------------------------
Authentic Fitness Corp. 59,800
$1,240,850
- -----------------------------------------------------------------------------------------------------------------------------
Cone Mills Corp. (8) 113,100
1,272,375
- -----------------------------------------------------------------------------------------------------------------------------
Price/Costco, Inc. (8) 65,900
1,004,975
- -----------------------------------------------------------------------------------------------------------------------------
Tuesday Morning Corp. (8) 130,000
715,000
- -----------------------------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 33,700
754,037
- -----------
4,987,237
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Retail: Specialty - 1.5%
- -----------------------------------------------------------------------------------------------------------------------------
Ann Taylor Stores, Inc. (8) 46,000
471,500
- -----------------------------------------------------------------------------------------------------------------------------
Best Buy Co., Inc. (8) 30,200
490,750
- -----------------------------------------------------------------------------------------------------------------------------
Books-A-Million, Inc. 54,000
695,250
- -----------------------------------------------------------------------------------------------------------------------------
Burlington Coat Factory Warehouse Corp.
62,000 635,500
- -----------------------------------------------------------------------------------------------------------------------------
Castorama Dubois Investissements LP
4,131 677,466
- -----------------------------------------------------------------------------------------------------------------------------
Justin Industries, Inc. 85,000
935,000
- -----------------------------------------------------------------------------------------------------------------------------
Toys 'R' Us, Inc. (8) 61,400
1,335,450
- -----------------------------------------------------------------------------------------------------------------------------
Venture Stores, Inc. 98,600
332,775
- -----------
5,573,691
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Non-Cyclicals - 8.9%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Beverages - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Guinness PLC 100,000
735,932
- -----------------------------------------------------------------------------------------------------------------------------
Whitman Corp. 50,400
1,171,800
- -----------
1,907,732
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Food - 1.1%
- -----------------------------------------------------------------------------------------------------------------------------
Chiquita Brands International, Inc. 27,880
383,350
- -----------------------------------------------------------------------------------------------------------------------------
Grand Union Co. (8) 6,185
46,387
- -----------------------------------------------------------------------------------------------------------------------------
Groupe Danone 4,900
809,590
- -----------------------------------------------------------------------------------------------------------------------------
McCormick & Co., Inc., Non-Vtg.
31,000 747,875
- -----------------------------------------------------------------------------------------------------------------------------
Nestle SA, Sponsored ADR 12,000
665,363
- -----------------------------------------------------------------------------------------------------------------------------
Sara Lee Corp. (11) 50,800
1,619,250
- -----------
4,271,815
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Healthcare/Drugs - 3.6%
- -----------------------------------------------------------------------------------------------------------------------------
Abbott Laboratories 18,000
751,500
- -----------------------------------------------------------------------------------------------------------------------------
Agouron Pharmaceuticals, Inc. (8) 20,000
655,000
- -----------------------------------------------------------------------------------------------------------------------------
American Home Products Corp.
10,000 970,000
- -----------------------------------------------------------------------------------------------------------------------------
Astra AB Free, Series A 15,500
619,794
- -----------------------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 25,000
2,146,875
- -----------------------------------------------------------------------------------------------------------------------------
Ciba-Geigy AG 2,700
2,381,695
- -----------------------------------------------------------------------------------------------------------------------------
COR Therapeutics, Inc. (8) 50,000
418,750
- -----------------------------------------------------------------------------------------------------------------------------
Foundation Health Corp. (8) 24,000
1,032,000
- -----------------------------------------------------------------------------------------------------------------------------
Genzyme Corp. (8)(11) 25,200
1,571,850
- -----------------------------------------------------------------------------------------------------------------------------
Johnson & Johnson 13,500
1,155,937
- -----------------------------------------------------------------------------------------------------------------------------
NBTY, Inc. (8) 217,800
1,034,550
- -----------------------------------------------------------------------------------------------------------------------------
Smithkline Beecham PLC, ADR Equity Units (one ADR represents
five equity units, each unit consists of one cl. B ordinary
share and one share of cumulative participating preferred stock) (9)
17,000 943,500
- -----------
13,681,451
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares
(Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Consumer Non-Cyclicals (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Healthcare/Supplies & Services - 2.9%
- -----------------------------------------------------------------------------------------------------------------------------
Biomet, Inc. (8) 52,100
$ 931,287
- -----------------------------------------------------------------------------------------------------------------------------
Community Psychiatric Centers 50,000
612,500
- -----------------------------------------------------------------------------------------------------------------------------
Manor Care, Inc. (11) 33,185
1,161,475
- -----------------------------------------------------------------------------------------------------------------------------
Medtronic, Inc. (11) 18,700
1,044,862
- -----------------------------------------------------------------------------------------------------------------------------
Nellcor Puritan Bennett, Inc. (8)(11) 6,600
382,800
- -----------------------------------------------------------------------------------------------------------------------------
NovaCare, Inc. (8) 14,900
76,362
- -----------------------------------------------------------------------------------------------------------------------------
Pyxis Corp. (8) 51,900
759,037
- -----------------------------------------------------------------------------------------------------------------------------
Sofamor Danek Group, Inc. (8)(11) 45,000
1,276,875
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Healthcare, Inc. (11) 49,000
2,278,500
- -----------------------------------------------------------------------------------------------------------------------------
Value Health, Inc. (8) 36,500
1,003,750
- -----------------------------------------------------------------------------------------------------------------------------
Wellpoint Health Networks, Inc., Cl. A (8) 45,700
1,468,112
- -----------
10,995,560
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Household Goods - 0.3%
- -----------------------------------------------------------------------------------------------------------------------------
Procter & Gamble Co. 12,000
996,000
- -----------------------------------------------------------------------------------------------------------------------------
Scott's Liquid Gold, Inc. 57,200
164,450
- -----------
1,160,450
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Tobacco - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. (11) 20,000
1,810,000
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Energy - 2.9%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Energy Services & Producers - 1.0%
- -----------------------------------------------------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 42,300
798,413
- -----------------------------------------------------------------------------------------------------------------------------
Kerr-McGee Corp. 12,000
762,000
- -----------------------------------------------------------------------------------------------------------------------------
Landmark Graphics Corp. (8) 53,900
1,253,175
- -----------------------------------------------------------------------------------------------------------------------------
Western Atlas, Inc. (8) 22,000
1,111,000
- -----------
3,924,588
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Oil-Integrated - 1.9%
- -----------------------------------------------------------------------------------------------------------------------------
Ashland Coal, Inc. 19,600
418,950
- -----------------------------------------------------------------------------------------------------------------------------
Ashland, Inc. 25,000
878,125
- -----------------------------------------------------------------------------------------------------------------------------
Atlantic Richfield Co. 11,900
1,317,925
- -----------------------------------------------------------------------------------------------------------------------------
Louisiana Land & Exploration Co. 23,100
990,413
- -----------------------------------------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 10,000
1,411,250
- -----------------------------------------------------------------------------------------------------------------------------
Saga Petroleum AS, Cl. A 12,000
160,498
- -----------------------------------------------------------------------------------------------------------------------------
Saga Petroleum AS, Cl. B 19,000
237,581
- -----------------------------------------------------------------------------------------------------------------------------
Total SA, Sponsored ADR 22,701
771,834
- -----------------------------------------------------------------------------------------------------------------------------
Unocal Corp. 22,000
640,750
- -----------------------------------------------------------------------------------------------------------------------------
Yukong Ltd., GDR (7)(8) 27,500
268,125
- -----------------------------------------------------------------------------------------------------------------------------
Yukong Ltd., GDR (8) 958
9,131
- -----------------------------------------------------------------------------------------------------------------------------
Yukong Ltd., GDR (8) 2,336
22,265
- -----------
7,126,847
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Financial - 5.0%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Banks - 2.1%
- -----------------------------------------------------------------------------------------------------------------------------
Banco Frances del Rio de la Plata SA 115,000
1,017,946
- -----------------------------------------------------------------------------------------------------------------------------
Chemical Banking Corp. 52,700
3,096,125
- -----------------------------------------------------------------------------------------------------------------------------
Deutsche Bank, Sponsored ADR 13,250
629,229
- -----------------------------------------------------------------------------------------------------------------------------
NationsBank Corp. 47,200
3,286,300
- -----------
8,029,600
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued)
Shares (Note 1)
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Financial (Continued)
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Diversified Financial - 1.3%
- -----------------------------------------------------------------------------------------------------------------------------
American Express Co.
35,000 $1,448,125
- -----------------------------------------------------------------------------------------------------------------------------
H & R Block, Inc. 32,400
1,312,200
- -----------------------------------------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones, SA
214,506 540,659
- -----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. (11)
9,800 499,800
- -----------------------------------------------------------------------------------------------------------------------------
Salomon, Inc. 18,400
653,200
- -----------------------------------------------------------------------------------------------------------------------------
Santa Anita Realty Enterprises, Inc., Units (each unit consists
of one share of Santa Anita Operating Co. and one share
of Santa Anita Realty Enterprises, Inc., common stock) (9)(10)
40,000 475,000
- -----------
4,928,984
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Insurance - 1.6%
- -----------------------------------------------------------------------------------------------------------------------------
Aetna Life & Casualty Co. (11)
9,000 623,250
- -----------------------------------------------------------------------------------------------------------------------------
American International Group, Inc. (11)
16,200 1,498,500
- -----------------------------------------------------------------------------------------------------------------------------
American Re Corp. (11)
48,000 1,962,000
- -----------------------------------------------------------------------------------------------------------------------------
Berkley (W.R.) Corp.
21,000 1,128,750
- -----------------------------------------------------------------------------------------------------------------------------
UNUM Corp.
13,600 748,000
- -----------
5,960,500
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial - 5.2%
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Electrical Equipment - 0.5%
- -----------------------------------------------------------------------------------------------------------------------------
Core Industries, Inc. 50,000
643,750
- -----------------------------------------------------------------------------------------------------------------------------
General Electric Co. 18,000
1,296,000
- -----------
1,939,750
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial Materials - 1.2%
- -----------------------------------------------------------------------------------------------------------------------------
Corning, Inc. 37,200
1,190,400
- -----------------------------------------------------------------------------------------------------------------------------
Insituform Technologies, Cl. A (8)
34,500 401,063
- -----------------------------------------------------------------------------------------------------------------------------
Interpool, Inc. 37,500
670,313
- -----------------------------------------------------------------------------------------------------------------------------
Owens-Corning Fiberglass Corp. (8)(11)
30,000 1,346,250
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Can Corp. (8) 65,000
877,500
- -----------------------------------------------------------------------------------------------------------------------------
Walter Industries, Inc. (8) 2,645
34,716
- -----------
4,520,242
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Industrial Services - 0.3%
- -----------------------------------------------------------------------------------------------------------------------------
Ecolab, Inc. 23,400
702,000
- -----------------------------------------------------------------------------------------------------------------------------
Huarte SA 50,150
226,534
- -----------
928,534
- -------------------------------------------------------------------------------------------------------------------------
- ----------
Manufacturing - 1.9%
- -----------------------------------------------------------------------------------------------------------------------------
Citic Pacific Ltd. 216,000
738,910
- -----------------------------------------------------------------------------------------------------------------------------
Griffon Corp. (8) 80,000
720,000
- -----------------------------------------------------------------------------------------------------------------------------
Harnischfeger Industries, Inc. (11)
21,000 698,250
- -----------------------------------------------------------------------------------------------------------------------------
Hutchison Whampoa Ltd.
128,000 779,727
- -----------------------------------------------------------------------------------------------------------------------------
Jardine Matheson Holdings Ltd.
50,468 345,706
- -----------------------------------------------------------------------------------------------------------------------------
Johnstown America Industries, Inc. (8)
20,000 100,000
- -----------------------------------------------------------------------------------------------------------------------------
Mannesmann AG
3,287 1,048,375
- -----------------------------------------------------------------------------------------------------------------------------
Pacific Dunlop Ltd. 400,000
937,273
- -----------------------------------------------------------------------------------------------------------------------------
Tenneco, Inc. 26,000
1,290,250
- -----------------------------------------------------------------------------------------------------------------------------
Westinghouse Air Brake Co.
55,000 584,375
- -----------
7,242,866
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Industrial (Continued)
Transportation - 1.3%
-------------------------------------------------------------------------------------------
Airborne Freight Corp. 41,000 $1,091,625
-------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 13,600 1,060,800
-------------------------------------------------------------------------------------------
Consolidated Freightways, Inc. (11) 51,800 1,372,700
-------------------------------------------------------------------------------------------
Stolt-Nielsen SA 44,100 1,273,388
-----------
4,798,513
- -------------------------------------------------------------------------------------------------
Technology - 11.9%
- -------------------------------------------------------------------------------------------------
Aerospace/Defense - 0.3%
-------------------------------------------------------------------------------------------
McDonnell Douglas Corp. 3,600 331,200
-------------------------------------------------------------------------------------------
Rockwell International Corp. 17,900 946,463
--------------
1,277,663
- ---------------------------------------------------------------------------------------------------
Computer Hardware - 2.7%
---------------------------------------------------------------------------------------------
Amdahl Corp. (8) 70,000 595,000
---------------------------------------------------------------------------------------------
Bay Networks, Inc. (8)(11) 18,007 740,538
---------------------------------------------------------------------------------------------
Cabletron Systems, Inc. (8)(11) 17,000 1,377,000
---------------------------------------------------------------------------------------------
EMC Corp. (8) 39,600 608,850
---------------------------------------------------------------------------------------------
International Business Machines Corp. 14,400 1,321,200
---------------------------------------------------------------------------------------------
Moore Corp. Ltd. 31,600 588,550
---------------------------------------------------------------------------------------------
Norand Corp. (8) 28,400 333,700
---------------------------------------------------------------------------------------------
Proxima Corp. (8) 50,000 1,106,250
---------------------------------------------------------------------------------------------
Seagate Technology, Inc. (8)(11) 11,700 555,750
---------------------------------------------------------------------------------------------
Storage Technology Corp. (New) (8) 33,000 787,875
---------------------------------------------------------------------------------------------
Sun Microsystems, Inc. (8)(11) 24,400 1,113,250
---------------------------------------------------------------------------------------------
Xerox Corp. (11) 8,500 1,164,500
-------------
10,292,463
- ---------------------------------------------------------------------------------------------------
Computer Software - 3.9%
---------------------------------------------------------------------------------------------
BMC Software, Inc. (8)(11) 13,000 555,750
---------------------------------------------------------------------------------------------
Computer Associates International, Inc. 28,650 1,629,469
---------------------------------------------------------------------------------------------
Davidson & Associates, Inc. 32,000 704,000
---------------------------------------------------------------------------------------------
Electronic Arts, Inc. (8)(11) 35,900 937,888
---------------------------------------------------------------------------------------------
Informix Corp. (8)(11) 32,000 960,000
---------------------------------------------------------------------------------------------
Marcam Corp. (8) 72,000 1,098,000
---------------------------------------------------------------------------------------------
Microsoft Corp. (8)(11) 5,400 473,850
---------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 32,000 2,435,249
---------------------------------------------------------------------------------------------
Novell, Inc. (8) 106,400 1,516,200
---------------------------------------------------------------------------------------------
PsiNet, Inc. (8) 23,000 526,125
---------------------------------------------------------------------------------------------
Structural Dynamics Research Corp. (8)(11) 48,000 1,410,000
---------------------------------------------------------------------------------------------
Symantec Corp. (8)(11) 107,364 2,496,213
---------------
14,742,744
- ---------------------------------------------------------------------------------------------------
Electronics - 3.5%
---------------------------------------------------------------------------------------------
Advanced Micro Devices, Inc. (11) 38,000 627,000
---------------------------------------------------------------------------------------------
CAE, Inc. 115,433 878,121
---------------------------------------------------------------------------------------------
General Motors Corp., Cl. H 23,100 1,134,788
---------------------------------------------------------------------------------------------
Hewlett-Packard Co. (11) 15,000 1,256,250
---------------------------------------------------------------------------------------------
Integrated Silicon Solution, Inc. (8) 30,600 512,072
---------------------------------------------------------------------------------------------
Intel Corp. (11) 55,400 3,143,950
---------------------------------------------------------------------------------------------
Kyocera Corp. 10,000 743,565
---------------------------------------------------------------------------------------------
Philips Electronics NV 29,000 1,049,290
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Technology (Continued)
- -------------------------------------------------------------------------------------------------
Electronics (Continued)
---------------------------------------------------------------------------------------------
Samsung Electronics, GDS (New) (7)(8) 442 $ 40,443
---------------------------------------------------------------------------------------------
Samsung Electronics, GDR (7)(8) 128 11,712
---------------------------------------------------------------------------------------------
Samsung Electronics, GDS (7)(8) 34,978 2,037,469
---------------------------------------------------------------------------------------------
Samsung Electronics Ltd., Sponsored GDR (7) 649 59,384
---------------------------------------------------------------------------------------------
Texas Instruments, Inc. 10,000 517,500
---------------------------------------------------------------------------------------------
VLSI Technology, Inc. (8)(11) 35,600 645,250
---------------------------------------------------------------------------------------------
Xilinx, Inc. (11) 18,200 555,100
---------------
13,211,894
- ---------------------------------------------------------------------------------------------------
Telecommunications-Technology - 1.5%
---------------------------------------------------------------------------------------------
Airtouch Communications, Inc. (8) 50,000 1,412,500
---------------------------------------------------------------------------------------------
AT&T Corp. 7,200 466,200
---------------------------------------------------------------------------------------------
EchoStar Communications Corp., Cl. A 6,600 120,038
---------------------------------------------------------------------------------------------
ECI Telecommunications Ltd. (11) 51,000 1,163,438
---------------------------------------------------------------------------------------------
Kinnevik Investments AB Free, Series B 24,500 767,103
---------------------------------------------------------------------------------------------
MCI Communications Corp. (11) 47,000 1,227,875
---------------------------------------------------------------------------------------------
Tellabs, Inc. 16,000 592,000
----------------
5,749,154
- ---------------------------------------------------------------------------------------------------
Utilities - 1.3%
- ---------------------------------------------------------------------------------------------------
Electric Utilities - 0.4%
---------------------------------------------------------------------------------------------
Public Service Enterprise Group, Inc. 35,000 1,071,875
---------------------------------------------------------------------------------------------
Verbund Oest Electriz 9,400 565,665
----------------
1,637,540
- ---------------------------------------------------------------------------------------------------
Gas Utilities - 0.3%
---------------------------------------------------------------------------------------------
Hong Kong & China Gas 293,760 473,014
---------------------------------------------------------------------------------------------
Southwestern Energy Co. 60,000 765,000
----------------
1,238,014
- ---------------------------------------------------------------------------------------------------
Telephone Utilities - 0.6%
---------------------------------------------------------------------------------------------
BCE, Inc. 33,000 1,138,500
---------------------------------------------------------------------------------------------
US West Communications Group 28,000 1,001,000
----------------
2,139,500
----------------
Total Common Stocks (Cost $142,464,823) 178,983,762
- ---------------------------------------------------------------------------------------------------
Preferred Stocks - 1.2%
- ---------------------------------------------------------------------------------------------------
Alumax, Inc., $4.00 Cv., Series A 8,000 1,032,000
---------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co., $4.00 Cv., Series A 24,000 1,422,000
---------------------------------------------------------------------------------------------
Delta Air Lines, Inc., $3.50 Cv. Depositary Shares, Series C 13,200 783,750
---------------------------------------------------------------------------------------------
K-III Communications Corp., Sr. Exchangeable, Series A 20,000 545,000
---------------------------------------------------------------------------------------------
Pantry Pride, Inc., $14.875 Exchangeable, Series B 8,000 828,000
----------------
Total Preferred Stocks (Cost $4,053,627) 4,610,750
Units
- ---------------------------------------------------------------------------------------------------
Rights, Warrants and Certificates - 0.0%
- ---------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99 6,000 36,000
---------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 7/96 9,232 69,240
---------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc. Wts., Exp. 11/99 (7) 1,000 25,000
</TABLE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
Rights, Warrants and Certificates (Continued)
- ---------------------------------------------------------------------------------------------------
People's Choice TV Corp. Wts., Exp. 6/00 500 $ 5,000
---------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 5/02 (7) 4,000 8,000
----------------
Total Rights, Warrants and Certificates (Cost $20,771) 143,240
Principal
Amount(1)
- ---------------------------------------------------------------------------------------------------
Repurchase Agreement - 13.7%
- ---------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.90%, dated 12/29/95, to be repurchased at $52,234,220
on 1/2/96, collateralized by U.S. Treasury Nts.,
5.125%-8.75%, 12/31/96-11/5/04, with a value of
$28,334,538, U.S. Treasury Bonds, 6.25%-11.25%,
8/15/03-8/15/23, with a value of $17,171,411, and
U.S. Treasury Bills maturing 11/14/96, with
a value of $7,786,989(Cost $52,200,000) $52,200,000 52,200,000
---------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $336,724,928) 99.4% 378,826,790
---------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.6 2,436,374
-------------- ----------------
Net Assets 100.0% $381,263,164
==============
================
</TABLE>
1. Principal amount is reported in U.S. Dollars, except for those denoted
in the following currencies:
AUD - Australian Dollar ITL - Italian Lira
CAD - Canadian Dollar MXP - Mexican Peso
DKK - Danish Krone PLZ - Polish Zloty
GBP - British Pound Sterling ZAR - Zaire Makuta
2. Represents the current interest rate for a variable rate security.
3. Interest or dividend is paid in kind.
4. Represents the current interest rate for an increasing rate security.
5. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
6. Denotes a step bond: a zero coupon bond that converts to a fixed rate
of interest at a designated future date.
7. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the
Board of Trustees. These securities amount to $5,766,383 or 1.51% of the
Fund's net assets, at December 31, 1995.
8. Non-income producing security.
9. Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units
which represent debt securities, principal amount disclosed represents
total underlying principal.
10. Identifies issues considered to be illiquid--See Note 7 of Notes to
Financial Statements.
11. A sufficient amount of liquid assets has been designated to
cover outstanding written call options, as follows:
<TABLE>
<CAPTION>
Shares Subject Expiration Exercise Premium Market
Value
To Call Date Price Received See Note 1
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
AMR Corp. 2,800 1/96 $ 80.00 $ 13,300 $
1,225
Advanced Micro Devices, Inc. 6,400 1/96 45.00 13,408
400
Aetna Life & Casualty Co. 4,400 4/96 75.00 11,143
5,500
American International Group, Inc. 2,400 2/96 80.00 18,527
46,350
American Re Corp. 9,600 7/96 45.00 17,711
16,800
BMC Software, Inc. 13,000 2/96 50.00 45,108
17,875
Bay Networks, Inc. 6,000 6/96 50.00 41,069
28,500
Cabletron Systems, Inc. 3,000 1/96 60.00 13,035
61,500
Cheesecake Factory (The) 13,000 1/96 35.00 18,297
2,438
Consolidated Freightways, Inc. 12,200 6/96 30.00 21,813
33,550
ECI Telecommunications Ltd. 10,200 2/96 22.50 21,368
22,950
Electronic Arts, Inc. 10,800 3/96 35.00 79,326 8,100
General Motors Corp 4,400 6/96 55.00 11,418
11,550
Genzyme Corp. 3,700 1/96 65.00 19,313
6,013
Harnischfeger Industries, Inc. 5,200 2/96 40.00 7,451
975
Harnischfeger Industries, Inc. 5,200 5/96 35.00 10,894
8,775
Hewlett-Packard Co. 3,000 5/96 105.00 18,659
6,375
IMC Global, Inc. 7,600 1/96 32.50 8,057
62,700
IMC Global, Inc. 7,600 4/96 37.50 16,510
38,000
Informix Corp. 4,000 2/96 35.00 14,880 4,000
Informix Corp. 4,000 2/96 40.00 9,130 1,750
Informix Corp. 8,000 2/96 27.50 25,379 34,000
Informix Corp. 3,000 5/96 35.00 6,660 9,000
Intel Corp. 11,000 4/96 75.00 18,919 8,938
Louisiana-Pacific Corp. 8,000 2/96 25.00 19,259
9,500
Louisiana-Pacific Corp. 8,000 2/96 30.00 5,840
3,500
MCI Communications Corp. 10,000 4/96 30.00 12,200
5,000
Manor Care, Inc. 8,200 1/96 35.00 9,061 7,688
Medtronic, Inc. 5,000 2/96 60.00 19,849 4,375
Medtronic, Inc. 4,000 5/96 65.00 10,528 6,500
Merrill Lynch & Co., Inc. 5,500 1/96 55.00 20,459
2,063
Microsoft Corp. 1,800 1/96 105.00 17,945 113
Microsoft Corp. 1,800 1/96 115.00 9,396 113
Nellcor Puritan Bennett, Inc. 6,600 4/96 60.00 13,002
22,275
Owens-Corning Fiberglass Corp. 6,000 3/96 45.00 10,320
13,875
Philip Morris Cos., Inc. 4,000 3/96 95.00 10,130
8,000
Sara Lee Corp. 10,000 7/96 35.00 13,449 8,750
Seagate Technology, Inc. 6,000 6/96 55.00 33,569
20,250
Sofamor Danek Group, Inc. 18,000 6/96 30.00 53,458
67,500
Structural Dynamics Research Corp. 2,400 2/96 25.00 7,128
10,800
Structural Dynamics Research Corp. 7,200 5/96 30.00 15,083
24,300
Sun Microsystems, Inc. 7,600 1/96 25.00 19,140
162,450
Sun Microsystems, Inc. 6,000 4/96 35.00 18,659
78,000
Sun Microsystems, Inc. 7,000 7/96 47.50 56,331
61,250
Symantec Corp. 10,200 1/96 30.00 30,293
638
Symantec Corp. 10,200 1/96 35.00 18,818
1,913
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Shares Subject Expiration Exercise Premium Market
Value
To Call Date Price Received See Note 1
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
U.S. Healthcare, Inc. 9,800 4/96 $ 47.50 $ 31,555 $
28,175
VLSI Technology, Inc. 6,400 4/96 25.00 15,807
7,600
VLSI Technology, Inc. 21,600 4/96 40.00 99,249
4,050
Xilinx, Inc. 3,400 6/96 35.00 19,872 15,725
Xilinx, Inc. 3,400 6/96 30.00 14,348 22,525
Xerox Corp. 1,700 7/96 150.00 13,972 9,133
---------- ----------
$1,100,095 $1,043,325
===========
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Common Stocks - 95.7%
- -------------------------------------------------------------------------------------------------
Basic Materials - 1.4%
- -------------------------------------------------------------------------------------------------
Chemicals - 0.4%
Minerals Technologies, Inc. 40,000 $1,460,000
-------------------------------------------------------------------------------------------
Gold - 0.4%
-------------------------------------------------------------------------------------------
Newmont Mining Corp. 33,000 1,493,250
- -------------------------------------------------------------------------------------------------
Metals - 0.3%
-------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B 37,000 1,040,625
- -------------------------------------------------------------------------------------------------
Paper - 0.3%
-------------------------------------------------------------------------------------------
Aracruz Celulose SA, Sponsored ADR, Cl. B 125,000 968,750
- -------------------------------------------------------------------------------------------------
Consumer Cyclicals - 8.7%
- -------------------------------------------------------------------------------------------------
Autos & Housing - 2.7%
-------------------------------------------------------------------------------------------
Ciadea SA 199,998 1,040,195
-------------------------------------------------------------------------------------------
General Motors Corp. 19,000 1,004,625
-------------------------------------------------------------------------------------------
Mahindra & Mahindra Ltd., GDR (1)(2) 200,000 1,183,020
-------------------------------------------------------------------------------------------
Mitsubishi Motors Corp. 400,000 3,261,217
-------------------------------------------------------------------------------------------
Volkswagen AG 10,000 3,360,635
-------------
9,849,692
- -------------------------------------------------------------------------------------------------
Leisure & Entertainment - 0.6%
- -------------------------------------------------------------------------------------------------
Filmes Lusomundo SA 205,200 2,197,808
- -------------------------------------------------------------------------------------------------
Media - 1.4%
-------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR (2) 10,900 245,250
-------------------------------------------------------------------------------------------
News Corp. Ltd., ADR 150,000 3,206,250
-------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A (1) 97,000 1,430,750
-------------
4,882,250
- -------------------------------------------------------------------------------------------------
Retail: General - 1.7%
-------------------------------------------------------------------------------------------
Ito-Yokado Co., Ltd. 55,000 3,391,123
-------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 120,000 2,685,000
-------------
6,076,123
- -------------------------------------------------------------------------------------------------
Retail: Specialty - 2.3%
-------------------------------------------------------------------------------------------
FamilyMart Co. 45,000 2,032,929
-------------------------------------------------------------------------------------------
Giordano International Ltd. 1,700,000 1,451,125
-------------------------------------------------------------------------------------------
Jurong Shipyard Ltd. 140,000 1,078,852
-------------------------------------------------------------------------------------------
Jusco Co. 85,000 2,216,639
-------------------------------------------------------------------------------------------
Moebel Walther AG, Preference 7,312 240,110
-------------------------------------------------------------------------------------------
Prodega AG 960 1,209,750
-------------
8,229,405
- -------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals - 20.9%
- -------------------------------------------------------------------------------------------------
Beverages - 2.7%
-------------------------------------------------------------------------------------------
Allied Domecq PLC 274,400 2,236,675
-------------------------------------------------------------------------------------------
Cadbury Schweppes PLC 400,000 3,300,827
-------------------------------------------------------------------------------------------
Hellenic Bottling Co., SA 28,300 927,095
-------------------------------------------------------------------------------------------
LVMH Moet Hennessy Louis Vuitton 15,000 3,128,593
-------------
9,593,190
- -------------------------------------------------------------------------------------------------
Food - 3.7%
-------------------------------------------------------------------------------------------
Groupe Danone 20,000 3,304,449
-------------------------------------------------------------------------------------------
Molinos Rio de la Plata SA, Cl. B 301,343 2,471,490
-------------------------------------------------------------------------------------------
Nestle SA 4,000 4,435,750
-------------------------------------------------------------------------------------------
PT Indofood Sukses Makmur (1) 417,750 2,009,795
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals (Continued)
- -------------------------------------------------------------------------------------------------
Food (Continued)
-------------------------------------------------------------------------------------------
Universal Robina Corp. 2,500,000 $ 1,239,079
-----------------
13,460,563
- -------------------------------------------------------------------------------------------------
Healthcare/Drugs - 9.0%
-------------------------------------------------------------------------------------------
Amgen, Inc. 40,000 2,375,000
-------------------------------------------------------------------------------------------
Astra AB Free, Series A 100,000 3,998,669
-------------------------------------------------------------------------------------------
Ciba-Geigy AG 10,000 8,821,093
-------------------------------------------------------------------------------------------
Genzyme Corp. (1) 60,000 3,742,500
-------------------------------------------------------------------------------------------
Johnson & Johnson 11,500 984,687
-------------------------------------------------------------------------------------------
Pharmavit GDS (5) 114,000 1,368,000
-------------------------------------------------------------------------------------------
Plant Genetics Systems (1)(3) 89,104 1,061,140
-------------------------------------------------------------------------------------------
Sankyo Co. Ltd. 140,000 3,148,761
-------------------------------------------------------------------------------------------
Sanofi SA 77,998 5,006,479
-------------------------------------------------------------------------------------------
Taisho Pharmaceutical Co. 100,000 1,977,670
-----------------
32,483,999
- -------------------------------------------------------------------------------------------------
Healthcare/Supplies & Services - 3.6%
-------------------------------------------------------------------------------------------
Olympus Optical Co., Ltd. 200,000 1,938,892
-------------------------------------------------------------------------------------------
Pharmacia & Upjohn, Inc. (1) 25,500 988,125
-------------------------------------------------------------------------------------------
Rhoen Klinikum AG, Non-vtg. Preference 7,920 691,690
-------------------------------------------------------------------------------------------
Stryker Corp. 19,000 997,500
-------------------------------------------------------------------------------------------
U.S. Healthcare, Inc. 60,000 2,790,000
-------------------------------------------------------------------------------------------
United Healthcare Corp. 65,000 4,257,500
-------------------------------------------------------------------------------------------
United States Surgical Corp. 60,000 1,282,500
-----------------
12,946,207
- -------------------------------------------------------------------------------------------------
Household Goods - 0.9%
-------------------------------------------------------------------------------------------
Kao Corp. 250,000 3,102,228
- -------------------------------------------------------------------------------------------------
Tobacco - 1.0%
-------------------------------------------------------------------------------------------
B.A.T. Industries PLC 400,000 3,524,401
- -------------------------------------------------------------------------------------------------
Energy - 3.3%
- -------------------------------------------------------------------------------------------------
Energy Services & Producers - 3.0%
-------------------------------------------------------------------------------------------
Baker Hughes, Inc. 80,000 1,950,000
-------------------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 105,000 1,981,875
-------------------------------------------------------------------------------------------
Compagnie Generale de Geophysique SA (1) 24,060 792,098
-------------------------------------------------------------------------------------------
Global Marine, Inc. (1) 117,500 1,028,125
-------------------------------------------------------------------------------------------
Transocean AS (1) 292,360 5,067,135
-----------------
10,819,233
- -------------------------------------------------------------------------------------------------
Oil-Integrated - 0.3%
-------------------------------------------------------------------------------------------
Unocal Corp. 34,000 990,250
- -------------------------------------------------------------------------------------------------
Financial - 17.4%
- -------------------------------------------------------------------------------------------------
Banks - 4.9%
-------------------------------------------------------------------------------------------
Banco Bradesco SA, Preference 150,000,000 1,311,839
-------------------------------------------------------------------------------------------
Banco de Galicia Y Buenos Aires, ADR 71,000 1,464,375
-------------------------------------------------------------------------------------------
Banco Frances del Rio de la Plata SA, ADR 55,000 1,478,125
-------------------------------------------------------------------------------------------
Banco Wiese, Sponsored ADR 60 375
-------------------------------------------------------------------------------------------
Chase Manhattan Corp. 50,000 3,031,250
-------------------------------------------------------------------------------------------
Citicorp 45,000 3,026,250
-------------------------------------------------------------------------------------------
HSBC Holdings PLC 126,101 1,908,166
-------------------------------------------------------------------------------------------
Northern Trust Corp. 18,700 1,047,200
-------------------------------------------------------------------------------------------
Skandinaviska Enskilda Banken Group 250,000 2,074,781
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Financial (Continued)
- -------------------------------------------------------------------------------------------------
Banks (Continued)
-------------------------------------------------------------------------------------------
Turkiye Garanti Bankasi AS (New) (2) 288,000 $ 2,411,885
-----------------
17,754,246
- -------------------------------------------------------------------------------------------------
Diversified Financial - 5.1%
-------------------------------------------------------------------------------------------
ABN Amro Holding NV 70,000 3,192,162
-------------------------------------------------------------------------------------------
American Express Co. 24,500 1,013,687
-------------------------------------------------------------------------------------------
First NIS Regional Fund (2)(4) 180,000 1,080,000
-------------------------------------------------------------------------------------------
Internationale Nederlanden Groep NV 35,000 2,340,627
-------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones, SA 1,028,807 2,593,094
-------------------------------------------------------------------------------------------
MBNA Corp. 50,000 1,843,750
-------------------------------------------------------------------------------------------
Nomura Securities Co. Ltd. 300,000 6,543,762
-----------------
18,607,082
- -------------------------------------------------------------------------------------------------
Insurance - 7.4%
-------------------------------------------------------------------------------------------
American International Group, Inc. 35,000 3,237,500
-------------------------------------------------------------------------------------------
Mapfre Vida Seguros 25,000 1,483,727
-------------------------------------------------------------------------------------------
Marschollek, Lautenschlaeger und Partner AG 5,587 3,864,472
-------------------------------------------------------------------------------------------
National Mutual Asia Ltd. 2,634,000 2,384,656
-------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 4,500,200 9,975,702
-------------------------------------------------------------------------------------------
Skandia Forsakrings AB 100,000 2,708,532
-------------------------------------------------------------------------------------------
Swiss Reinsurance 2,500 2,915,741
-----------------
26,570,330
- -------------------------------------------------------------------------------------------------
Industrial - 17.8%
- -------------------------------------------------------------------------------------------------
Electrical Equipment - 2.9%
-------------------------------------------------------------------------------------------
Murata Mfg. Co. Ltd. 140,000 5,157,454
-------------------------------------------------------------------------------------------
Ushio, Inc. 100,000 1,192,419
-------------------------------------------------------------------------------------------
Yokogawa Electric Corp. 425,000 4,021,263
-----------------
10,371,136
- -------------------------------------------------------------------------------------------------
Industrial Services - 6.5%
-------------------------------------------------------------------------------------------
BIS SA (1) 81,025 6,014,276
-------------------------------------------------------------------------------------------
IHC Caland NV 80,000 2,694,965
-------------------------------------------------------------------------------------------
JGC Corp. 300,000 3,170,089
-------------------------------------------------------------------------------------------
Plettac AG 10,000 2,480,303
-------------------------------------------------------------------------------------------
VBH-Vereinigter Baubeschlag Handel AG 24,700 6,902,927
-------------------------------------------------------------------------------------------
WMX Technologies, Inc. 80,000 2,390,000
-------------
23,652,560
- -------------------------------------------------------------------------------------------------
Manufacturing - 7.5%
-------------------------------------------------------------------------------------------
Bobst Bearers AG 2,000 3,128,664
-------------------------------------------------------------------------------------------
Gildemeister AG (1) 13,862 1,259,057
-------------------------------------------------------------------------------------------
Measurex Corp. 63,800 1,802,350
-------------------------------------------------------------------------------------------
Mitsubishi Heavy Industries Ltd. 250,000 1,994,635
-------------------------------------------------------------------------------------------
Mori Seiki Co. Ltd. 160,000 3,614,095
-------------------------------------------------------------------------------------------
Powerscreen International PLC 1,330,100 8,002,313
-------------------------------------------------------------------------------------------
Traub AG (1) 33,750 3,065,444
-------------------------------------------------------------------------------------------
Valmet Corp., Cl. A 170,000 4,267,612
-----------------
27,134,170
- -------------------------------------------------------------------------------------------------
Transportation - 0.9%
-------------------------------------------------------------------------------------------
Brambles Industries Ltd. 180,000 2,008,441
-------------------------------------------------------------------------------------------
Lisnave-Estaleiros Navais de Lisbona SA (1) 450,950 1,267,856
-----------------
3,276,297
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Technology - 20.3%
- -------------------------------------------------------------------------------------------------
Computer Hardware - 4.4%
-------------------------------------------------------------------------------------------
Cabletron Systems, Inc. (1) 45,000 $ 3,645,000
-------------------------------------------------------------------------------------------
Digital Equipment Corp. (1) 60,000 3,847,500
-------------------------------------------------------------------------------------------
International Business Machines Corp. 35,000 3,211,250
-------------------------------------------------------------------------------------------
Olivetti & C. SpA (1) 5,000,000 4,012,231
-------------------------------------------------------------------------------------------
QUALCOMM, Inc. (1) 25,000 1,075,000
----------------
15,790,981
- -------------------------------------------------------------------------------------------------
Computer Software - 5.5%
-------------------------------------------------------------------------------------------
Baan Co. NV (1) 30,000 1,357,500
-------------------------------------------------------------------------------------------
CSK Corp. 50,000 1,565,656
-------------------------------------------------------------------------------------------
First Data Corp. 87,118 5,826,016
-------------------------------------------------------------------------------------------
Ines Corp. (1) 60,000 1,099,352
-------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 110,000 8,371,167
-------------------------------------------------------------------------------------------
Novell, Inc. (1) 119,800 1,707,150
----------------
19,926,841
- -------------------------------------------------------------------------------------------------
Electronics - 6.5%
-------------------------------------------------------------------------------------------
General Motors Corp., Cl. H 40,000 1,965,000
-------------------------------------------------------------------------------------------
Intel Corp. 20,000 1,135,000
-------------------------------------------------------------------------------------------
Keyence Corp. 25,000 2,884,102
-------------------------------------------------------------------------------------------
Matsushita Electric Industrial Co. Ltd. (1) 180,000 2,931,605
-------------------------------------------------------------------------------------------
National Semiconductor Corp. (1) 150,000 3,337,500
-------------------------------------------------------------------------------------------
Philips Electronics NV 100,000 3,618,241
-------------------------------------------------------------------------------------------
Rohm Co. 45,000 2,543,342
-------------------------------------------------------------------------------------------
SGS-Thomson Microelectronics NV (1) 129,400 5,208,350
----------------
23,623,140
- -------------------------------------------------------------------------------------------------
Telecommunications-Technology - 3.9%
-------------------------------------------------------------------------------------------
Airtouch Communications, Inc. (1) 70,000 1,977,500
-------------------------------------------------------------------------------------------
Hong Kong Telecommunications Ltd. 1,176,400 2,099,645
-------------------------------------------------------------------------------------------
Korea Mobile Telecommunications Corp. 3,000 3,380,740
-------------------------------------------------------------------------------------------
Millicom International Cellular SA (1) 121,678 3,711,179
-------------------------------------------------------------------------------------------
Millicom, Inc. (1) 25,000 --
-------------------------------------------------------------------------------------------
Petersburg Long Distance, Inc. (1) 187,000 888,250
-------------------------------------------------------------------------------------------
Technology Resources Industries Berhad (1) 650,000 1,920,121
-----------------
13,977,435
- -------------------------------------------------------------------------------------------------
Utilities - 5.9%
- -------------------------------------------------------------------------------------------------
Electric Utilities - 0.5%
-------------------------------------------------------------------------------------------
Korea Electric Power Co. 50,000 1,985,240
- -------------------------------------------------------------------------------------------------
Gas Utilities - 1.3%
-------------------------------------------------------------------------------------------
Hong Kong & China Gas 2,000,000 3,220,410
-------------------------------------------------------------------------------------------
Transportadora de Gas del Sur SA 99,300 1,278,488
-----------------
4,498,898
- -------------------------------------------------------------------------------------------------
Telephone Utilities - 4.1%
-------------------------------------------------------------------------------------------
Compania de Telefonos de Chile SA 27,500 2,279,063
-------------------------------------------------------------------------------------------
Tele Danmark AS, B Shares 30,000 1,640,261
-------------------------------------------------------------------------------------------
Telecom Italia Mobile SpA (1) 669,600 1,179,736
-------------------------------------------------------------------------------------------
Telecom Italia SpA 1,446,000 2,251,401
-------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, Preference 5,800,000 279,283
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares See Note 1
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Utilities (Continued)
- -------------------------------------------------------------------------------------------------
Telephone Utilities (Continued)
-------------------------------------------------------------------------------------------
Telefonica del Peru SA, Cl. B 3,400,031 $ 7,291,810
-----------------
14,921,554
-----------------
Total Common Stocks (Cost $321,681,583) 345,207,884
Units
- -------------------------------------------------------------------------------------------------
Rights, Warrants and Certificates - 0.0%
- -------------------------------------------------------------------------------------------------
American Satellite Network, Inc. Wts., Exp. 6/99 6,250 --
-------------------------------------------------------------------------------------------
Banco Bradesco SA Rts., Exp. 1/96 3,507,301 --
-------------------------------------------------------------------------------------------
Plant Genetics, Inc. Wts., Exp. 12/99 (3) 60,000 119,402
-----------------
Total Rights, Warrants and Certificates (Cost $0) 119,402
Principal
Amount(1)
- -------------------------------------------------------------------------------------------------
Repurchase Agreement - 4.8%
- -------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.90%, dated 12/29/95, to be repurchased at $17,311,341
on 1/2/96, collateralized by U.S. Treasury Nts., 5.125%-8.75%,
12/31/96-11/5/04, with a value of $9,390,565, U.S. Treasury Bonds,
6.25%-11.25%, 8/15/03-8/15/23, with a value of $5,690,908,
and U.S. Treasury Bills maturing 11/14/96, with a value
of $2,580,745 (Cost $17,300,000) $ 17,300,000 17,300,000
-------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $338,981,583) 100.5% 362,627,286
-------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.5) (1,648,453)
------- ------------
Net Assets 100.0% $360,978,833
=======
============
</TABLE>
1. Non-income producing security.
2. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $4,920,155 or 1.36% of the Fund's
net assets, at December 31, 1995.
3. Identifies issues considered to be illiquid - See Note 7 of Notes to
Financial Statements.
4. First NIS Regional Fund, a closed end fund listed on the
Luxembourg Stock Exchange, is offered in installments. The Fund has
entered the first and second installments (70% of the total commitment).
The third installment is provisional and may be postponed indefinitely at
the discretion of the Board of NIS Fund.
5. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended December 31,
1995. The aggregate fair value of all securities of affiliated companies
as of December 31, 1995 amounted to $1,368,000. Transactions during the
period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
Balance Balance
December 31, 1994 Gross Additions Gross Reductions December 31,
1995
------------------------------------- --------------------------------------- Dividend
Shares Cost Shares Cost Shares Cost Shares Cost
Income
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
<C>
Forsheda Group AB,
Series B 100,000 $1,200,236 -- $ -- 100,000 $1,200,236 -- $
- -- $ 46,900
Pharmavit GDS 100,000 1,300,000 24,000 216,000 10,000 115,000 114,000
1,401,000 15,263
---------- ------- ---------- ------------ --------
$2,500,236 $216,000 $1,315,236 $ 1,401,000
$ 62,163
========== ========
==========
=========== ========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Certificates of Deposit - 3.8%
Canadian Imperial Bank CD, Zero Coupon,
28.674%, 2/8/96 (2)(3) HUF $ 33,025,000 $ 235,034
----------------------------------------------------------------------------------------
Citibank CD:
13%, 5/6/96 (2) CLP 74,934,666 184,279
27.40%, 3/22/96 (2) HUF 34,877,500 255,278
----------------------------------------------------------------------------------------
CS First Boston, Inc. CD, 15.75%, 6/11/96 (2)(4) IDR 667,200,000 291,809
----------------------------------------------------------------------------------------
Indonesia (Republic of) Bank Negara CD, Zero
Coupon, 15.914%, 6/17/96 (2)(3) IDR 500,000,000 201,253
----------------------------------------------------------------------------------------
Krungthai Thanakit CD, Zero Coupon:
11.533%, 2/29/96 (2)(3) THB 6,500,000 251,931
11.668%, 2/29/96 (2)(3) THB 3,500,000 135,655
11.292%, 3/13/96 (2)(3) THB 19,000,000 736,565
------------
Total Certificates of Deposit (Cost $2,323,164) 2,291,804
- ----------------------------------------------------------------------------------------------
Mortgage-Backed Obligations - 5.8%
- ----------------------------------------------------------------------------------------------
Government Agency - 3.9%
- ----------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored - 2.6%
----------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Series 176, Cl. F,
8.95%, 3/15/20 40,342 40,720
----------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
7.50%, 8/1/25 1,175,762 1,204,780
Collateralized Mtg. Obligations, Series 1992-103,
Cl. JB, 10/50%, 11/25/20 130,000 154,821
Series 1994-83, Cl. Z, 7.50%, 6/25/24 178,988 175,296
------------
1,575,617
- ----------------------------------------------------------------------------------------------
GNMA/Guaranteed - 1.3%
----------------------------------------------------------------------------------------
Government National Mortgage Assn., 6%, 11/20/25 747,956 755,436
- ----------------------------------------------------------------------------------------------
Private - 1.9%
- ----------------------------------------------------------------------------------------------
Commercial - 1.5%
----------------------------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass-
Through Certificates, Series 1994-C1, Cl. 2-G, 8.70%,
9/25/25 (4) 153,594 160,170
----------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc., Mtg.
Pass-Through Certificates, Series 1995-C2,
Cl. D, 8.06%, 6/15/21 (5) 496,835 509,644
----------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1991-M6, Cl. B4, 7.477%, 6/25/21 (5) 37,880 37,869
Series 1992-CHF, Cl. D, 8.25%, 12/25/20 126,259 130,383
Series 1993-C1, Cl. D, 9.45%, 5/25/24 91,000 96,773
------------
934,839
- ----------------------------------------------------------------------------------------------
Multi-Family - 0.4%
----------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 236,608 223,299
------------
Total Mortgage-Backed Obligations (Cost $3,324,532) 3,489,191
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
U.S. Government Obligations - 29.0%
- ----------------------------------------------------------------------------------------------
Treasury - 29.0%
- ----------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
11.625%, 11/15/02 $ 4,300,000 $ 5,799,625
13.125%, 5/15/01 2,800,000 3,796,623
6.875%, 8/15/25 1,200,000 1,354,124
8.125%, 8/15/19 163,000 205,024
----------------------------------------------------------------------------------------
U.S. Treasury Nts.:
8.75%, 8/15/00 2,125,000 2,415,194
9.25%, 1/15/96 3,500,000 3,509,842
9.375%, 4/15/96 318,000 321,875
------------
Total U.S. Government Obligations (Cost $16,639,999) 17,402,307
- ----------------------------------------------------------------------------------------------
Foreign Government Obligations - 30.1%
- ----------------------------------------------------------------------------------------------
Argentina - 0.5%
----------------------------------------------------------------------------------------
Argentina (Republic of):
Medium-Term Nts., 8%, 8/9/97 NLG 400,000 247,662
Bonds, Bonos del Tesoro, Series II, 5.898%,
9/1/97 (5) 30,000 28,984
------------
276,646
- ----------------------------------------------------------------------------------------------
Australia - 2.3%
----------------------------------------------------------------------------------------
New South Wales Treasury Corp. Gtd. Exch.
Bonds, 12% 12/1/01 AUD 140,000 123,469
----------------------------------------------------------------------------------------
Queensland Treasury Corp. Gtd. Nts., 8%,
8/14/01 AUD 1,068,000 795,672
----------------------------------------------------------------------------------------
Treasury Corp. of Victoria Gtd. Bonds, 10.25%,
11/15/06 AUD 90,000 75,095
----------------------------------------------------------------------------------------
Western Australia Treasury Corp. Gtd. Bonds,
10%, 7/15/05 AUD 450,000 368,968
------------
1,363,204
- ----------------------------------------------------------------------------------------------
Brazil - 1.4%
----------------------------------------------------------------------------------------
Brazil (Federal Republic of):
Eligible Interest Bonds, 6.812%, 4/15/06 (5) 500,000 343,750
Interest Due and Unpaid Bonds, 6.688%, 1/1/01 (5) 522,500 450,003
----------------------------------------------------------------------------------------
Petroquimica do Nordeste Sr. Unsec. Unsub. Nts.,
9.50%, 10/19/01 50,000 46,437
------------
840,190
- ----------------------------------------------------------------------------------------------
Bulgaria - 0.8%
----------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds,
6.75%, 7/28/11 (5)(6) 1,000,000 463,750
- ----------------------------------------------------------------------------------------------
Canada - 3.2%
----------------------------------------------------------------------------------------
Canada (Government of) Bonds:
10.25%, 12/1/98 CAD 320,000 260,206
10.25%, 3/1/96 CAD 180,000 133,274
9%, 12/1/04 CAD 460,000 380,792
Series A33, 11.50%, 9/1/00 CAD 1,170,000 1,027,961
9.75%, 10/1/97 CAD 180,000 140,585
------------
1,942,818
- ----------------------------------------------------------------------------------------------
Colombia - 0.4%
----------------------------------------------------------------------------------------
Colombia (Republic of) 1989-1990 Integrated
Loan Facility Bonds, 6.875%, 7/1/01 (5)(7) 257,160 239,159
</TABLE>
53
<PAGE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Foreign Government Obligations (Continued) Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Costa Rica - 0.5%
----------------------------------------------------------------------------------------
Central Bank of Costa Rica Principal Bonds,
Series A, 6.25%, 2/21/10 $ 500,000 $ 310,000
- ----------------------------------------------------------------------------------------------
Denmark -2.0%
----------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds:
7%, 11/10/24 DKK 1,600,000 257,534
8%, 3/15/06 DKK 1,000,000 190,281
8%, 5/15/03 DKK 4,000,000 767,332
------------
1,215,147
- ----------------------------------------------------------------------------------------------
Ecuador - 0.7%
----------------------------------------------------------------------------------------
Ecuador (Republic of) Disc. Bonds, 6.812%,
2/28/25 (5) 800,000 407,000
- ----------------------------------------------------------------------------------------------
France - 0.2%
----------------------------------------------------------------------------------------
France (Government of) Obligation Assimilable
du Tresor Debs.:
8.50%, 10/25/08 FRF 200,000 46,782
8.50%, 4/25/03 FRF 200,000 45,722
------------
92,504
- ----------------------------------------------------------------------------------------------
Germany - 1.2%
----------------------------------------------------------------------------------------
Germany (Republic of) Bonds:
7.75%, 10/1/04 DEM 480,000 368,465
Series 86, 6%, 6/20/16 DEM 100,000 64,327
Series 94, 7.50%. 11/11/04 DEM 400,000 307,809
------------
740,601
- ----------------------------------------------------------------------------------------------
Great Britain - 1.5%
----------------------------------------------------------------------------------------
United Kingdom:
Treasury Nts., 9.50%, 4/18/05 GBP 70,000 123,286
GILT, 10%, 9/8/03 GBP 425,000 765,432
------------
888,718
- ----------------------------------------------------------------------------------------------
Italy - 2.7%
----------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, Buoni
del Tesoro Poliennali:
10.50%, 7/15/00 ITL 315,000,000 200,151
11.50%, 3/1/03 ITL 965,000,000 634,757
10.50%, 7/15/98 ITL 1,260,000,000 800,129
------------
1,635,037
- ----------------------------------------------------------------------------------------------
Jamaica - 0.1%
----------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing
Agreement Nts., Tranche A, 6.75%, 10/16/00 (5)(7) 87,500 78,750
- ----------------------------------------------------------------------------------------------
Jordan - 0.9%
----------------------------------------------------------------------------------------
Hashemite Kingdom of Jordan:
Disc. Bonds, 6.437%, 12/23/23 (5) 500,000 310,000
Par Bonds, 4%, 12/23/23 (8) 500,000 241,875
------------
551,875
- ----------------------------------------------------------------------------------------------
Mexico - 1.6%
----------------------------------------------------------------------------------------
Banco Nacional de Comercio Exterior SNC:
International Finance BV Gtd. Bonds, 10.875%,
6/23/97 (4)(5) 250,000 254,687
Zero Coupon, 10.58%, 6/5/96 (3)(4) 200,000 190,700
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Foreign Government Obligations (Continued) Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Mexico (Continued)
----------------------------------------------------------------------------------------
United Mexican States:
Banco Nacional de Comercio Exterior SNC
International Finance Bv Gtd. MatadorBonds,
7.50%, 7/1/00 $ 235,000 $ 202,100
Combined Facility 3, Loan Participation
Agreement, Tranche A, 6.50%, 9/20/97 (5)(7) 123,840 93,809
Petroleos Mexicanos Gtd. Medium-Term Nts.,
7.60%, 6/15/00 100,000 89,750
Petroleos Mexicanos Gtd. Unsec. Unsub. Nts.,
7.875%, 3/2/99 CAD 200,000 138,213
------------
969,259
- ----------------------------------------------------------------------------------------------
Morocco - 1.3%
----------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 6.594%, 1/1/09 (5) 1,100,000 732,875
Tranche B, 6.521%, 1/1/04 (5) 50,000 37,625
------------
770,500
- ----------------------------------------------------------------------------------------------
New Zealand - 1.9%
----------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds:
10%, 3/15/02 NZD 1,385,000 1,024,323
10%, 7/15/97 NZD 155,000 104,140
------------
1,128,463
- ----------------------------------------------------------------------------------------------
Norway - 0.7%
----------------------------------------------------------------------------------------
Norwegian Government Bonds:
5.75%, 11/30/04 NOK 1,160,000 175,473
9.50%, 10/31/02 NOK 1,435,000 268,859
------------
444,332
- ----------------------------------------------------------------------------------------------
Panama - 0.4%
----------------------------------------------------------------------------------------
Panama (Republic of) Debs., 6.75%, 5/10/02 (5) 250,000 214,219
- ----------------------------------------------------------------------------------------------
Poland - 0.3%
----------------------------------------------------------------------------------------
Poland (Republic of) Treasury Bills, Zero Coupon,
24.959%, 4/17/96 (3)PLZ 500,000 188,298
- ----------------------------------------------------------------------------------------------
Spain - 3.0%
----------------------------------------------------------------------------------------
Spain (Kingdom of):
Bills, Letras del Tesoro, Zero Coupon, 9.426%,
9/6/96 (3)ESP 10,000,000 76,720
Bonds, Bonos y Obligacion del Estado, 10.90%,
8/30/03 ESP 173,600,000 1,509,962
Gtd. Bonds, Bonos y Obligacion del Estado,
10.55%, 11/30/96 ESP 25,600,000 213,340
------------
1,800,022
- ----------------------------------------------------------------------------------------------
Supranational - 0.4%
----------------------------------------------------------------------------------------
International Bank for Reconstruction and
Development Bonds, 12.50%, 7/25/97 NZD 325,000 226,281
- ----------------------------------------------------------------------------------------------
Sweden - 1.1%
----------------------------------------------------------------------------------------
Sweden (Kingdom of) Bonds:
Series 1030, 13%, 6/15/01 SEK 300,000 54,485
Series 1033, 10.25%, 5/5/03 SEK 3,700,000 615,899
------------
670,384
- ----------------------------------------------------------------------------------------------
Trinidad & Tobago - 0.5%
----------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation
Agreement, Tranche A, 1.563%, 9/30/00 (5)(7) JPY 39,999,998 328,642
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Foreign Government Obligations (Continued) Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Venezuela - 0.5%
----------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series
DL, 6.563% 12/18/07 (5) $ 500,000 $ 276,250
------------
Total Foreign Government Obligations (Cost $17,588,999) 18,062,049
- ----------------------------------------------------------------------------------------------
Corporate Bonds and Notes - 25.8%
- ----------------------------------------------------------------------------------------------
Basic Industry - 1.9%
- ----------------------------------------------------------------------------------------------
Chemicals - 0.2%
----------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 100,000 107,250
- ----------------------------------------------------------------------------------------------
Metals/Mining - 0.0%
----------------------------------------------------------------------------------------
UCAR Global Enterprises, Inc., 12% Sr. Sub.
Nts., 1/15/05 10,000 11,425
- ----------------------------------------------------------------------------------------------
Paper - 1.4%
----------------------------------------------------------------------------------------
Domtar, Inc., 11.25% Debs., 9/15/17 100,000 106,500
----------------------------------------------------------------------------------------
Gaylord Container Corp., 0%/12.75% Sr. Sub.
Disc. Debs., 5/15/05 (9) 200,000 197,000
----------------------------------------------------------------------------------------
Repap New Brunswick, Inc., 9.25% First
Priority Sr. Sec Nts., 7/15/00 (5) 200,000 201,000
----------------------------------------------------------------------------------------
Riverwood International Corp., 10.75% Sr.
Nts., 6/15/00 100,000 106,875
----------------------------------------------------------------------------------------
Stone Container Corp., 10.75% First Mtg. Nts.,
10/1/02 190,000 198,550
------------
809,925
- ----------------------------------------------------------------------------------------------
Steel - 0.3%
----------------------------------------------------------------------------------------
Jorgensen (Earle M.) Co., 10.75% Sr. Nts.,
3/1/00 50,000 46,250
----------------------------------------------------------------------------------------
Wheel-Pittsburgh Corp., 9.375% Sr. Nts.,
11/15/03 150,000 143,625
------------
189,875
- ----------------------------------------------------------------------------------------------
Consumer Related - 6.3%
- ----------------------------------------------------------------------------------------------
Consumer Products - 1.2%
----------------------------------------------------------------------------------------
Coleman Holdings, Inc., Zero Coupon Sr. Sec.
Disc. Nts., Series B, 12.575%, 5/27/98 (3) 50,000 40,000
----------------------------------------------------------------------------------------
Harman International Industries, Inc., 12%
Sr. Sub. Nts., 8/1/02 150,000 165,750
----------------------------------------------------------------------------------------
International Semi-Tech Microelectronics, Inc.,
0%, 11.50% Sr. Sec. Disc. Nts., 8/15/03 (9) 400,000 212,000
----------------------------------------------------------------------------------------
Tag-Heuer International SA, 12% Sr. Sub. Nts.,
12/15/05 (4) 200,000 200,750
----------------------------------------------------------------------------------------
Williams (J. B.) Holdings, Inc., 12% Sr. Nts., 3/1/04 100,000 100,000
------------
718,500
- ----------------------------------------------------------------------------------------------
Food/Beverages/Tobacco - 0.7%
----------------------------------------------------------------------------------------
Dr. Pepper Bottling Holdings, Inc., 0%/11.625%
Sr. Disc. Nts., 2/15/03 (9) 200,000 160,000
----------------------------------------------------------------------------------------
Pulsar Internacional SA de CV, 11.80% Nts.,
9/19/96 (7) 250,000 251,875
------------
411,875
- ----------------------------------------------------------------------------------------------
Healthcare - 2.0%
----------------------------------------------------------------------------------------
AmeriSource Corp., 11.25% Sr. Debs., 7/15/05 (10) 87,579 96,775
----------------------------------------------------------------------------------------
Capstone Capital Corp., 10.50% Cv. Sub. Debs.,
4/1/02 200,000 239,750
----------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts.,
7/15/02 (4) 200,000 217,000
----------------------------------------------------------------------------------------
IVAC Corp., 9.25% Sr. Nts., 12/1/02 150,000 154,500
----------------------------------------------------------------------------------------
Quorum Health Group, Inc., 8.75% Sr. Sub. Nts.,
11/1/05 150,000 155,813
----------------------------------------------------------------------------------------
Tenet Healthcare Corp., 10.125% Sr. Sub. Nts.,
3/1/05 100,000 111,250
----------------------------------------------------------------------------------------
Total Renal Care, Inc., 0%/12% Sr. Sub. Disc.
Nts., 8/15/04 (9) 205,000 197,825
------------
1,172,913
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Corporate Bonds and Notes (Continued) Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Consumer Related (Continued)
- ----------------------------------------------------------------------------------------------
Hotel/Gaming - 1.6%
----------------------------------------------------------------------------------------
Bally's Casino Holdings, Inc., Zero Coupon
Sr. Disc. Nts., 9.897%, 6/15/98 (3) $ 200,000 $ 161,000
----------------------------------------------------------------------------------------
Grand Casinos, Inc., 10.125% Gtd. First Mtg.
Nts., 12/1/03 250,000 261,875
----------------------------------------------------------------------------------------
HMC Acquisition Properties, Inc., 9% Sr. Nts.,
12/15/07 (4) 150,000 150,750
----------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 13.50% Sr.
Sec. Nts., 11/15/02 (4) 100,000 108,500
----------------------------------------------------------------------------------------
Station Casinos, Inc., 9.625% Sr. Sub. Nts.,
6/1/03 100,000 98,500
----------------------------------------------------------------------------------------
Trump Plaza Funding, Inc., 10.875% Gtd. Mtg. Nts.,
6/15/01 150,000 156,000
------------
936,625
- ----------------------------------------------------------------------------------------------
Restaurants - 0.3%
----------------------------------------------------------------------------------------
Carrols Corp., 11.50% Sr. Nts., 8/15/03 100,000 101,500
----------------------------------------------------------------------------------------
Foodmaker, Inc., 9.25% Sr. Nts., 3/1/99 100,000 96,250
------------
197,750
- ----------------------------------------------------------------------------------------------
Textile/Apparel - 0.5%
----------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, Zero Coupon Promissory
Nts., 17.90%, 10/23/96 (3)IDR 300,000,000 110,084
----------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub.
Debs., 12/1/02 200,000 197,000
------------
307,084
- ----------------------------------------------------------------------------------------------
Energy - 1.3%
----------------------------------------------------------------------------------------
Chesapeake Energy Corp., 10.50% Sr. Nts., 6/1/02 150,000 157,875
----------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., 12.25% Sub.
Debs., 2/1/05 100,000 112,000
----------------------------------------------------------------------------------------
Plains Resources, Inc., 12% Sr. Sub. Nts., 10/1/99 100,000 104,000
----------------------------------------------------------------------------------------
Triton Energy Corp., Zero Coupon Sr. Sub. Disc.
Nts., 10.493%, 11/1/97 (3) 100,000 86,750
----------------------------------------------------------------------------------------
United Meridian Corp., 10.375% Gtd. Sr. Sub. Nts.,
10/15/05 200,000 212,500
----------------------------------------------------------------------------------------
Vintage Petroleum, Inc., 9% Sr. Sub. Nts., 12/15/05 100,000 101,250
------------
774,375
- ----------------------------------------------------------------------------------------------
Financial Services - 1.5%
- ----------------------------------------------------------------------------------------------
Banks & Thrifts - 0.9%
----------------------------------------------------------------------------------------
Banco Bamerindus do Brasil SA:
10.50% Debs., 6/23/97 100,000 92,000
11% Sr. Unsub. Unsec. Bonds, 10/6/97 100,000 92,000
----------------------------------------------------------------------------------------
Banco Ganadero SA, Zero Coupon:
Nts., 9.931%, 7/1/96 (3)(4) 100,000 95,404
Sr. Unsub. Unsec. Nts., 9.931%, 6/15/96 (3)(4) 50,000 47,904
----------------------------------------------------------------------------------------
Banco Mexicano SA, 8% Sr. Unsub. Unsec.
Exchangable Medium-Term Nts., 11/4/98 200,000 168,500
----------------------------------------------------------------------------------------
Morgan Stanley Group, 14.25% Indian Rupee
Indexed Nts., 6/26/96 INR 1,570,500 44,662
------------
540,470
- ----------------------------------------------------------------------------------------------
Diversified Financial - 0.4%
----------------------------------------------------------------------------------------
Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98 200,000 170,000
----------------------------------------------------------------------------------------
Olympic Financial Ltd., 13% Sr. Nts., 5/1/00 100,000 109,500
------------
279,500
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Corporate Bonds and Notes (Continued) Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Financial Services (Continued)
- ----------------------------------------------------------------------------------------------
Insurance - 0.2%
----------------------------------------------------------------------------------------
Terra Nova Insurance (UK) Holdings PLC, 10.75%
Sr. Nts., 7/1/05 $ 100,000 $ 109,500
- ----------------------------------------------------------------------------------------------
Housing Related - 0.6%
- ----------------------------------------------------------------------------------------------
Building Materials - 0.1%
----------------------------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 100,000 94,875
- ----------------------------------------------------------------------------------------------
Homebuilders/Real Estate - 0.5%
----------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec.
Nts., Series B, 4/1/02 100,000 102,500
----------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series
1993-A 12/1/11 (4) 250,000 186,250
------------
288,750
- ----------------------------------------------------------------------------------------------
Manufacturing - 1.0%
- ----------------------------------------------------------------------------------------------
Aerospace/Electronics/Computers - 0.5%
----------------------------------------------------------------------------------------
Berg Electronics Holdings Corp., 11.375% Sr.
Sub. Debs., 5/1/03 50,000 56,250
----------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12%
Sr. Sub. Nts., 8/1/05 100,000 103,250
----------------------------------------------------------------------------------------
Rohr, Inc., 11.625% Sr. Nts., 5/15/03 100,000 109,500
----------------------------------------------------------------------------------------
Unisys Corp., 13.50% Credit Sensitive Nts.,
7/1/97 (5) 50,000 47,750
------------
316,750
- ----------------------------------------------------------------------------------------------
Automotive - 0.5%
----------------------------------------------------------------------------------------
Foamex LP/Foamex Capital Corp., 11.25% Sr.
Nts., 10/1/02 200,000 193,000
----------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 150,000 126,000
------------
319,000
- ----------------------------------------------------------------------------------------------
Media - 6.0%
----------------------------------------------------------------------------------------
Broadcasting - 0.8%
----------------------------------------------------------------------------------------
Act III Broadcasting, Inc., 9.625% Sr. Sub.
Nts., 12/15/03 50,000 50,375
----------------------------------------------------------------------------------------
New City Communications, Inc., 11.375% Sr.
Sub. Nts., 11/1/03 50,000 46,500
----------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr.
Sub. Nts., 10/1/02 (4) 250,000 252,500
----------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10% Sr.
Sub. Nts., 12/15/03 100,000 102,500
------------
451,875
- ----------------------------------------------------------------------------------------------
Cable Television - 3.7%
----------------------------------------------------------------------------------------
American Telecasting, Inc., 0%/14.50% Sr. Disc.
Nts., 6/15/04 (9) 322,737 223,495
----------------------------------------------------------------------------------------
Australis Media Ltd., Units (each unit consists
of $1,000 principal amount of 0%/14% Sr. Sub. Disc.
Nts., 5/15/03 and one warrant to purchase 57.721
ordinary shares) (9)(11) 300,000 219,000
----------------------------------------------------------------------------------------
Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts.,
7/15/04 (9) 100,000 71,375
----------------------------------------------------------------------------------------
Cablevision Systems Corp., 10.75% Sr. Sub.
Debs., 4/1/04 100,000 106,250
----------------------------------------------------------------------------------------
Continental Cablevision, Inc., 11% Sr. Sub.
Debs., 6/1/07 300,000 336,000
----------------------------------------------------------------------------------------
Fundy Cable Ltd., 11% Sr. Sec. Second Priority
Nts., 11/15/05 100,000 105,000
----------------------------------------------------------------------------------------
Marcus Cable Co. LP/Marcus Cable Capital Corp.,
0%/14.25% Sr. Disc. Nts., 12/15/05 (9) 200,000 137,000
----------------------------------------------------------------------------------------
Marcus Cable Operating Co. LP/Marcus Cable
Capital Corp., 0%/13.50% Gtd. Sr. Sub. Disc.
Nts., Series II, 8/1/04 (9) 200,000 149,250
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Corporate Bonds and Notes (Continued) Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Media (Continued)
- ----------------------------------------------------------------------------------------------
Cable Television (Continued)
----------------------------------------------------------------------------------------
Rogers Cablesystems Ltd., 10% Sr. Sec. Second
Priority Debs., 12/1/07 $ 300,000 $ 320,250
----------------------------------------------------------------------------------------
TeleWest PLC, 0%/11% Sr. Disc. Debs., 10/1/07 (9) 300,000 181,875
----------------------------------------------------------------------------------------
Time Warner Entertainment LP/Time Warner, Inc.,
8.375% Sr. Debs., 3/15/23 200,000 217,233
----------------------------------------------------------------------------------------
Time Warner, Inc., 9.125% Debs., 1/15/13 50,000 56,385
----------------------------------------------------------------------------------------
United International Holdings, Inc., Zero
Coupon Sr. Sec. Disc. Nts., 12.544%, 11/15/99 (3) 200,000 125,000
------------
2,248,113
- ----------------------------------------------------------------------------------------------
Diversified Media - 1.2%
----------------------------------------------------------------------------------------
Ackerley Communications, Inc., 10.75% Sr. Sec.
Nts., Series A, 10/1/03 200,000 214,000
----------------------------------------------------------------------------------------
Echostar Communications Corp., 0%/12.875% Sr. Disc.
Nts., 6/1/04 (9) 100,000 67,500
----------------------------------------------------------------------------------------
Lamar Advertising Co., 11% Sr. Sec. Nts.,
5/15/03 150,000 156,000
----------------------------------------------------------------------------------------
Outdoor Systems, Inc., 10.75% Sr. Nts., 8/15/03 100,000 97,500
----------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp., 9.75% Sr.
Sec. Nts., 150,000 159,375
------------
694,375
- ----------------------------------------------------------------------------------------------
Entertainment/Film - 0.3%
----------------------------------------------------------------------------------------
Imax Corp., 7% Sr. Nts., 3/1/01 (8) 200,000 197,000
- ----------------------------------------------------------------------------------------------
Other - 0.6%
- ----------------------------------------------------------------------------------------------
Conglomerates - 0.4%
----------------------------------------------------------------------------------------
MacAndrews & Forbes Holdings, Inc., 13% Sub.
Debs., 3/1/99 175,000 177,625
----------------------------------------------------------------------------------------
Talley Industries, Inc., 0%/12.25% Sr. Disc.
Debs., 10/15/05 (9) 100,000 74,500
------------
252,125
- ----------------------------------------------------------------------------------------------
Services - 0.2%
----------------------------------------------------------------------------------------
Borg-Warner Security Corp., 9.125% Sr. Sub. Nts.,
5/1/03 100,000 91,500
- ----------------------------------------------------------------------------------------------
Retail - 0.7%
- ----------------------------------------------------------------------------------------------
Specialty Retailing - 0.2%
----------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 12% Sr. Nts.,
10/01/03 70,000 65,450
----------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts.,
5/01/03 100,000 98,000
------------
163,450
- ----------------------------------------------------------------------------------------------
Supermarkets - 0.5%
----------------------------------------------------------------------------------------
Grand Union Co., 12% Sr. Nts., 9/1/04 200,000 174,000
----------------------------------------------------------------------------------------
Purity Supreme, Inc., 11.75% Sr. Sec. Nts.,
Series B, 8/1/99 100,000 110,750
------------
284,750
- ----------------------------------------------------------------------------------------------
Transportation - 0.9%
- ----------------------------------------------------------------------------------------------
Air Transportation - 0.7%
----------------------------------------------------------------------------------------
American International Group, Inc., 11.70%
Unsec. Unsub. Bonds, 12/4/01 ITL 270,000,000 179,345
----------------------------------------------------------------------------------------
Atlas Air, Inc., 12.25% Pass-Through
Certificates, 12/1/02 250,000 256,250
------------
435,595
- ----------------------------------------------------------------------------------------------
Railroads - 0.2%
----------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp.,
0%, 13.375% Sr. Disc. Nts., Series B,
12/15/03 (9) 200,000 133,000
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Corporate Bonds and Notes (Continued) Amount(1) (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Utilities - 5.0%
- ----------------------------------------------------------------------------------------------
Electric Utilities - 0.7%
----------------------------------------------------------------------------------------
Beaver Valley II Funding Corp., 9% Second Lease
Obligation Bonds, 6/1/17 $ 199,000 $ 170,304
----------------------------------------------------------------------------------------
El Paso Electric Co., 10.75% Lease Obligation
Bonds, 4/1/13 (12) 100,000 67,873
----------------------------------------------------------------------------------------
First PV Funding Corp., 10.30% Lease
Obligation Bonds, Series 1986A, 1/15/14 200,000 204,312
------------
442,489
- ----------------------------------------------------------------------------------------------
Telecommunications - 4.3%
----------------------------------------------------------------------------------------
A+ Network, Inc., 11.875% Sr. Sub. Nts.,
11/1/05 200,000 202,500
----------------------------------------------------------------------------------------
Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc.
Nts., 12/1/04 (9) 200,000 144,000
----------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (4)(9) 150,000 106,500
----------------------------------------------------------------------------------------
Cellular Communications International, Inc.,
Zero Coupon Sr. Disc. Nts., 11.44%, 8/15/00 (3) 300,000 180,750
----------------------------------------------------------------------------------------
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts.,
9/1/03 (9) 50,000 40,063
----------------------------------------------------------------------------------------
Cencall Communications Corp., 0%/10.125%
Sr. Disc. Nts., 1/15/04 (9) 300,000 169,500
----------------------------------------------------------------------------------------
Comunicacion Celular SA, Units (each unit
consists of $1,000 principal 0%/13.125% sr.
deferred coupon bond, 11/15/03 and one warrant
to purchase 12,860 shares of common stock at
$1.32 per 1,000 shares) (4)(9)(11) 200,000 114,000
----------------------------------------------------------------------------------------
Geotek Communications, Inc., 0%/15% Sr. Sec.
Disc. Nts., 7/15/05 (9) 250,000 113,750
----------------------------------------------------------------------------------------
GST Telecommunications, Inc., Units (each unit
consists of each 0%/13.875% sr. disc. nts.,
12/15/05 and one 0%/13.875% cv. sr. sub.
disc. nt., 12/15/05) (4)(9)(11) 225,000 117,500
----------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance
Corp., 0%/11.375% Sr. Sub. Disc. Nts., 10/1/00 (9) 250,000 213,750
----------------------------------------------------------------------------------------
In-Flight Phone Corp., 0%/14% Sr. Disc. Nts.,
5/15/02 (9) 200,000 67,000
----------------------------------------------------------------------------------------
IntelCom Group (USA), Inc., 0%/13.50% Sr.
Disc. Nts., 9/15/05 (4)(9) 250,000 144,375
----------------------------------------------------------------------------------------
MFS Communications, Inc., 0%/9.375% Sr. Disc.
Nts., 1/15/04 (9) 200,000 161,000
----------------------------------------------------------------------------------------
Nextel Communications, Inc., 0%/11.50% Sr.
Disc. Nts., 9/1/03 (9) 300,000 185,625
----------------------------------------------------------------------------------------
PriCellular Wireless Corp., 0%/14% Sr. Sub.
Disc. Nts., 11/15/01 (9) 300,000 264,000
----------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 14% Sr.
Nts., 11/1/04 150,000 176,250
----------------------------------------------------------------------------------------
WinStar Communications, Inc., Units (each
unit consists of two $1,000 principal amount
of 0%/14% sr. disc. nts., 10/15/05 and one
cv. sr. sub. disc. nts., 10/15/05) (4)(9)(11) 100,000 158,500
------------
2,559,063
------------
Total Corporate Bonds and Notes (Cost $15,112,269) 15,539,777
Shares
- ----------------------------------------------------------------------------------------------
Common Stocks - 0.1%
----------------------------------------------------------------------------------------
Celcaribe SA (4)(13) 24,390 29,024
----------------------------------------------------------------------------------------
EchoStar Communications Corp., Cl. A 600 10,913
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A (13) 1,000 $ 14,750
------------
Total Common Stocks (Cost $45,399) 54,687
- ----------------------------------------------------------------------------------------------
Preferred Stocks - 1.5%
----------------------------------------------------------------------------------------
BankAmerica Corp., 8.375%, Series K 7,000 181,125
----------------------------------------------------------------------------------------
California Federal Bank, 10.625% Non-Cum., Series B 2,000 217,000
----------------------------------------------------------------------------------------
First Nationwide Bank, 11.50% Non-Cum. 2,000 224,750
----------------------------------------------------------------------------------------
Glendale Federal Bank, F.S.B., 8.75% Non-Cum.
Cv., Series E 1,000 45,250
----------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv., Series B 6,000 106,500
----------------------------------------------------------------------------------------
SDW Holdings Corp., Units (each unit consists of ten
shares of sr. exchangable preferred stock and one cl.
B warrant to purchase one share of common stock) (4)(11) 375 108,750
------------
Total Preferred Stocks (Cost $865,020) 883,375
Units
- ----------------------------------------------------------------------------------------------
Rights, Warrants and Certificates - 0.1%
- ----------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99 1,500 9,000
----------------------------------------------------------------------------------------
Cellular Communications International, Inc. Wts., Exp. 8/03 300 6,750
----------------------------------------------------------------------------------------
Eye Care Centers of America, Inc. Wts., Exp.
10/03 (4) 70 350
----------------------------------------------------------------------------------------
Geotek Communications, Inc. Wts., Exp. 7/05 (4) 7,500 15,000
----------------------------------------------------------------------------------------
Icon Health & Fitness, Inc. Wts., Exp. 11/99 (4) 200 5,000
----------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02 (4) 200 --
----------------------------------------------------------------------------------------
IntelCom Group, Inc. Wts., Exp. 9/05 (4) 825 3,300
----------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96 (4) 36 2
----------------------------------------------------------------------------------------
United International Securities Ltd. Wts., Exp. 11/99 200 5,712
------------
Total Rights, Warrants and Certificates (Cost $11,014) 45,114
Date Strike Contracts
- ----------------------------------------------------------------------------------------------
Put Options Purchased - 0.0%
- ----------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Eligible
Interest Bonds, 6.812%, 4/15/06, Put Opt.
(Cost $9,750) Jan. $64.75 500 --
Principal
Amount(1)
- ----------------------------------------------------------------------------------------------
Structured Instruments - 1.6%
- ----------------------------------------------------------------------------------------------
Goldman, Sachs & Co. Argentina Local Market
Securities Trust, 11.30%, 4/1/00 [representing
debt of Argentina (Republic of) Bonos del Tesoro
Bonds, Series 10, 5.742%, 4/1/00 and an interest
rate swap between Goldman Sachs and the Trust] (7) $ 234,782 229,500
----------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.:
11.318%, 2/15/96 (indexed to the Nota Do Tesouro
Nacional, Zero Coupon, 2/15/96 (3) 250,000 246,250
11.136%, 3/5/96 (indexed to the Nota Do Tesouro
Nacional, Zero Coupon, 3/4/96 (3) 200,000 195,680
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund
Statement of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Structured Instruments (Continued) Amount(1) (Note 1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
United Mexican States, Linked Nts. (indexed
to the greater of Cetes Option Amount or USD
LIBOR Option Amount, 11/27/96) (4) $ 300,000 $ 305,475
------------
Total Structured Instruments (Cost $977,638) 976,905
- ----------------------------------------------------------------------------------------------
Repurchase Agreement - 0.8%
- ----------------------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 5.90%, dated 12/29/95, to be
repurchased at $500,328 on 1/2/96, collateralized by U.S. Treasury Nts.,
6.875%, 8/31/99, with a value of $178,667, and U.S. Treasury Bonds,
7.125%-7.625%, 11/15/22-2/15/23, with a value of $336,642
(Cost $500,000) 500,000 500,000
- ----------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $57,397,784) 98.6% 59,245,209
- ----------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.4 852,404
---------- -------------
Net Assets 100.0% $ 60,097,613
==========
=============
</TABLE>
1. Principal amount is reported in U.S. Dollars, except for those denoted
in the following currencies:
AUD - Australian Dollar INR - Indian Rupee
CAD - Canadian Dollar ITL - Italian Lira
CLP - Chilean Peso JPY - Japanese Yen
DEM - German Deutsche Mark NLG - Netherlands Guilder
DKK - Danish Krone NOK - Norwegian Krone
ESP - Spanish Peseta NZD - New Zealand Dollar
FRF - French Franc PLZ - Polish Zloty
GBP - British Pound Sterling SEK - Swedish Krona
HUF - Hungarian Forint THB - Thai Baht
IDR - Indonesian Rupiah
2. Indexed instrument for which the principal amount and/or interest due
at maturity is affected by the relative value of a foreign currency.
3. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
4. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $3,264,200 or 5.43% of the Fund's
net assets, at December 31, 1995.
5. Represents the current interest rate for a variable rate security.
6. A sufficient amount of liquid assets has been designated to cover
outstanding written call options, as follows:
<TABLE>
<CAPTION>
Principal
Subject Expiration Exercise Premium Market
Value
To Call Date Price Received See Note 1
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
Bulgaria (Republic of) Interest Arrears
Bonds, 6.75%, 7/28/11 1,000,000 1/96 $45 $14,300
$13,900
</TABLE>
7. Identifies issues considered to be illiquid - See Note 7 of Notes to
Financial Statements.
8. Represents the current interest rate for an increasing rate security.
9. Denotes a step bond: a zero coupon bond that converts to a fixed rate
of interest at a designated future date.
10. Interest or dividend is paid in kind.
11. Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units
which represent debt securities, principal amount disclosed represents
total underlying principal.
12. Non-income producing--issuer is in default of interest payment.
13. Non-income producing security.
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth & Income Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Amount (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Convertible Corporate Bonds and Notes - 2.0%
- ---------------------------------------------------------------------------------------------------
ADT Operations, Inc., Zero Coupon Cv. Sub. Nts.,
6.148%, 7/6/10 (1) $ 45,000 $ 21,375
---------------------------------------------------------------------------------------------
Continental Homes Holding Corp., 6.875% Cv. Sub.
Nts., 11/1/02 25,000 29,468
---------------------------------------------------------------------------------------------
Federated Department Stores, Inc., 5% Cv. Sub.
Nts., 10/1/03 15,000 15,169
---------------------------------------------------------------------------------------------
Sandoz Capital BVI Ltd., 2% Cv. Gtd. Sr. Unsec.
Unsub Nts. 10/6/02 (2) 20,000 19,000
----------------
Total Convertible Corporate Bonds and Notes (Cost $75,554) 85,012
Shares
- ---------------------------------------------------------------------------------------------------
Common Stocks - 74.8%
- ---------------------------------------------------------------------------------------------------
Basic Materials - 1.8%
Chemicals - 1.5%
---------------------------------------------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. 650 45,419
---------------------------------------------------------------------------------------------
W.R. Grace & Co. 300 17,737
----------------
63,156
- ---------------------------------------------------------------------------------------------------
Paper - 0.3%
---------------------------------------------------------------------------------------------
Visioneer, Inc. (3) 700 15,575
- ---------------------------------------------------------------------------------------------------
Consumer Cyclicals - 16.0%
- ---------------------------------------------------------------------------------------------------
Autos & Housing - 1.2%
---------------------------------------------------------------------------------------------
Ford Motor Co. 800 23,200
---------------------------------------------------------------------------------------------
General Motors Corp. 500 26,437
----------------
49,637
- ---------------------------------------------------------------------------------------------------
Leisure & Entertainment - 8.2%
---------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc. (3) 1,250 34,844
---------------------------------------------------------------------------------------------
Eastman Kodak Co. 350 23,450
---------------------------------------------------------------------------------------------
Pixar, Inc. (3) 5,000 144,375
---------------------------------------------------------------------------------------------
Southwest Airlines Co. 1,000 23,250
---------------------------------------------------------------------------------------------
Western Pacific Airlines, Inc. (3) 7,500 125,625
----------------
351,544
- ---------------------------------------------------------------------------------------------------
Media - 2.5%
---------------------------------------------------------------------------------------------
Capital Cities/ABC, Inc. 250 30,844
---------------------------------------------------------------------------------------------
Comcast Corp., Cl. A Special 1,500 27,281
---------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B (3) 1,000 47,375
----------------
105,500
- ---------------------------------------------------------------------------------------------------
Retail: General - 1.7%
---------------------------------------------------------------------------------------------
Dillard Department Stores, Inc., Cl. A 1,250 35,625
---------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A 1,500 37,500
----------------
73,125
- ---------------------------------------------------------------------------------------------------
Retail: Specialty - 2.4%
---------------------------------------------------------------------------------------------
Alco Standard Corp. 350 15,969
---------------------------------------------------------------------------------------------
Nine West Group, Inc. (3) 1,250 46,875
---------------------------------------------------------------------------------------------
Tandy Corp. 1,000 41,500
----------------
104,344
- ---------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals - 10.1%
- ---------------------------------------------------------------------------------------------------
Beverages - 0.8%
---------------------------------------------------------------------------------------------
Boston Beer Co., Inc., Cl. A (3) 800 19,000
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth & Income Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals (Continued)
- ---------------------------------------------------------------------------------------------------
Beverages (Continued)
---------------------------------------------------------------------------------------------
Pete's Brewing Co. (3) 1,000 $ 14,000
----------------
33,000
- ---------------------------------------------------------------------------------------------------
Food - 0.3%
---------------------------------------------------------------------------------------------
IBP, Inc. 300 15,150
- ---------------------------------------------------------------------------------------------------
Healthcare/Drugs - 3.1%
---------------------------------------------------------------------------------------------
Amgen, Inc. 350 20,781
---------------------------------------------------------------------------------------------
Astra AB Free, Series A 1,000 39,987
---------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 300 25,762
---------------------------------------------------------------------------------------------
Genzyme Corp. (3) 750 46,781
----------------
133,311
- ---------------------------------------------------------------------------------------------------
Healthcare/Supplies & Services - 2.9%
---------------------------------------------------------------------------------------------
Columbia/HCA Healthcare Corp. 750 38,062
---------------------------------------------------------------------------------------------
HEALTHSOUTH Corp. 500 14,562
---------------------------------------------------------------------------------------------
Humana, Inc. (3) 500 13,687
---------------------------------------------------------------------------------------------
National Surgery Centers, Inc. (3) 1,000 23,000
---------------------------------------------------------------------------------------------
Tenet Healthcare Corp. (3) 1,000 20,750
---------------------------------------------------------------------------------------------
U.S. Healthcare, Inc. 300 13,950
----------------
124,011
- ---------------------------------------------------------------------------------------------------
Household Goods - 1.7%
---------------------------------------------------------------------------------------------
Estee Lauder Cos., Inc., (The) Cl. A 3 1,500 52,312
---------------------------------------------------------------------------------------------
Kimberly-Clark Corp. 273 22,591
----------------
74,903
- ---------------------------------------------------------------------------------------------------
Tobacco - 1.3%
---------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 600 54,300
- ---------------------------------------------------------------------------------------------------
Energy - 4.4%
- ---------------------------------------------------------------------------------------------------
Energy Services & Producers - 1.8%
---------------------------------------------------------------------------------------------
Schlumberger Ltd. 500 34,625
---------------------------------------------------------------------------------------------
Weatherford Enterra, Inc. (3) 1,500 43,312
----------------
77,937
- ---------------------------------------------------------------------------------------------------
Oil-Integrated - 2.6%
Atlantic Richfield Co. 250 27,687
---------------------------------------------------------------------------------------------
Brown (Tom), Inc. (3) 1,000 14,625
---------------------------------------------------------------------------------------------
Occidental Petroleum Corp. 1,250 26,719
---------------------------------------------------------------------------------------------
Union Pacific Resources Group, Inc. 300 7,613
---------------------------------------------------------------------------------------------
Unocal Corp. 1,250 36,406
----------------
113,050
- ---------------------------------------------------------------------------------------------------
Financial - 10.5%
- ---------------------------------------------------------------------------------------------------
Banks - 7.3%
---------------------------------------------------------------------------------------------
Ahmanson (H.F.) & Co. 300 7,950
---------------------------------------------------------------------------------------------
Bankers Trust New York Corp. 250 16,625
---------------------------------------------------------------------------------------------
BayBanks, Inc. 400 39,300
---------------------------------------------------------------------------------------------
Chase Manhattan Corp. 1,000 60,625
---------------------------------------------------------------------------------------------
Commercial Federal Corp. 1,000 37,750
---------------------------------------------------------------------------------------------
Fleet Financial Group, Inc. 1,000 40,750
---------------------------------------------------------------------------------------------
Great Western Financial Corp. 1,400 35,700
---------------------------------------------------------------------------------------------
Meridian Bancorp, Inc. 900 41,850
---------------------------------------------------------------------------------------------
Midlantic Corp. 500 32,813
----------------
313,363
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth & Income Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Financial (Continued)
- ---------------------------------------------------------------------------------------------------
Diversified Financial - 2.4%
---------------------------------------------------------------------------------------------
Federal National Mortgage Assn. 350 $ 43,444
---------------------------------------------------------------------------------------------
H & R Block, Inc. 225 9,113
---------------------------------------------------------------------------------------------
Investors Financial Services Corp. (3) 1,500 31,125
---------------------------------------------------------------------------------------------
Travelers Group, Inc. 300 18,863
----------------
102,545
- ---------------------------------------------------------------------------------------------------
Insurance - 0.8%
---------------------------------------------------------------------------------------------
Meadowbrook Insurance Group, Inc. (3) 1,000 33,500
- ---------------------------------------------------------------------------------------------------
Industrial - 9.4%
- ---------------------------------------------------------------------------------------------------
Electrical Equipment - 1.3%
---------------------------------------------------------------------------------------------
General Electric Co. 200 14,400
---------------------------------------------------------------------------------------------
Honeywell, Inc. 800 38,900
----------------
53,300
- ---------------------------------------------------------------------------------------------------
Industrial Services - 5.6%
---------------------------------------------------------------------------------------------
CIBER, Inc. (3) 1,000 23,375
---------------------------------------------------------------------------------------------
DST Systems, Inc. (3) 1,500 42,750
---------------------------------------------------------------------------------------------
META Group, Inc. (3) 5,000 153,125
---------------------------------------------------------------------------------------------
Vigoro Corp. 350 21,613
----------------
240,863
- ---------------------------------------------------------------------------------------------------
Manufacturing - 2.2%
---------------------------------------------------------------------------------------------
American Standard Cos., Inc. (3) 1,750 49,000
---------------------------------------------------------------------------------------------
Hanson PLC, ADR 2,000 30,500
---------------------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 200 13,250
----------------
92,750
- ---------------------------------------------------------------------------------------------------
Transportation - 0.3%
---------------------------------------------------------------------------------------------
Canadian National Railway Co. (3) 1,000 15,000
- ---------------------------------------------------------------------------------------------------
Technology - 22.2%
- ---------------------------------------------------------------------------------------------------
Aerospace/Defense - 0.5%
---------------------------------------------------------------------------------------------
Lockheed Martin Corp. 250 19,750
- ---------------------------------------------------------------------------------------------------
Computer Hardware - 5.9%
---------------------------------------------------------------------------------------------
Cabletron Systems, Inc. (3) 250 20,250
---------------------------------------------------------------------------------------------
Citrix Systems, Inc. (3) 500 16,250
---------------------------------------------------------------------------------------------
International Business Machines Corp. 850 77,988
---------------------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A (3) 1,500 27,375
---------------------------------------------------------------------------------------------
Network Appliance, Inc. (3) 1,100 44,138
---------------------------------------------------------------------------------------------
Objective Systems Integrators, Inc. (3) 500 27,375
---------------------------------------------------------------------------------------------
Quantum Corp. (3) 1,250 20,156
---------------------------------------------------------------------------------------------
Sun Microsystems, Inc. (3) 400 18,250
----------------
251,782
- ---------------------------------------------------------------------------------------------------
Computer Software - 10.1%
---------------------------------------------------------------------------------------------
Adobe Systems, Inc. 250 15,500
---------------------------------------------------------------------------------------------
Advent Software, Inc. (3) 1,800 31,950
---------------------------------------------------------------------------------------------
Arbor Software Corp. (3) 1,000 47,250
---------------------------------------------------------------------------------------------
Autodesk, Inc. 500 17,125
---------------------------------------------------------------------------------------------
Black Box Corp. (3) 750 12,281
---------------------------------------------------------------------------------------------
Fractal Design Corp. (3) 2,000 28,000
---------------------------------------------------------------------------------------------
IDX Systems Corp. (3) 700 24,325
---------------------------------------------------------------------------------------------
Informix Corp. (3) 250 7,500
---------------------------------------------------------------------------------------------
Logic Works, Inc. (3) 500 6,250
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth & Income Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Market Value
Common Stocks (Continued) Shares (Note 1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Technology (Continued)
- ---------------------------------------------------------------------------------------------------
Computer Software (Continued)
---------------------------------------------------------------------------------------------
MetaTools, Inc. (3) 500 $ 13,000
---------------------------------------------------------------------------------------------
Oracle Corp. (3) 250 10,594
---------------------------------------------------------------------------------------------
Platinum Technology, Inc. (3) 1,200 22,050
---------------------------------------------------------------------------------------------
Secure Computing Corp. (3) 2,000 112,000
---------------------------------------------------------------------------------------------
Sync Research, Inc. (3) 1,300 58,825
---------------------------------------------------------------------------------------------
Visio Corp. (3) 1,000 28,250
----------------
434,900
- ---------------------------------------------------------------------------------------------------
Electronics - 2.0%
---------------------------------------------------------------------------------------------
Intel Corp. 600 34,050
---------------------------------------------------------------------------------------------
Photon Dynamics, Inc. 3 1,500 12,000
---------------------------------------------------------------------------------------------
Texas Instruments, Inc. 750 38,813
----------------
84,863
- ---------------------------------------------------------------------------------------------------
Telecommunications-Technology - 3.7%
---------------------------------------------------------------------------------------------
AT&T Corp. 400 25,900
---------------------------------------------------------------------------------------------
DSC Communications Corp. 3 750 27,656
---------------------------------------------------------------------------------------------
LCI International, Inc. 3 200 4,100
---------------------------------------------------------------------------------------------
VTEL Corp. 3 1,500 27,750
---------------------------------------------------------------------------------------------
Westell Technologies, Inc., Cl. A 3 3,000 75,375
----------------
160,781
- ---------------------------------------------------------------------------------------------------
Utilities - 0.4%
- ---------------------------------------------------------------------------------------------------
Electric Utilities - 0.4%
---------------------------------------------------------------------------------------------
SCEcorp 1,000 17,750
----------------
Total Common Stocks (Cost $2,723,302) 3,209,690
- ---------------------------------------------------------------------------------------------------
Preferred Stocks - 5.8%
- ---------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cv.
Depositary Shares 750 20,437
---------------------------------------------------------------------------------------------
James River Corp. of Virginia, Depositary Shares
each representing a one-hundredth interest in a
share of Series P, 9% Cum. Cv. Preferred Stock,
Dividend Enhanced Convertible Stock 1,000 23,375
---------------------------------------------------------------------------------------------
Bally Entertainment Corp., 8% Cv. Preferred
Redeemable Increased Dividend Equity Securities 1,500 20,437
---------------------------------------------------------------------------------------------
Continental Airlines Finance Trust, 8.50% Cv.
Trust Originated Preferred Securities (2) 500 26,750
---------------------------------------------------------------------------------------------
Delta Air Lines, Inc., $3.50 Cv. Depositary
Shares, Series C 500 29,688
---------------------------------------------------------------------------------------------
Cablevision Systems Corp., 8.50% Cum. Cv.,
Series I 1,000 27,250
---------------------------------------------------------------------------------------------
Fidelity Federal Bank, 12% Non-Cum. Exchangeable
Perpetual Preferred Stock, Series A 1,000 25,375
---------------------------------------------------------------------------------------------
Advanta Corp., Stock Appreciation Income Linked
Securities (each representing a one-hundredth
interest in a share of 6.75% Cv. Cl. B Preferred
Stock, Series 1995) 500 19,375
---------------------------------------------------------------------------------------------
SunAmerica, Inc., $3.10 Cum. Cv. Depositary Shares 500 32,750
---------------------------------------------------------------------------------------------
Elsag Bailey Financing Trust, 5.50% Cv. Trust
Originated Preferred Securities (2) 500 25,188
----------------
Total Preferred Stocks (Cost $241,615) 250,625
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds - Oppenheimer Growth & Income Fund
Statement of Investments
December 31, 1995
<TABLE>
<CAPTION>
Principal Market Value
Amount (Note 1)
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
Repurchase Agreements - 11.7%
Repurchase agreement with PaineWebber, Inc., 5.90%,
dated 12/29/95, to be repurchased at $500,328 on
1/2/96, collateralized by U.S. Treasury Nts.,
6.875%, 8/31/99, with a value of $178,667, and
U.S. Treasury Bonds, 7.125%-7.625%, 11/15/22-2/15/23,
with a value of $336,642 (Cost $500,000) $500,000 $ 500,000
---------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $3,540,471) 94.3% 4,045,327
---------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 5.7 243,124
----------- ---------------
Net Assets 100.0% 4,288,451
===========
===============
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
2. Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Board
of Trustees. These securities amount to $70,938 or 1.65% of the Fund's
net assets, at December 31, 1995.
3. Non-income producing security.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Statements of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
Oppenheimer
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer
Money High Income Bond
Appreciation Growth
Fund Fund Fund Fund
Fund
- -------------------------------------------------------------------------------------------------------------------------
- ----------
<S> <C> <C> <C>
<C> <C>
ASSETS:
Investments, at value (cost * ) (including repurchase
agreements **) - see accompanying statements:
Unaffiliated companies $62,944,947 $131,522,956 $205,386,016
$335,795,407 $117,817,530
Affiliated companies -- -- -- --
--
Unrealized appreciation on forward foreign currency
exchange contracts - Note 5 -- 805 --
- -- --
Cash 27,216 98,614 475,368
59,048 49,380
Receivables:
Dividends and interest 206,178 2,379,583 3,482,730
96,851 106,959
Shares of beneficial interest sold 2,855,248 92,239 1,549,125
324,174 364,845
Investments sold 541,324 1,271,263
-- 595,258
Other 4,817 6,456 7,575 2,162
5,982
- --------------------------------------------------------------------------
Total assets 66,038,406 134,641,977 212,172,077
336,277,642 118,939,954
- --------------------------------------------------------------------------
LIABILITIES:
Options written, at value (premiums received ***)
- see accompanying statements - Note 4 -- 1,390 --
-- --
Unrealized depreciation on forward foreign currency
exchange contracts - Note 5 -- -- 15,522
- -- --
Payables and other liabilities:
Dividends 162,910 -- -- --
--
Investments purchased -- 1,044,711 779,747
7,783,979 970,555
Shares of beneficial interest redeemed 440,204 111,962 98,746
3,038,804 231,518
Other 48,832 33,134 46,292
50,768 27,991
- --------------------------------------------------------------------------
Total liabilities 651,946 1,191,197 940,307
10,873,551 1,230,064
- --------------------------------------------------------------------------
NET ASSETS $65,386,460 $133,450,780 $211,231,770
$325,404,091 $117,709,890
=============================================
=============
================
COMPOSITION OF NET ASSETS:
Paid-in capital $65,404,807 $129,659,991 $201,057,454
$240,344,897 $84,252,418
Undistributed (distributions in excess of) net
investment income -- 1,473,129 1,342,481
1,115,939 1,290,629
Accumulated net realized gain (loss) from investments
and foreign currency transactions (18,347) (3,407,583) 5,361
20,967,908 8,548,920
Net unrealized appreciation on investments and
translation of assets and liabilities denominated
in foreign currencies -- 5,725,243 8,826,474
62,975,347 23,617,923
- --------------------------------------------------------------------------
NET ASSETS $65,386,460 $133,450,780 $211,231,770
$325,404,091 $117,709,890
=============================================
=============
================
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 65,404,807 12,551,582 17,842,418
9,512,651 4,997,725
NET ASSET VALUE, REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $1.00 $10.63 $11.84
$34.21 $23.55
*Cost:
Unaffiliated companies $62,944,947 $125,812,139 $196,548,402
$272,820,061 $94,199,607
Affiliated companies -- -- -- --
--
**Repurchase Agreements $3,595,000 $2,780,000 $8,500,000
$35,600,000 $23,470,000
***Premiums Received -- $1,430 --
-- --
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Statements of Assets and Liabilities (Continued)
December 31, 1995
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Oppenheimer
Multiple Global Strategic Growth &
Strategies Securities Bond Income
Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
<C>
ASSETS:
Investments, at value (cost * ) (including repurchase
agreements **) - see accompanying statements:
Unaffiliated companies $378,826,790 $361,259,286 $59,245,209
$4,045,327
Affiliated companies 1,368,000 --
- --
Unrealized appreciation on forward foreign currency
exchange contracts - Note 5 2 150,274 --
--
Cash 38,181 136,798 162,525
224,728
Receivables:
Dividends and interest 3,080,691 352,962 1,179,469
5,593
Shares of beneficial interest sold 1,200,686 202,710 200,211
18,236
Investments sold 870,610 4,677,263 578,483
--
Other 12,814 9,300 3,735 2,359
-----------------------------------------------------------
Total assets 384,029,774 368,156,593 61,369,632
4,296,243
-----------------------------------------------------------
LIABILITIES:
Options written, at value (premiums received ***)
- see accompanying statements - Note 4 1,043,325 -- 13,900
--
Unrealized depreciation on forward foreign currency
exchange contracts - Note 5 -- -- 11,657
- --
Payables and other liabilities:
Dividends -- -- -- --
Investments purchased 1,574,416 6,654,962 1,156,926
--
Shares of beneficial interest redeemed 91,258 367,884 68,024
--
Other 57,611 154,914 21,512
7,792
-----------------------------------------------------------
Total liabilities 2,766,610 7,177,760 1,272,019
7,792
-----------------------------------------------------------
NET ASSETS $381,263,164 $360,978,833 $60,097,613
$4,288,451
=============================================
==============
COMPOSITION OF NET ASSETS:
Paid-in capital $329,343,553 $363,343,602 $59,420,799
$3,756,393
Undistributed (distributions in excess of) net
investment income 1,361,279 (1,068) 483,938
(318)
Accumulated net realized gain (loss) from investments
and foreign currency transactions 8,398,861 (26,173,952) (1,648,175)
27,201
Net unrealized appreciation on investments and
translation of assets and liabilities denominated
in foreign currencies 42,159,471 23,810,251 1,841,051
505,175
----------------------------------------------------------
NET ASSETS $381,263,164 $360,978,833 $60,097,613
$4,288,451
=============================================
==============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 26,212,235 24,067,821 12,250,929
342,794
NET ASSET VALUE, REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $14.55 $15.00 $4.91
$12.51
*Cost:
Unaffiliated companies $336,724,928 $337,580,583 $57,397,784
$3,540,471
Affiliated companies -- $1,401,000 --
- --
**Repurchase Agreements $52,200,000 $17,300,000 $500,000
$500,000
***Premiums Received $1,100,095 -- $14,299
--
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Statements of Operations
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Oppenheimer
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer
Money High Income Bond
Appreciation Growth
Fund Fund Fund Fund
Fund
- -------------------------------------------------------------------------------------------------------------------------
- ----------
<S> <C> <C> <C>
<C> <C>
INVESTMENT INCOME:
Interest (net of withholding taxes of *) $4,534,276 $11,710,273 $13,096,739
$2,664,312 $1,001,964
Dividends:
Unaffiliated companies (net of withholding taxes of **) -- 569,924 81,190
330,943 992,690
Affiliated companies (net of withholding taxes of **) -- -- --
-- --
- --------------------------------------------------------------------------
Total income 4,534,276 12,280,197 13,177,929
2,995,255 1,994,654
- --------------------------------------------------------------------------
EXPENSES:
Management fees - Note 6 338,483 866,154 1,280,422
1,790,785 664,977
Custodian fees and expenses 22,290 33,144 37,714
27,791 --
Shareholder reports 10,988 7,870 8,042
11,912 3,864
Legal and auditing fees 7,865 17,092 12,506
12,215 12,202
Insurance expenses 3,683 4,698 5,140
-- 3,525
Trustees' fees and expenses 538 812 2,637
1,699 1,901
Registration and filing fees 25 5,404 16,773
24,486 8,881
Other 777 1,046 1,193 2,916
1,585
- --------------------------------------------------------------------------
Total expenses 384,649 936,220 1,364,427
1,871,804 696,935
- --------------------------------------------------------------------------
NET INVESTMENT INCOME 4,149,627 11,343,977
11,813,502 1,123,451
1,297,719
- --------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) from:
Investments:
Unaffiliated companies 5,356 838,501 861,074
22,379,477 8,674,291
Affiliated companies -- -- -- --
--
Closing and expiration of options written - Note 4 -- (428,900) (14,352)
-- --
Foreign currency transactions -- 213,132 463,409
-- --
Net change in unrealized appreciation or
depreciation on:
Investments -- 9,435,938 13,439,159
47,042,428 16,396,856
Translation of assets and liabilities denominated
in foreign currencies -- (22,937) (120,740)
- -- --
- --------------------------------------------------------------------------
Net realized and unrealized gain 5,356 10,035,734 14,628,550
69,421,905 25,071,147
- --------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $4,154,983 $21,379,711
$26,442,052 $70,545,356
$26,368,866
=============================================
=============
================
*Interest -- -- $7,577 --
--
**Dividends:
Unaffiliated companies -- -- -- $999
$9,674
Affiliated companies -- -- -- --
--
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Statements of Operations (Continued)
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Oppenheimer
Multiple Global Strategic Growth &
Strategies Securities Bond Income
Fund Fund Fund Fund(1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
<C>
INVESTMENT INCOME:
Interest (net of withholding taxes of *) $16,147,769 $1,031,404 $3,754,007
$10,996
Dividends:
Unaffiliated companies (net of withholding taxes of **) 3,114,259 4,699,083 79,325
12,525
Affiliated companies (net of withholding taxes of **) 62,163 --
--
------------------------------------------------------------
Total income 19,262,028 5,792,650 3,833,332
23,521
------------------------------------------------------------
EXPENSES:
Management fees - Note 6 2,540,311 2,451,556 281,335
6,710
Custodian fees and expenses 65,688 457,420 15,150
4,260
Shareholder reports 14,490 11,015 3,111
440
Legal and auditing fees 23,186 17,395 7,000
5,627
Insurance expenses 9,872 7,400 2,621
595
Trustees' fees and expenses 7,851 1,631 286
17
Registration and filing fees 6,188 -- 8,457 1,287
Other 928 720 867 12
------------------------------------------------------------
Total expenses 2,668,514 2,947,137 318,827
18,948
------------------------------------------------------------
NET INVESTMENT INCOME 16,593,514 2,845,513
3,514,505 4,573
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) from:
Investments:
Unaffiliated companies 7,599,655 (31,891,633) (826,576)
27,331
Affiliated companies -- 1,000,520 -- --
Closing and expiration of options written 378,568 -- (47,991)
--
Foreign currency transactions 297,101 5,123,230 5,391
(93)
Net change in unrealized appreciation or
depreciation on:
Investments 39,596,962 33,819,559 2,876,481
505,175
Translation of assets and liabilities denominated
in foreign currencies 379,793 (2,166,551) 862
--
------------------------------------------------------------
Net realized and unrealized gain 48,252,079 5,885,125 2,008,167
532,413
------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $64,845,593 $8,730,638
$5,522,672 $536,986
=============================================
===============
*Interest $10,875 -- -- --
**Dividends:
Unaffiliated companies $32,241 $381,116
$40
Affiliated companies -- $7,446 -- --
</TABLE>
1. For the period from July 5, 1995 (commencement of operations) to
December 31, 1995.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Statements of Changes in Net Assets
For the Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer
Oppenheimer
Money High Income
Bond
Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------
- -----------
1995 1994 1995 1994
1995 1994
<S> <C> <C> <C> <C>
<C> <C>
OPERATIONS:
Net investment income $4,149,627 $3,774,464 $11,343,977
$9,253,988 $11,813,502
$8,900,922
Net realized gain (loss) 5,356 (5,168) 622,733 (3,689,385)
1,310,131 (2,370,155)
Net change in unrealized appreciation or depreciation -- -- 9,413,001 (8,629,376)
13,318,419 (8,824,731)
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
from operations 4,154,983 3,769,296 21,379,711 (3,064,773)
26,442,052 (2,293,964)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net investment income (4,149,626) (3,793,971) (12,039,383)
(6,580,907) (11,209,883)
(7,101,380)
Distributions from net realized gain -- -- -- (2,106,023)
-- (283,274)
Distributions in excess of net realized gain -- -- -- --
-- --
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from
beneficial interest transactions - Note 2 (24,289,814) 28,473,973 28,412,143
14,438,679 60,932,217
32,899,881
- ------------------------------------------------------------------------------
NET ASSETS:
Total increase (decrease) (24,284,457) 28,449,298 37,752,471 2,686,976
76,164,386 23,221,263
Beginning of period 89,670,917 61,221,619 95,698,309
93,011,333 135,067,384 111,846,121
- ------------------------------------------------------------------------------
End of period $65,386,460 $89,670,917 $133,450,780
$95,698,309 $211,231,770
$135,067,384
=============================================
=============
====================
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Statements of Changes in Net Assets(Continued)
For the Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
Oppenheimer
Oppenheimer
Capital Oppenheimer Multiple
Appreciation Growth
Strategies
Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------
- -----------
<S> <C> <C> <C> <C>
<C> <C>
1995 1994 1995 1994 1995
1994
OPERATIONS:
Net investment income $1,123,451 $769,034 $1,297,719
$824,976 $16,593,514
$13,727,119
Net realized gain (loss) 22,379,477 (1,045,951) 8,674,291 1,441,127
8,275,324 8,803,106
Net change in unrealized appreciation or depreciation 47,042,428 (10,016,034) 16,396,856
(1,915,053) 39,976,755
(28,189,733)
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
from operations 70,545,356 (10,292,951) 26,368,866 351,050
64,845,593 (5,659,508)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net investment income (719,183) (218,275) (821,641)
(516,871) (16,066,432)
(13,056,112)
Distributions from net realized gain (363,458) (17,112,748) (973,385)
(127,540) (8,717,288) (1,925,053)
Distributions in excess of net realized gain -- -- -- --
-- --
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from
beneficial interest transactions - Note 2 70,167,835 76,512,412 29,852,876
6,875,487 49,134,087 62,417,829
- ------------------------------------------------------------------------------
NET ASSETS:
Total increase (decrease) 139,630,550 48,888,438 54,426,716
6,582,126 89,195,960 41,777,156
Beginning of period 185,773,541 136,885,103 63,283,174
56,701,048 292,067,204
250,290,048
- ------------------------------------------------------------------------------
End of period $325,404,091 $185,773,541 $117,709,890
$63,283,174 $381,263,164
$292,067,204
=============================================
=============
====================
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Statements of Changes in Net Assets(Continued)
For the Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer
Oppenheimer
Global Strategic
Growth &
Securities Bond
Income
Fund Fund
Fund
- -------------------------------------------------------------------------------------------------------------------------
- ----------
<S> <C> <C> <C>
<C> <C>
1995 1994 1995 1994
1995(1)
OPERATIONS:
Net investment income $2,845,513 $1,162,074 $3,514,505
$1,286,157 $4,573
Net realized gain (loss) (25,767,883) 385,837 (869,176)
(796,115) 27,238
Net change in unrealized appreciation or depreciation 31,653,008 (24,015,375) 2,877,343
(1,120,872) 505,175
- --------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
from operations 8,730,638 (22,467,464) 5,522,672
(630,830) 536,986
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Dividends from net investment income -- (359,955) (3,151,540)
(1,161,570) (4,891)
Distributions from net realized gain (8,174,158) (2,441,859) --
-- --
Distributions in excess of net realized gain -- -- --
(16,802) (37)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from
beneficial interest transactions - Note 2 62,580,432 226,686,688 37,406,166
12,242,999 3,756,393
- --------------------------------------------------------------------------
NET ASSETS:
Total increase (decrease) 63,136,912 201,417,410 39,777,298
10,433,797 4,288,451
Beginning of period 297,841,921 96,424,511 20,320,315
9,886,518 --
- --------------------------------------------------------------------------
End of period $360,978,833 $297,841,921 $60,097,613
$20,320,315 $4,288,451
=============================================
=============
================
</TABLE>
1. For the period from July 5, 1995 (commencement of operations) to
December 31, 1995.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Oppenheimer
Money
Fund
- -------------------------------------------------------------------------------
Year Ended
December 31, 1994 1993 1992
1991
1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $1.00 $1.00 $1.00
$1.00 $1.00
Income from investment operations - net
investment income and net realized gain
on investments .06 .04 .03 .04
.06
Dividends and distributions to shareholders (.06) (.04) (.03)
(.04) (.06)
- -------------------------------------------------------------------------------
Net asset value, end of year $1.00 $1.00 $1.00
$1.00 $1.00
=============================================
=============
=====================
TOTAL RETURN, AT NET ASSET VALUE (1) 5.62% 4.25%
3.09% 3.93%
6.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands) $65,386 $89,671 $61,221
$58,266 $58,709
Average net assets (in thousands) $75,136 $90,264 $57,654
$61,317 $75,747
Ratios to average net assets:
Net investment income 5.52% 4.18% 3.12%
3.76% 5.97%
Expenses .51% .43% .43%
.50% .49%
<CAPTION>
-----------------------------------------------------------------------
1990 1989 1988 1987 1986
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00
$1.00
Income from investment operations - net
investment income and net realized gain
on investments .08 .09 .07 .06
.06
Dividends and distributions to shareholders (.08) (.09) (.07) (.06)
(.06)
-----------------------------------------------------------------------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00
$1.00
=============================================
=============
=============
TOTAL RETURN, AT NET ASSET VALUE (1) 7.84% 9.56% 6.96%
6.74% 6.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands) $89,143 $68,440 $69,468 $42,538
$28,218
Average net assets (in thousands) $82,966 $67,586 $60,241 $35,138
$12,914
Ratios to average net assets:
Net investment income 7.80% 8.82% 7.31% 6.33%
5.68%
Expenses .51% .53% .55% .59%
.75%
</TABLE>
1. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in
additional shares on the reinvestment date, and redemption at the net
asset value calculated on the last business day of the fiscal period.
Total returns are not annualized for periods of less than one full year.
Total returns reflect changes in net investment income only. Total return
information does not reflect expenses that apply at the separate account
level or to related insurance products. Inclusion of these charges would
reduce the total return figures for all periods shown.
See accompanying Notes to Financial Statements.
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
High Income
Fund
- -------------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $9.79 $11.02 $9.74
$9.40 $7.90
Income (loss) from investment operations:
Net investment income .98 .94 .82
1.19 1.28
Net realized and unrealized gain (loss) on
investments and foreign currency .94 (1.27) 1.65
.43 1.30
transactions
- ------------------------------------------------------------------------------
Total income (loss) from investment
operations 1.92 (.33) 2.47 1.62
2.58
- -------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.08) (.66) (1.19)
(1.28) (1.08)
Distributions from net realized gain on
investments and foreign currency
transactions -- (.24) -- --
--
- -------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.08) (.90) (1.19) (1.28)
(1.08)
- -------------------------------------------------------------------------------
Net asset value, end of period $10.63 $ 9.79 $11.02
$9.74 $9.40
=============================================
=============
=====================
TOTAL RETURN, AT NET ASSET VALUE(2) 20.37% (3.18)%
26.34% 17.92%
33.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $133,451 $ 95,698 $93,011
$40,817 $27,308
Average net assets (in thousands) $115,600 $101,096 $67,000
$36,861 $23,663
Ratios to average net assets:
Net investment income 9.81% 9.15% 10.50%
12.08% 14.26%
Expenses .81% .67% .68%
.73% .75%
Portfolio turnover rate(4) 107.1% 110.1% 135.7%
144.2% 108.0%
<CAPTION>
-------------------------------------------------------------------------
1990 1989 1988 1987
1986(1)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $8.59 $9.30 $9.14 $10.04
$10.00
Income (loss) from investment operations:
Net investment income 1.21 1.09 1.12 1.30
.72
Net realized and unrealized gain (loss) on
investments and foreign currency (.82) (.65) .23 (.51)
(.24)
transactions
-------------------------------------------------------------------------
Total income (loss) from investment
operations .39 .44 1.35 .79
.48
-------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.08) (1.08) (1.07) (1.55)
(.44)
Distributions from net realized gain on
investments and foreign currency
transactions -- (.07) (.12) (.14)
--
-------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.08) (1.15) (1.19) (1.69)
(.44)
-------------------------------------------------------------------------
Net asset value, end of period $7.90 $8.59 $9.30 $9.14
$10.04
=============================================
=============
===============
TOTAL RETURN, AT NET ASSET VALUE(2) 4.65% 4.84%
15.58% 8.07%
4.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $19,172 $23,698 $25,551 $21,768
$14,833
Average net assets (in thousands) $21,493 $26,040 $24,530 $20,637
$ 8,036
Ratios to average net assets:
Net investment income 14.32% 11.52% 11.94%
13.13% 11.18%(3)
Expenses .75% .75% .75% .75%
.75%(3)
Portfolio turnover rate(4) 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. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 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>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Bond
Fund
- -----------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.78 $11.65 $10.99
$11.15 $10.33
Income (loss) from investment operations:
Net investment income .72 .76 .65 .87
.95
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions 1.07 (.98) .76 (.17)
.80
- -----------------------------------------------------------------------------
Total income (loss) from investment
operations 1.79 (.22) 1.41 .70
1.75
- -----------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.73) (.62) (.75)
(.86) (.93)
Distributions from net realized gain on
investments and foreign currency
transactions -- (.03) -- --
--
- -----------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.73) (.65) (.75) (.86)
(.93)
- -----------------------------------------------------------------------------
Net asset value, end of period $11.84 $10.78 $11.65
$10.99 $11.15
=============================================
=============
===================
TOTAL RETURN, AT NET ASSET VALUE(1) 17.00% (1.94)%
13.04% 6.50%
17.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $211,232 $135,067 $111,846
$63,354 $32,762
Average net assets (in thousands) $170,929 $121,884 $ 87,215
$45,687 $22,169
Ratios to average net assets:
Net investment income 6.91% 7.30% 7.20%
7.81% 8.73%
Expenses .80% .57% .46%
.56% .64%
Portfolio turnover rate(2) 79.4% 35.1% 36.3%
41.3% 7.6%
<CAPTION>
- ----------------------------------------------------------------------------
1990 1989 1988 1987
1986
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.49 $10.15 $10.19
$11.15 $11.27
Income (loss) from investment operations:
Net investment income .97 .98 .94 .97
.97
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (.18) .32 (.05) (.71)
.09
- ----------------------------------------------------------------------------
Total income (loss) from investment
operations .79 1.30 .89 .26
1.06
- ----------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.95) (.96) (.93)
(1.17) (1.03)
Distributions from net realized gain on
investments and foreign currency
transactions -- -- -- (.05)
(.15)
- ----------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.95) (.96) (.93) (1.22)
(1.18)
- ----------------------------------------------------------------------------
Net asset value, end of period $10.33 $10.49 $10.15
$10.19 $11.15
=============================================
=============
==================
TOTAL RETURN, AT NET ASSET VALUE(1) 7.92% 13.32%
8.97% 2.53%
10.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $16,576 $13,422 $ 9,989
$10,415 $7,377
Average net assets (in thousands) $15,088 $11,167 $11,028
$ 8,748 $4,647
Ratios to average net assets:
Net investment income 9.30% 9.34% 9.08%
9.17% 8.71%
Expenses .61% .64% .70%
.75% .75%
Portfolio turnover rate(2) 7.4% 5.4% 36.3%
5.9% 27.7%
</TABLE>
1. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
2. 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>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Capital
Appreciation
Fund
- ------------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $25.95 $31.64 $26.04
$23.24 $15.24
Income (loss) from investment operations:
Net investment income .11 .10 .05 .06
.08
Net realized and unrealized gain (loss) on
investments 8.29 (2.22) 6.71 3.43
8.18
- ------------------------------------------------------------------------------
Total income (loss) from investment operations 8.40 (2.12) 6.76
3.49 8.26
- ------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.09) (.04) (.06)
(.14) (.26)
Distributions from net realized gain on
investments (.05) (3.53) (1.10) (.55)
--
- ------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.14) (3.57) (1.16) (.69)
(.26)
- ------------------------------------------------------------------------------
Net asset value, end of period $34.21 $25.95 $31.64
$26.04 $23.24
=============================================
=============
====================
TOTAL RETURN, AT NET ASSET VALUE(2) 32.52% (7.59)%
27.32% 15.42%
54.72%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $325,404 $185,774 $136,885
$83,335 $49,371
Average net assets (in thousands) $240,730 $153,832 $98,228
$56,371 $34,887
Ratios to average net assets:
Net investment income .47% .50% .23%
.30% .81%
Expenses .78% .57% .47%
.54% .63%
Portfolio turnover rate(4) 125.5% 96.5% 122.8%
78.9% 122.3%
Average brokerage commission rate(5) $0.18 -- --
-- --
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
1990 1989 1988 1987
1986(1)
- -------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $20.40 $16.31 $14.39
$13.12 $16.21
Income (loss) from investment operations:
Net investment income .32 .50 .33 .21
.12
Net realized and unrealized gain (loss) on
investments (3.54) 3.93 1.60 1.67
(1.24)
- -------------------------------------------------------------------------
Total income (loss) from investment operations (3.22) 4.43 1.93
1.88 (1.12)
- -------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.53) (.34) --
(.34) (.21)
Distributions from net realized gain on
investments (1.41) -- (.01) (.27)
(1.76)
- -------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.94) (.34) (.01) (.61)
(1.97)
- -------------------------------------------------------------------------
Net asset value, end of period $15.24 $20.40 $16.31
$14.39 $13.12
=============================================
=============
===============
TOTAL RETURN, AT NET ASSET VALUE(2) (16.82)% 27.57%
13.41% 14.34%
(1.65)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $23,295 $27,523 $13,667
$9,692 $4,549
Average net assets (in thousands) $24,774 $21,307 $13,239
$8,598 $3,099
Ratios to average net assets:
Net investment income 1.93% 3.27% 2.13%
1.68% 2.36%(3)
Expenses .71% .68% .73%
.75% 1.01%(3)
Portfolio turnover rate(4) 222.0% 130.5% 128.7%
138.7% 100.1%
Average brokerage commission rate(5) -- -- --
- -- --
</TABLE>
1. For the six months ended December 31, 1986. Operating results prior
to August 15, 1986 were achieved by Centennial Capital Appreciation Fund,
a separate investment company acquired by OCAP on August 14, 1986.
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Growth
Fund
- -----------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $17.68 $17.70 $16.96
$15.17 $12.54
Income (loss) from investment operations:
Net investment income .25 .22 .46 .16
.30
Net realized and unrealized gain (loss) on
investments 6.10 (.05) .74 1.99
2.82
- -----------------------------------------------------------------------------
Total income (loss) from investment
operations 6.35 .17 1.20 2.15
3.12
- -----------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.22) (.15) (.14)
(.36) (.49)
Distributions from net realized gain on
investments and foreign currency
transactions (.26) (.04) (.32) --
--
- -----------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.48) (.19) (.46) (.36)
(.49)
- -----------------------------------------------------------------------------
Net asset value, end of period $23.55 $17.68 $17.70
$16.96 $15.17
=============================================
=============
===================
TOTAL RETURN, AT NET ASSET VALUE(1) 36.65% .97%
7.25% 14.53%
25.54%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $117,710 $63,283 $56,701
$36,494 $22,032
Average net assets (in thousands) $88,803 $59,953 $46,389
$25,750 $18,810
Ratios to average net assets:
Net investment income 1.46% 1.38% 1.13%
1.36% 2.82%
Expenses .79% .58% .50%
.61% .70%
Portfolio turnover rate(2) 58.2% 53.8% 12.6%
48.7% 133.9%
Average brokerage commission rate(3) $0.07 -- --
-- --
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
1990 1989 1988 1987
1986
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $16.38 $13.64 $11.21
$12.53 $10.95
Income (loss) from investment operations:
Net investment income .56 .66 .29 .20
.13
Net realized and unrealized gain (loss) on
investments (1.79) 2.50 2.19 .24
1.76
- ---------------------------------------------------------------------------
Total income (loss) from investment
operations (1.23) 3.16 2.48 .44
1.89
- ---------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.62) (.35) --
(.34) (.15)
Distributions from net realized gain on
investments and foreign currency
transactions (1.99) (.07) (.05) (1.42)
(.16)
- ---------------------------------------------------------------------------
Total dividends and distributions to
shareholders (2.61) (.42) (.05) (1.76)
(.31)
- ---------------------------------------------------------------------------
Net asset value, end of period $12.54 $16.38 $13.64
$11.21 $12.53
=============================================
=============
=================
TOTAL RETURN, AT NET ASSET VALUE(1) (8.21)% 23.59%
22.09% 3.32%
17.76%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $15,895 $19,301 $17,746
$14,692 $8,287
Average net assets (in thousands) $17,235 $18,596 $15,585
$15,121 $3,744
Ratios to average net assets:
Net investment income 4.09% 3.72% 2.39%
1.56% 2.62%
Expenses .71% .70% .70%
.75% .75%
Portfolio turnover rate(2) 267.9% 148.0% 132.5%
191.0% 100.9%
Average brokerage commission rate(3) -- -- --
- -- --
</TABLE>
1. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
2. 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.
3. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Multiple
Strategies
Fund
- ------------------------------------------------------------------------------
Year Ended
December 31,
1995 1994 1993 1992
1991
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.91 $13.88 $12.47
$11.96 $10.90
Income (loss) from investment operations:
Net investment income .66 .63 .55 .55
.69
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions 2.00 (.90) 1.41 .50
1.15
- ------------------------------------------------------------------------------
Total income (loss) from investment operations 2.66 (.27) 1.96
1.05 1.84
- ------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.65) (.60) (.55)
(.54) (.78)
Distributions from net realized gain on
investments, options written and foreign
currency transactions (.37) (.10) -- --
--
- ------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.02) (.70) (.55) (.54)
(.78)
- ------------------------------------------------------------------------------
Net asset value, end of period $14.55 $12.91 $13.88
$12.47 $11.96
=============================================
=============
====================
TOTAL RETURN, AT NET ASSET VALUE(2) 21.36% (1.95)%
15.95% 8.99%
17.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $381,263 $292,067 $250,290
$159,464 $124,634
Average net assets (in thousands) $344,745 $279,949 $199,954
$139,011 $117,000
Ratios to average net assets:
Net investment income 4.81% 4.90% 4.44%
4.63% 5.95%
Expenses .77% .56% .48%
.55% .54%
Portfolio turnover rate(4) 39.0% 31.4% 32.4%
57.8% 80.3%
Average brokerage commission rate(5) $0.04 -- --
-- --
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------
1990 1989 1988 1987(1)
-----------------------------------------------------------------
<S> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.30 $11.58 $10.04
$10.00
Income (loss) from investment operations:
Net investment income .73 .73 .66
.44
Net realized and unrealized gain (loss) on
investments, options written and foreign
currency transactions (.97) 1.04 1.53
.07
-----------------------------------------------------------------
Total income (loss) from investment operations (.24) 1.77 2.19
.51
-----------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.70) (.68) (.65)
(.43)
Distributions from net realized gain on
investments, options written and foreign
currency transactions (.46) (.37) --
(.04)
-----------------------------------------------------------------
Total dividends and distributions to
shareholders (1.16) (1.05) (.65)
(.47)
-----------------------------------------------------------------
Net asset value, end of period $10.90 $12.30 $11.58
$10.04
=============================================
=============
=======
TOTAL RETURN, AT NET ASSET VALUE(2) (1.91)% 15.76%
22.15% 3.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $118,888 $121,286 $78,386
$53,291
Average net assets (in thousands) $123,231 $101,057 $64,298
$34,256
Ratios to average net assets:
Net investment income 6.53% 6.36% 6.18%
6.12%(3)
Expenses .55% .57% .58
.65%(3)
Portfolio turnover rate(4) 99.2% 66.9% 110.0%
46.9%
Average brokerage commission rate(5) -- -- --
--
</TABLE>
1. For the period from February 9, 1987 (commencement of Operations) to
December 31, 1987.
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, And redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Global Securities
Fund
- ----------------------------------------------------------------
Year Ended
December 31,
1995 1994
1993
- -----------------------------------------------------------------
<S> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $15.09 $16.30
$9.57
Income (loss) from investment operations:
Net investment income .12 .04
(.02)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions .19 (.96)
6.75
- -----------------------------------------------------------------
Total income (loss) from investment operations .31 (.92)
6.73
- -----------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.04)
--
Distributions from net realized gain on investments and
foreign currency transactions (.40) (.25)
--
- -----------------------------------------------------------------
Total dividends and distributions to shareholders (.40) (.29)
--
- -----------------------------------------------------------------
Net asset value, end of period $15.00 $15.09
$16.30
=============================================
=============
=======
TOTAL RETURN, AT NET ASSET VALUE(2) 2.24%
(5.72)%
70.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $360,979 $297,842
$96,425
Average net assets (in thousands) $332,336 $214,545
$31,696
Ratios to average net assets:
Net investment income .86% .54%
.72%
Expenses .89% .91%
.92%
Portfolio turnover rate(4) 131.3% 70.4%
65.1%
Average brokerage commission rate(5) $0.01 --
--
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
1992 1991 1990(1)
- -----------------------------------------------------------------
<S> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.38 $10.04
$10.00
Income (loss) from investment operations:
Net investment income .07 .04
- --
Net realized and unrealized gain (loss) on investments
and foreign currency transactions (.80) .30
.04
- ---------------------------------------------------------------
Total income (loss) from investment operations (.73) .34
.04
- ---------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.04) --
--
Distributions from net realized gain on investments and
foreign currency transactions (.04) --
- --
- ---------------------------------------------------------------
Total dividends and distributions to shareholders (.08) --
--
- ---------------------------------------------------------------
Net asset value, end of period $9.57 $10.38
$10.04
=============================================
=============
=====
TOTAL RETURN, AT NET ASSET VALUE(2) (7.11)%
3.39% .40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $13,537 $7,339
$ 432
Average net assets (in thousands) $11,181 $3,990
$ 263
Ratios to average net assets:
Net investment income 1.04% .75%
.08%(3)
Expenses 1.06% 1.32%
6.84%(3)
Portfolio turnover rate(4) 34.1% 29.5%
0.0%
Average brokerage commission rate(5) -- --
--
</TABLE>
1. For the period from November 12, 1990 (commencement of operations) to
December 31, 1990.
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Strategic Bond
Fund
--------------------------------------------------------
Year Ended
December 31,
1995 1994 1993(1)
--------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $4.60 $5.12 $5.00
Income (loss) from investment operations:
Net investment income .38 .35 .10
Net realized and unrealized gain (loss) on investments,
options written and foreign currency transactions .30 (.54) .11
--------------------------------------------------------
Total income (loss) from investment operations .68 (.19) .21
--------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.37) (.32) (.09)
Distributions from net realized gain on investments -- -- --
Distributions in excess of net realized gain on investments,
options written and foreign currency transactions -- (.01) --
--------------------------------------------------------
Total dividends and distributions to shareholders (.37) (.33) (.09)
--------------------------------------------------------
Net asset value, end of period $4.91 $4.60 $5.12
=============================================
===========
TOTAL RETURN, AT NET ASSET VALUE(2) 15.33%
(3.78)% 4.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $60,098 $20,320 $9,887
Average net assets (in thousands) $37,698 $15,389 $4,259
Ratios to average net assets:
Net investment income 9.32% 8.36%
5.67%(3)
Expenses .85% .87% .96%(3)
Portfolio turnover rate(4) 87.0% 136.6% 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 in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 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>
Oppenheimer Variable Account Funds
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Oppenheimer
Growth & Income
Fund
---------------
Year Ended
December 31,
1995(1)
---------
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.00
Income (loss) from investment operations:
Net investment income .01
Net realized and unrealized gain (loss) on investments,
options written and foreign currency transactions 2.52
---------
Total income (loss) from investment operations 2.53
---------
Dividends and distributions to shareholders:
Dividends from net investment income (.02)
Distributions from net realized gain on investments --
Distributions in excess of net realized gain on investments,
options written and foreign currency transactions --
---------
Total dividends and distributions to shareholders (.02)
---------
Net asset value, end of period $12.51
=========
TOTAL RETURN, AT NET ASSET VALUE(2) 25.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $4,288
Average net assets (in thousands) $1,809
Ratios to average net assets:
Net investment income 0.50%(3)
Expenses 2.07%(3)
Portfolio turnover rate(4) 23.7%
Average brokerage commission rate(5) $0.34
</TABLE>
1. For the period from July 5, 1995 (commencement of operations) to
December 31, 1995
2. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Total returns are not annualized for periods of less than one full
year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of
these charges would reduce the total return figures for all periods shown.
3. 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 the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
5. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements
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), Oppenheimer
Strategic Bond Fund (OSBF) and Oppenheimer Growth & Income Fund (OGIF)
(collectively, the Funds) are separate series 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 advisor is OppenheimerFunds, Inc. (the
Manager). The following is a summary of significant accounting
policies consistently followed by the Funds.
The Funds' objectives are as follows:
Oppenheimer Money Fund seeks the maximum current income from investments
in "money market" securities consistent with low capital risk and
the maintenance of liquidity.
Oppenheimer High Income Fund seeks a high level of current income
from investments in high yield fixed-income securities.
Oppenheimer Bond Fund primarily seeks a high level of current income
from investments 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 seeks to achieve capital
appreciation by investing in "growth-type" companies.
Oppenheimer Growth Fund seeks to achieve capital appreciation by investing
in securities of well-known established companies.
Oppenheimer 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 seeks long-term capital appreciation
by investing a substantial portion of assets in securities of foreign
issuers, "growth-type" companies, cyclical industries and special
institutions which are considered to have appreciation possibilities.
Oppenheimer 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: (i) debt
securities, (ii) U.S. Government securities, and (iii) lower-rated
high yield domestic debt securities.
Oppenheimer Growth & Income Fund seeks a high total return (which
includes growth in the value of its shares as well as current income)
from equity and debt securities. From time to time this Fund may focus
on small to medium capitalization common stocks, bonds and convertible
securities.
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, OSBF and OGIF are valued at the close of the
New York Stock Exchange on each trading day. Listed and unlisted
securities for which such information is regularly reported are valued
at the last sale price of the day or, in the absence of sales, at values
based on the closing bid or asked price or the last sale price on the
prior trading day. Long-term and short-term "non-money market" debt
securities are valued by a portfolio pricing service approved by the
Board of Trustees. Such securities which cannot be valued by the
approved portfolio pricing service are valued using dealer-supplied
valuations provided the Manager is satisfied that the firm rendering the
quotes is reliable and that the quotes reflect current market value, or
are valued under consistently applied procedures established by the Board
of Trustees to determine fair value in good faith. Short-term "money
market type" debt securities having a remaining maturity of 60 days or
less are valued at cost (or last determined market value) adjusted for
amortization to maturity of any premium or discount. Options are valued
based upon the last sale 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
exchange contracts are valued based on the closing prices of the forward
currency contract rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer.
Securities Purchased on a When-Issued Basis.
Delivery and payment for securities that have been purchased by OSBF
on a forward commitment or when-issued basis can take place a month or
more after the transaction date. During the period, such securities
do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. OSBF maintains,
in a segregated account with its custodian, assets with a market value
equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase
the volatility of OSBF's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested.
In connection with its ability to purchase securities on a when-issued
or forward commitment basis, OSBF may enter into mortgage "dollar-rolls"
in which the Fund sells securities for delivery in the current
month and simultaneously contracts with the same counterparty to
repurchase similar (same type, coupon and maturity) but not identical
securities on a specified future date. The Fund records each dollar-roll
as a sale and a new purchase transaction.
Security Credit Risk.
OHIF, OMSF and OSBF invest 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 Funds may acquire securities in default, and are not obligated to
dispose of securities whose issuers subsequently default. At December 31,
1995, securities with an aggregate market value of $491,444 for
OHIF and $67,873 for OSBF, representing 0.37% and 0.11% respectively,
of the Funds' net 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, OMSF, OGSF, OSBF and OGIF
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.
For OHIF, OBF, OMSF, OGSF, OSBF and OGIF, the effect of changes in foreign
currency exchange rates on investments is separately identified from the
fluctuations arising from changes in market values of securities held
and reported with all other foreign currency gains and losses in the
Funds' Statements of Operations.
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. The market value of the underlying securities
is required to be at least 102% of the resale price at the time of
purchase. If the seller of the agreement defaults and the value of the
collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Funds may be delayed or
limited.
Federal 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 or excise tax provision is required. At December 31,
1995, the following Funds had available for federal income tax purposes
unused capital loss carryovers expiring in 2002 and 2003:
OHIF -- $ 3,033,760
OGSF -- $17,569,501
OSBF -- $ 1,609,951
Distributions to Shareholders.
Dividends and distributions to shareholders of OHIF, OBF, OCAP, OGF,
OMSF, OGSF, OSBF and OGIF are recorded on the ex-dividend date. OMF
intends to declare dividends from net investment income each day the
New York Stock Exchange is open for business 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.
Classification of Distributions to Shareholders.
Net investment income (loss) and net realized gain (loss) may differ
for financial statement and tax purposes primarily because of
premium amortization, paydown gains and losses and the recognition of
certain foreign currency gains (losses) as ordinary income (loss) for
tax purposes. The character of the distributions made during the
year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also,
due to timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or
realized gain (loss) was recorded by the Funds. Changes in
classification made during the fiscal year ended December 31, 1995 are
shown below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Adjustments for the Fiscal Year Ended December 31,
1995
- -----------------------------------------------------------------------------------
Undistributed Net
Investment Income Undistributed Net Realized
Paid-in
(Loss) Gain (Loss) on Investments
Capital
<S> <C> <C>
<C>
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer High Income Fund 186,751 (186,751)
--
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer Bond Fund (1,093,371) 1,093,371
--
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer Capital Appreciation Fund -- --
--
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer Growth Fund -- --
--
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer Multiple Strategies Fund (204,481) 204,481
--
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer Global Securities Fund (2,845,512) 6,264,762
(3,419,250)
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer Strategic Bond Fund 9,220 (9,220)
--
- -------------------------------------------------------------------------------------------------------------------------
- -------
Oppenheimer Growth & Income Fund 37 (37)
--
- -------------------------------------------------------------------------------------------------------------------------
- -------
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
1. Significant Accounting Policies (Continued)
Other.
Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend income is recorded
on the ex-dividend date. Discount on securities purchased by OHIF, OBF,
OCAP, OGF, OMSF, OGSF, OSBF and OGIF 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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities of the date of the
financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
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
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 202,748,102 $202,748,102 175,917,558 $175,917,558
Dividends and
distributions
reinvested 4,222,747 4,222,747 3,640,684 3,640,684
Redeemed (231,260,663) (231,260,663) (151,084,269) (151,084,269)
-------------------------------------------------------------
Net increase
(decrease) (24,289,814) $(24,289,814) 28,473,973 $ 28,473,973
=============================================
=============
===
Oppenheimer High Income Fund
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
Sold 5,873,231 $60,932,670 9,936,582 $ 81,477,904
Dividends and
distributions
reinvested 1,162,957 12,040,152 841,101 8,686,931
Redeemed (4,263,757) (44,560,679) (9,441,490) (75,726,156)
-------------------------------------------------------------
Net increase
(decrease) 2,772,431 $28,412,143 1,336,193 $ 14,438,679
=============================================
=============
===
Oppenheimer Bond Fund
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
Sold 7,311,733 $83,544,442 5,002,623 $56,466,171
Dividends and
distributions
reinvested 976,291 11,209,883 666,678 7,384,654
Redeemed (2,972,687) (33,822,108) (2,744,016) (30,950,944)
-------------------------------------------------------------
Net increase 5,315,337 $60,932,217 2,925,285 $32,899,881
=============================================
=============
===
Oppenheimer Capital Appreciation Fund
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
Sold 8,882,212 $260,650,476 7,912,557 $173,453,586
Dividends and
distributions
reinvested 40,594 1,082,642 614,575 17,331,023
Redeemed (6,567,729) (191,565,283) (5,695,411) (114,272,197)
-------------------------------------------------------------
Net increase 2,355,077 $70,167,835 2,831,721 $ 76,512,412
=============================================
=============
===
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
2. Shares of Beneficial Interest (Continued)
<TABLE>
<CAPTION>
Oppenheimer Growth Fund
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 4,302,304 $89,007,340 2,577,268 $45,230,951
Dividends and
distributions
reinvested 95,991 1,795,026 36,305 644,411
Redeemed (2,980,080) (60,949,490) (2,236,767) (38,999,875)
----------------------------------------------------------
Net increase 1,418,215 $29,852,876 376,806 $ 6,875,487
=============================================
=============
===
Oppenheimer Multiple Strategies Fund
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
Sold 6,445,242 $88,771,497 9,807,084 $84,443,396
Dividends and
distributions
reinvested 1,818,313 24,783,721 1,140,244 14,981,165
Redeemed (4,671,097) (64,421,131) (6,353,523) (37,006,732)
-------------------------------------------------------------
Net increase 3,592,458 $49,134,087 4,593,805 $62,417,829
=============================================
=============
===
Oppenheimer Global Securities Fund
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
Sold 11,235,722 $166,766,446 22,151,454 $336,310,887
Dividends and
distributions
reinvested 585,961 8,174,158 178,687 2,801,813
Redeemed (7,497,205) (112,360,172) (8,503,911) (112,426,012)
-------------------------------------------------------------
Net increase 4,324,478 $62,580,432 13,826,230 $226,686,688
=============================================
=============
===
Oppenheimer Strategic Bond Fund
-------------------------------------------------------------
Year Ended Year Ended
December 31, 1995 December 31, 1994
-------------------------------------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------
Sold 9,417,090 $44,897,472 3,749,500 $18,415,292
Dividends and
distributions
reinvested 661,301 3,151,540 247,485 1,178,372
Redeemed (2,245,623) (10,642,846) (1,508,782) (7,350,665)
-------------------------------------------------------------
Net increase 7,832,768 $37,406,166 2,488,203 $12,242,999
=============================================
=============
===
</TABLE>
89
<PAGE>
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
2. Shares of Beneficial Interest (Continued)
<TABLE>
<CAPTION>
Oppenheimer Growth &
Income Fund
-------------------------------------------
Year Ended
December 31, 1995(1)
-------------------------------------------
Shares Amount
-------------------------------------------
<S> <C> <C>
Sold 358,253 $3,933,459
Dividends and
distributions
reinvested 404 4,928
Redeemed (15,863) (181,994)
-------------------------------------------
Net increase 342,794 $3,756,393
============================================
</TABLE>
1. For the period from July 5, 1995 (commencement of operations) to
December 31, 1995.
<PAGE>
3. Unrealized Gains and Losses on Investments and Options Written
At December 31, 1995, net unrealized appreciation or depreciation
on investments and options written consisted of the following:
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Oppenheimer Oppenheimer
Oppenheimer Oppenheimer Capital Oppenheimer Multiple Global
Strategic Growth &
High Income Bond Appreciation Growth Strategies Securities
Bond Income
Fund Fund Fund Fund Fund Fund
Fund Fund
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross appreciation $7,814,322 $9,892,102 $70,829,161 $25,616,239 $53,305,284
$37,997,341 $2,340,864
$599,103
Gross depreciation (2,103,465) (1,054,488) (7,853,814) (1,998,316) (11,146,651)
(14,351,638) (493,040) (94,247)
- -------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation $5,710,857 $8,837,614 $62,975,347 $23,617,923 $42,158,633
$23,645,703 $1,847,824
$504,856
=============================================
=============
=============================================
======
Purchases and sales of investment securities (excluding short-term securities) for the year ended
December 31, 1995
were as follows:
Purchases $145,095,379 $196,515,342 $318,974,082 $78,667,711 $123,862,840
$491,709,775 $67,228,738
$3,421,021
=============================================
=============
=============================================
======
Sales $112,222,617 $120,210,417 $255,116,481 $41,669,055 $117,669,946
$416,155,747 $26,588,452
$400,564
=============================================
=============
=============================================
======
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
4. Option Activity
The Funds (except OMF, OCAP and OGF) may buy and sell put and call
options, or write covered put and call options on portfolio securities
in order to produce incremental earnings or protect against changes
in the value of portfolio securities.
The Funds generally purchase put options or write covered call options
to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become
obligated to sell or purchase the underlying security at a fixed price,
upon exercise of the option.
Options are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized
appreciation or depreciation is recorded. The Funds will realize
a gain or loss upon the expiration or closing of the option transaction.
When an option is exercised, the proceeds on sales for a written call
option, the purchase cost for a written put option, or the cost of the
security for a purchased put or call option is adjusted by the amount
of premium received or paid.
Securities designated to cover outstanding call options are noted
in the Statements of Investments where applicable. Shares subject to
call, expiration date, exercise price, premium received and market
value are detailed in a footnote to the Statement of Investments.
Options written are reported as a liability in the Statement of Assets
and Liabilities. Gains and losses are reported in the Statement of
Operations.
The risk in writing a call option is that the Funds give up the
opportunity for profit if the market price of the security increases
and the option is exercised. The risk in writing a put option is that
the Funds may incur a loss if the market price of the security decreases
and the option is exercised. The risk in buying an option is that the
Funds pay a premium whether or not the option is exercised. The Funds
also have the additional risk of not being able to enter into a closing
transaction if a liquid secondary market does not exist. The Funds may
also write over-the-counter options where the completion of the
obligation is dependent upon the credit standing of the counterparty.
OHIF option activity for the year ended December 31, 1995 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
---------------------------
Number of Amount of
Options Premiums
---------------------------
<S> <C> <C>
Options outstanding at December 31, 1994 -- $ --
Options written 28,600 5,389
Options canceled in closing transactions (28,500) (3,959)
---------------------------
Options outstanding at December 31, 1995 100 $ 1,430
===========================
</TABLE>
OBF option activity for the year ended December 31, 1995 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
---------------------------
Number of Amount of
Options Premiums
---------------------------
<S> <C> <C>
Options outstanding at December 31, 1994 -- $ --
Options written 82,000 17,019
Options canceled in closing transactions (82,000 (17,019)
---------------------------
Options outstanding at December 31, 1995 -- $ --
===========================
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
4. Option Activity (Continued)
OMSF option activity for the year ended December 31, 1995 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
---------------------------
Number of Amount of
Options Premiums
---------------------------
<S> <C> <C>
Options outstanding at December 31, 1994 2,255 $ 607,682
Options written 8,275 2,150,503
Options canceled in closing transactions (1,894) (448,093)
Options expired prior to exercise (2,353) (451,021)
Options exercised (2,680) (758,976)
---------------------------
Options outstanding at December 31, 1995 3,603 $1,100,095
===========================
</TABLE>
OSBF option activity for the year ended December 31, 1995 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
---------------------------
Number of Amount of
Options Premiums
---------------------------
<S> <C> <C>
Options outstanding at December 31, 1994 307 $ 1,600
Options written 3,314 35,871
Options canceled in closing transactions (2,141) (20,467)
Options expired prior to exercise (190) (763)
Options exercised (290) (1,942)
---------------------------
Options outstanding at December 31, 1995 1,000 $ 14,299
===========================
</TABLE>
5. Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (forward contract) is a
commitment to purchase or sell a foreign currency at a future date, at a
negotiated rate.
The Funds (except OMF) use forward contracts to seek to manage foreign
currency risks. They may also be used to tactically shift portfolio
currency risk. The Funds generally enter into forward contracts as a
hedge upon the purchase or sale of a security denominated in a foreign
currency. In addition, the Funds may enter into such contracts as a
hedge against changes in foreign currency exchange rates on portfolio
positions.
Forward contracts are valued based on the closing prices of the forward
currency contract rates in the London foreign exchange markets on
a daily basis as provided by a reliable bank or dealer. The Funds will
realize a gain or loss upon the closing or settlement of the forward
transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statements of Investments
where applicable. Unrealized appreciation or depreciation on forward
contracts is reported in the Statements of Assets and Liabilities.
Realized gains and losses are reported with all other foreign currency
gains and losses in the Funds' Statements of Operations.
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
5. Forward Foreign Currency Exchange Contracts (Continued)
Risks include the potential inability of the counterparty to meet the
terms of the contract and unanticipated movements in the value of a
foreign currency relative to the U.S. dollar.
At December 31, 1995, outstanding forward contracts to purchase and sell
foreign currencies were as follows:
Oppenheimer High Income Fund
<TABLE>
<CAPTION>
Contract Unrealized
Amount Valuation as of Appreciation
Contracts to Purchase Exchange Date (in 000s) December 31, 1995 (Depreciation)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Japanese Yen (JPY) 1/4/96 55,250 JPY $535,752 $ (9,657)
New Zealand Dollar (NZD) 12/18/96 892 NZD 567,334 2,150
--------
$ (7,507)
--------
Contracts to Sell
- ------------------------------------------------------------------------------------------------------
Deutsche Mark (DEM) 1/4/96-2/21/96 3,670 DEM $2,562,764 $ (3,622)
Japanese Yen (JPY) 12/18/96 54,625 JPY 553,249 11,934
--------
8,312
--------
Net Unrealized Appreciation $ 805
========
</TABLE>
Oppenheimer Bond Fund
<TABLE>
<Captaion>
Contract Unrealized
Amount Valuation as of Appreciation
Contracts to Sell Exchange Date (in 000s) December 31, 1995 (Depreciation)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Australian Dollar (AUD) 1/4/96 59 AUD $43,775 $ 190
Deutsche Mark (DEM) 1/4/96-2/21/96 11 DEM 7,661,169 (15,712)
--------
$(15,522)
========
</TABLE>
Oppenheimer Multiple Strategies Fund
<TABLE>
<CAPTION>
Contract Unrealized
Amount Valuation as of Appreciation
Contracts to Sell Exchange Date (in 000s) December 31, 1995 (Depreciation)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hong Kong Dollar (HKD) 1/2/96 707 HKD $91,439 $ 2
========
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
5. Forward Foreign Currency Exchange Contracts (Continued)
Oppenheimer Global Securities Fund
<TABLE>
<CAPTION>
Contract Unrealized
Amount Valuation as of Appreciation
Contracts to Purchase Exchange Date (in 000s) December 31, 1995 (Depreciation)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hong Kong Dollar (HKD) 1/2/96-1/3/96 8,904 HKD $1,151,601 $ (218)
Italian Lira (ITL) 1/31/96 3,888,129 ITL 2,438,922 (9,912)
Japanese Yen (JPY) 1/4/96-1/5/96 75,155 JPY 728,792 (2,948)
Singapore Dollar (SGD) 1/2/96-1/5/96 830 SGD 586,556 (853)
Greek Drachma (GRD) 1/2/96-1/4/96 49,496 GRD 209,220 432
--------
$(13,499)
--------
Contracts to Sell
- ------------------------------------------------------------------------------------------------------
Austrian Schilling (ATS) 1/2/96 17,770 ATS $1,764,559 $(12,653)
Swiss Franc (CHF) 1/4/96 279 CHF 242,200 (1,139)
Deutsche Mark (DEM) 1/4/96 1,598 DEM 1,116,140 (5,709)
Japanese Yen (JPY) 3/29/96 3,043,800 JPY 29,807,684 192,316
Norwegian Krone (NOK) 1/2/96-1/4/96 8,521 NOK 1,348,728 (9,042)
---------
163,773
---------
Net Unrealized Appreciation $150,274
=========
</TABLE>
Oppenheimer Strategic Bond Fund
<TABLE>
<CAPTION>
Contract Unrealized
Amount Valuation as of Appreciation
Contracts to Purchase Exchange Date (in 000s) December 31, 1995 (Depreciation)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Japanese Yen (JPY) 1/4/96 33,988 JPY $329,572 $(5,982)
New Zealand Dollar (NZD) 12/18/96 541 NZD 344,380 1,096
-------
$(4,886)
-------
Contracts to Sell
- ------------------------------------------------------------------------------------------------------
Australian Dollar (AUD) 1/4/96 22 AUD $16,134 $ (25)
Deutsche Mark (DEM) 2/13/96 1,605 DEM 1,119,976 (5,393)
Japanese Yen (JPY) 12/18/96 33,175 JPY 336,001 7,283
Swiss Franc (CHF) 2/13/96 860 CHF 748,739 (8,636)
--------
(6,771)
--------
Net Unrealized Depreciation $(11,657)
========
</TABLE>
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
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. For OBF, OCAP, OGF, OMSF, OHIF, OGSF, OSBF and
OGIF, the annual fees are .75% of the first $200 million of net assets,
.72% of the next $200 million, .69% of the next $200 million, .66% of
the next $200 million and .60% of net assets in excess of $800
million. In addition, management fees for OHIF, OBF and OSBF are .50%
of net assets in excess of $1 billion. Management fees for OMF are .45%
of the first $500 million, .425% of the next $500 million, .40% of the
next $500 million and .375% of net assets in excess of $1.5 billion. For
OSBF, the Manager has agreed to limit the management fee charged so that
the ordinary operating expenses of the Fund will not exceed 1.0% of its
average net assets in any fiscal year.
7. Illiquid and Restricted Securities
At December 31, 1995, investments in securities included issues
that are illiquid or restricted. The securities are often purchased in
private placement transactions, are not registered under the
Securities Act of 1933, may have contractual restrictions on resale, and
are valued under methods approved by the Board of Trustees as reflecting
fair value. The Funds intend to invest no more than 10% of net assets
(determined at the time of purchase) in illiquid and restricted
securities. Information concerning these securities is as follows:
Oppenheimer High Income Fund
<TABLE>
<CAPTION>
Acquisition Cost Valuation as of
Security Date Per Unit December 31,
1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ames Department Stores, Inc., Excess Cash Flow Payment 12/30/92 $ 0.00
$ .01
Certificates, Series AG-7A
Ames Department Stores, Inc., Litigation Trust 12/30/92 0.00
.01
Colombia (Republic of) 1989-1990 Integrated Loan Facility 12/5/95 92.00
93.00
Bonds, 6.875%, 7/1/01
ECM Fund, L.P.I 4/14/92 100.00 1,000.00
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 4/14/92 100.00
110.00
Farley, Inc., Zero Coupon Sub. Debs., 14.151%, 12/30/12 1/1/93-3/6/95 7.44
9.88
Gillett Holdings, Inc., C1.2 12/1/92 10.50 20.00
Goldman, Sachs & Co., Argentina Local Market Securities 8/24/94 100.00
97.75
Trust, 11.30%, 4/1/00
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96 9/14/95 100.00
100.75
Triangle Wire & Cable, Inc. 5/2/94 9.50 1.00
Trinidad & Tobago Loan Participation Agreement, Tranche B, 12/13/95 .84
.82
1.563%, 9/30/00
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The aggregate value of illiquid and restricted securities subject to
the 10% limitation at December 31, 1995 was $3,708,444 or 2.78% of
the Fund's net assets. Pursuant to guidelines adopted by the Board
of Trustees, certain unregistered securities are determined to be
liquid and are not included within the 10% limitation specified above.
<PAGE>
Oppenheimer Variable Account Funds
Notes to Financial Statements (Continued)
7. Illiquid and Restricted Securities (Continued)
Oppenheimer Bond Fund
<TABLE>
<CAPTION>
Acquisition Cost Valuation as of
Security Date Per Unit December 31,
1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Colombia (Republic of) 1989-1990 Integrated Loan 12/5/95 $ 92.00 $
93.00
Facility Bonds, 6.875%, 7/1/01
Merrill Lynch & Co., Inc. 5/15/95 110.05 115.10
Units, 9.75% 6/15/99
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The aggregate value of illiquid and restricted securities subject to
the 10% limitation at December 31, 1995 was $2,745,392 or 1.30% of
the Fund's net assets. Pursuant to guidelines adopted by the Board
of Trustees, certain unregistered securities are determined to be
liquid and are not included within the 10% limitation specified above.
Oppenheimer Multiple Strategies Fund
<TABLE>
<CAPTION>
Acquisition Cost Valuation as of
Security Date Per Unit December 31,
1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Santa Anita Realty Enterprises, Inc., Units 5/28/93-2/9/95 $16.99
$11.88
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The aggregate value of illiquid and restricted securities subject to
the 10% limitation at December 31, 1995 was $475,000 or 0.12% of the
Fund's net assets.
Pursuant to guidelines adopted by the Board of Trustees, certain
unregistered securities are determined to be liquid and are not
included within the 10% limitation specified above.
Oppenheimer Global Securities Fund
<TABLE>
<CAPTION>
Acquisition Cost Valuation as of
Security Date Per Unit December 31,
1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Plant Genetics Systems 5/27/92-3/7/95 $13.77 $11.91
Plant Genetics, Inc. Wts., Exp. 12/99 3/7/95 0.00 1.99
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The aggregate value of illiquid and restricted securities subject to
the 10% limitation at December 31, 1995, was $1,180,542, or 0.33% of
the Fund's net assets. Pursuant to the guidelines adopted by the Board
of Trustees, certain unregistered securities are determined to be liquid
and are not included within the 10% limitation specified above.
Oppenheimer Strategic Bond Fund
<TABLE>
<CAPTION>
Acquisition Cost Valuation as of
Security Date Per Unit December 31,
1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Colombia (Republic of) 1989-1990 Integrated Loan 12/5/95 $ 92.00
$ 93.00
Facility Bonds, 6.875%, 7/1/01
Goldman, Sachs & Co., Argentina Local Market Securities 8/24/94 100.00
97.75
Trust, 11.30%, 4/1/00
Jamaica (Government of) 1990 Refinancing Agreement 8/15/95 89.75
90.00
Nts., Tranche A, 6.75%, 10/16/00
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96 9/15/95 100.00
100.75
Trinidad & Tobago Loan Participation Agreement,
Tranche A, 1.563%, 9/30/00 12/13/95-12/18/95 .84
.82
United Mexican States, Combined Facility 3, Loan 10/25/94 89.00
75.75
Participation Agreement, Tranche A, 6.50%, 9/20/97
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The aggregate value of illiquid and restricted securities subject to
the 10% limitation at December 31, 1995, was $1,221,735, or 2.03% of
the Fund's net assets. Pursuant to the guidelines adopted by the Board
of Trustees, certain unregistered securities are determined to be liquid
and are not included within the 10% limitation specified above.
<PAGE>
Appendix A
Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
<PAGE>
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202-4918
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
1. Financial Highlights (see Parts A and B): Filed herewith.
2. Independent Auditors' Report (see Part B): Filed herewith.
3. Statements of Investments (see Part B): Filed herewith.
4. Statements of Assets and Liabilities (see Part B): Filed
herewith.
5. Statements of Operations (see Part B): Filed herewith.
6. Statements of Changes in Net Assets (see Part B): Filed
herewith.
7. Notes to Financial Statements (see Part B): Filed herewith.
8. Independent Auditors' Consent: Filed herewith.
(b) Exhibits
--------
1. Sixth Restated Declaration of Trust dated February 28,
1995: Filed with Registrant's Post-Effective Amendment No. 27, 4/27/95,
and incorporated herein by reference.
2. By-Laws, amended as of 6/26/90: Previously filed with
Registrant's Post-Effective Amendment No. 26, 2/13/95, and
incorporated herein by reference.
3. Not Applicable.
4. (i) Oppenheimer Money Fund specimen share certificate:
Filed with Registrant's Post-Effective Amendment No.
25, 4/29/94, and incorporated herein by reference.
(ii) Oppenheimer Bond Fund specimen share certificate:
Filed with Registrant's Post-Effective Amendment No.
25, 4/29/94, and incorporated herein by reference..
(iii) Oppenheimer Growth Fund specimen share certificate:
Filed with Registrant's Post-Effective Amendment No.
25, 4/29/94, and incorporated herein by reference.
(iv) Oppenheimer High Income Fund specimen share
certificate: Filed with Registrant's Post-Effective
Amendment No. 25, 4/29/94, and incorporated herein by
reference.
(v) Oppenheimer Capital Appreciation Fund specimen share
certificate: Filed with Registrant's Post-Effective
Amendment No. 25, 4/29/94, and incorporated herein by
reference.
(vi) Oppenheimer Multiple Strategies Fund specimen share
certificate: Filed with Registrant's Post-Effective
Amendment No. 25, 4/29/94, and incorporated herein by
reference.
(vii) Oppenheimer Global Securities Fund specimen share
certificate: Filed with Registrant's Post-Effective
Amendment No. 25, 4/29/94, and incorporated herein by
reference.
(viii) Oppenheimer Strategic Bond Fund specimen share
certificate: Filed with Registrant's Post-Effective
Amendment No. 25, 4/29/94, and incorporated herein by
reference.
(ix) Oppenheimer Growth & Income Fund specimen share
certificate: Filed with Registrant's Post-Effective
Amendment No. 27, 4/27/95, and incorporated herein by
reference.
5. (i) Investment Advisory Agreement for Oppenheimer Money
Fund dated 9/1/94: Filed with Post-Effective Amendment
No. 26, 2/13/95, and incorporated herein by reference.
(ii) Investment Advisory Agreement for Oppenheimer High
Income Fund dated 9/1/94: Filed with Post-Effective
Amendment No. 26, 2/13/95, and incorporated herein by
reference.
(iii) Investment Advisory Agreement for Oppenheimer Bond
Fund dated 9/1/94: Filed with Post-Effective Amendment
No. 26, 2/13/95, and incorporated herein by reference.
(iv) Investment Advisory Agreement for Oppenheimer Capital
Appreciation Fund STGT 9/1/94: Filed with Post-
Effective Amendment No. 26, 2/13/95, and incorporated
herein by reference.
(v) Investment Advisory Agreement for Oppenheimer Growth
Fund dated 9/1/94: Filed with Post-Effective Amendment
No. 26, 2/13/95, and incorporated herein by reference.
(vi) Investment Advisory Agreement for Oppenheimer Multiple
Strategies Fund dated 9/1/94: Filed with Post-Effective
Amendment No. 26, 2/13/95, and incorporated herein by
reference.
(vii) Investment Advisory Agreement for Oppenheimer Global
Securities Fund dated 9/1/94: Filed with Post-
Effective Amendment No. 26, 2/13/95, and incorporated
herein by reference.
(viii) Investment Advisory Agreement for Oppenheimer
Strategic Bond Fund dated 9/1/94: Filed with Post-
Effective Amendment No. 26, 2/13/95, and incorporated
herein by reference.
(ix) Investment Advisory Agreement for Oppenheimer Growth
& Income Fund dated 5/1/95: Filed herewith.
6. Not Applicable.
7. Not Applicable.
8. Custody Agreement between Oppenheimer Variable Account
Funds and The Bank of New York, dated 11/12/92:
Previously filed with Registrant's Post-Effective
Amendment No. 21, 3/12/93, refiled with Registrant's
Post-Effective Amendment No. 27, 4/27/95 pursuant to
Item 102 of Regulation S-T, and incorporated herein by reference.
9. Not Applicable.
10. (i) Opinion and Consent of Counsel, 3/14/85:
Previously filed with Registrant's Pre-Effective Amendment No. 1,
3/20/85, refiled with Registrant's Post-Effective Amendment No. 27,
4/27/95 pursuant to Item 102 of Regulation S-T, and incorporated herein
by reference.
(ii) Opinion and Consent of Counsel, 4/28/86: Previously filed with
Registrant's Post-Effective Amendment No. 5, 8/12/86, refiled with
Registrant's Post-Effective Amendment No. 27, 4/27/95 pursuant to
Item 102 of Regulation S-T, and incorporated herein by reference.
(iii) Opinion and Consent of Counsel, 7/31/86:
Previously filed with Registrant's Post-Effective
Amendment No. 5, 8/12/86, refiled with Registrant's Post-Effective
Amendment No. 27, 4/27/95 pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(iv) Opinion and Consent of Counsel, 1/21/87: Previously filed with
Registrant's Post-Effective Amendment No. 7, 2/6/87, refiled with
Registrant's Post-Effective Amendment No. 27, 4/27/95, pursuant to Item
102 of Regulation S-T, and incorporated herein by reference.
(v) Opinion and Consent of Counsel, dated July 31, 1990: Previously
filed with Registrant's Post-Effective Amendment No. 15, 9/19/90,
refiled with Registrant's Post-Effective Amendment No. 27, 4/27/95
pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.
(vi) Opinion and Consent of Counsel dated April 23, 1993: Previously
filed with Registrant's Post-Effective Amendment No. 22, 4/30/93,
refiled with Registrant's Post-Effective Amendment No. 27, 4/27/95
pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.
(vii) Opinion and Consent of Counsel dated April 18, 1995: Filed
herewith.
11. Not Applicable.
12. Not Applicable.
13. Not Applicable.
14. Not Applicable.
15. Not Applicable.
16. Performance Data Computation Schedules: Filed
herewith.
17. Financial Data Schedules: Filed herewith.
-- Powers of Attorney: Filed herewith (Bridget A.
Macaskill; others filed with Registrant's Post-
Effective Amendment No. 24, 2/25/94, and incorporated
herein by reference.
18. Not applicable
Item 25. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
Registrant does not control any other person. Except that all of
Registrant's issued and outstanding shares are held by certain separate
accounts, as described in Part B of this Registration Statement,
Registrant is not under common control with any other person.
Item 26. Number of Holders of Securities
No. of Record
Holders as of
Title of Class (Series) March 31, 1996
----------------------- --------------
Oppenheimer Money Fund 5
Oppenheimer High Income Fund 6
Oppenheimer Bond Fund 6
Oppenheimer Capital Appreciation Fund 6
Oppenheimer Growth Fund 6
Oppenheimer Multiple Strategies Fund 6
Oppenheimer Global Securities Fund 5
Oppenheimer Strategic Bond Fund 3
Oppenheimer Growth & Income Fund 1
Item 27. Indemnification
---------------
Reference is made to paragraphs (c) through (g) of Section 12 of
Article SEVENTH of Registrant's Fifth Restated Declaration of Trust
previously filed as an exhibit to this Registration Statement,
incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Registrant pursuant to the foregoing provisions
or otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a director, officer or
controlling person of Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication
of such issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(a) OppenheimerFunds, Inc. is the investment adviser of the
Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts
A and B hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which
each officer and director of OppenheimerFunds, Inc. is, or at any time
during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or
trustee.
<TABLE>
<CAPTION>
Name & Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- --------------------------- -------------------------------
<S> <C>
Mark Anson, Formerly Vice President of
Vice President Equity Derivatives at Salomon
Brothers, Inc.
Lawrence Apolito,
Vice President None.
Victor Babin,
Senior Vice President None.
Robert J. Bishop,
Assistant Vice President Treasurer of the Oppenheimer Funds
(listed below); previously a Fund
Controller for OppenheimerFunds,
Inc. (the "Manager").
Bruce Bartlett,
Vice President Vice President and Portfolio
Manager of Oppenheimer Total
Return Fund, Inc., Oppenheimer
Main Street Funds, Inc. and
Oppenheimer Variable Account
Funds; formerly a Vice President
and Senior Portfolio Manager at
First of America Investment Corp.
Susan Burton, None.
Assistant Vice President
George Bowen,
Senior Vice President & Treasurer Treasurer of the New York-based
Oppenheimer Funds; Vice President,
Secretary and Treasurer of the
Denver-based Oppenheimer Funds.
Vice President and Treasurer of
OppenheimerFunds Distributor, Inc.
(the "Distributor") and
HarbourView Asset Management
Corporation ("HarbourView"), an
investment adviser subsidiary of
the Manager; Senior Vice
President, Treasurer, Assistant
Secretary and a director of
Centennial Asset Management
Corporation ("Centennial"), an
investment adviser subsidiary of
the Manager; Vice President,
Treasurer and Secretary of
Shareholder Services, Inc. ("SSI")
and Shareholder Financial
Services, Inc. ("SFSI"), transfer
agent subsidiaries of the Manager;
President, Treasurer and Director
of Centennial Capital Corporation;
Vice President and Treasurer of
Main Street Advisers.
Michael A. Carbuto,
Vice President Vice President and Portfolio
Manager of Centennial California
Tax Exempt Trust, Centennial New
York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice
President of Centennial.
Ruxandra Chivu, None.
Assistant Vice President
Lynn Coluccy,
Vice President Formerly Vice President / Director
of Internal Audit of the Manager.
O. Leonard Darling,
Executive Vice President Formerly Co-Director of Fixed
Income for State Street Research &
Management Co.
Robert A. Densen,
Senior Vice President None.
Robert Doll, Jr.,
Executive Vice President Vice President and Portfolio
Manager of Oppenheimer Growth
Fund, Oppenheimer Variable Account
Funds; Senior Vice President and
Portfolio Manager of Oppenheimer
Strategic Income & Growth Fund;
Vice President of Oppenheimer
Quest Value Fund, Inc.,
Oppenheimer Quest Officers Value
Fund, Oppenheimer Quest For Value
Funds and Oppenheimer Quest Global
Value Fund, Inc.
John Doney,
Vice President Vice President and Portfolio
Manager of Oppenheimer Equity
Income Fund.
Andrew J. Donohue,
Executive Vice President
& General Counsel Secretary of the New York-based
Oppenheimer Funds; Vice President
of the Denver-based Oppenheimer
Funds; Executive Vice President,
Director and General Counsel of
the Distributor; President and a
Director of Cetennial; formerly
Senior Vice President and
Associate General Counsel of the
Manager and the Distributor.
George Evans,
Vice President Vice President and Portfolio
Manager of Oppenheimer Global
Emerging Growth Fund.
Scott Farrar,
Assistant Vice President Assistant Treasurer of the
Oppenheimer Funds; previously a
Fund Controller for the Manager.
Katherine P. Feld,
Vice President and Secretary Vice President and Secretary of
OppenheimerFunds Distributor,
Inc.; Secretary of HarbourView,
Main Street Advisers, Inc. and
Centennial; Secretary, Vice
President and Director of
Centennial Capital Corp.
Ronald H. Fielding,
Senior Vice President Chairman of the Board and Director
of Rochester Fund Distributors,
Inc. ("RFD"); President and
Director of Fielding Management
Company, Inc. ("FMC"); President
and Director of Rochester Capital
Advisors, Inc. ("RCAI"); President
and Director of Rochester Fund
Services, Inc. ("RFS"); President
and Director of Rochester Tax
Managed Fund, Inc.; Vice President
and Portfolio Manager of Rochester
Fund Municipals and Rochester
Portfolio Series - Limited Term
New York Municipal Fund.
Jon S. Fossel,
Chairman of the Board and Director Director of OAC, the Manager's
parent holding company; President,
CEO and a director of HarbourView;
a director of SSI and SFSI;
President, Director, Trustee, and
Managing General Partner of the
Denver-based Oppenheimer Funds;
President and Chairman of the
Board of Main Street Advisers,
Inc.; formerly Chief Executive
Officer of the Manager.
John Fortuna, None.
Assistant Vice President
Robert G. Galli,
Vice Chairman Trustee of the New York-based
Oppenheimer Funds; Vice President
and Counsel of OAC; formerly he
held the following positions: a
director of the Distributor, Vice
President and a director of
HarbourView and Centennial, a
director of SFSI and SSI, an
officer of other Oppenheimer Funds
and Executive Vice President &
General Counsel of the Manager and
the Distributor.
Linda Gardner,
Assistant Vice President None.
Ginger Gonzalez,
Vice President Formerly 1st Vice President /
Director of Creative Services for
Shearson Lehman Brothers.
Mildred Gottlieb,
Assistant Vice President Formerly served as a Strategy
Consultant for the Private Client
Division of Merrill Lynch.
Caryn Halbrecht,
Vice President Vice President and Portfolio
Manager of Oppenheimer Insured
Tax-Exempt Fund and Oppenheimer
Intermediate Tax Exempt Fund; an
officer of other Oppenheimer
Funds; formerly Vice President of
Fixed Income Portfolio Management
at Bankers Trust.
Barbara Hennigar,
President and Chief Executive
Officer of OppenheimerFunds
Services, a division of the Manager President and Director of SFSI.
Dorothy Hirshman, None.
Assistant Vice President
Alan Hoden,
Vice President None.
Merryl Hoffman,
Vice President None.
Scott T. Huebl,
Assistant Vice President None.
Jane Ingalls,
Assistant Vice President Formerly a Senior Associate with
Robinson, Lake/Sawyer Miller.
Bennett Inkeles,
Assistant Vice President Formerly employed by Doremus &
Company, an advertising agency.
Ronald Jamison, Formerly Vice President and
Vice President Associate General Counsel at
Prudential Securities, Inc.
Frank Jennings,
Vice President Portfolio Manager of Oppenheimer
Global Growth & Income Fund.
Formerly a Managing Director of
Global Equities at Paine Webber's
Mitchell Hutchins division.
Stephen Jobe,
Vice President None.
Heidi Kagan,
Assistant Vice President None.
Avram Kornberg,
Vice President Formerly a Vice President with
Bankers Trust.
Paul LaRocco,
Assistant Vice President Portfolio Manager of Oppenheimer
Variable Account Funds; Associate
Portfolio Manager of Oppenheimer
Discovery Fund. Formerly a
Securities Analyst for Columbus
Circle Investors.
Mitchell J. Lindauer,
Vice President None.
Loretta McCarthy,
Executive Vice President None.
Bridget Macaskill,
President, Chief Executive Officer
and Director President, Director and Trustee of
the New York-based and the Denver-
based Oppenheimer funds; President
and a Director of OAC, HarbourView
and Oppenheimer Partnership
Holdings, Inc.; Director of Main
Street Advisers, Inc.; Chairman
and Director of SSI.
Timothy Martin, Formerly Vice President, Mortgage
Assistant Vice President Trading, at S.N. Phelps & Co.,
Salomon Brothers, and Kidder
Peabody.
Sally Marzouk,
Vice President None.
Marilyn Miller,
Vice President Formerly a Director of marketing
for TransAmerica Fund Management
Company.
Robert J. Milnamow,
Vice President Vice President and Portfolio
Manager of Oppenheimer Main Street
Funds, Inc. Formerly a Portfolio
Manager with Phoenix Securities
Group.
Denis R. Molleur,
Vice President None.
Kenneth Nadler,
Vice President None.
David Negri,
Vice President Vice President and Portfolio
Manager of Oppenheimer Variable
Account Funds, Oppenheimer
Strategic Income Fund, Oppenheimer
Strategic Income & Growth Fund; an
officer of other Oppenheimer
Funds.
Barbara Niederbrach,
Assistant Vice President None.
Robert A. Nowaczyk,
Vice President None.
Robert E. Patterson,
Senior Vice President Vice President and Portfolio
Manager of Oppenheimer Main Street
Funds, Inc., Oppenheimer Multi-
State Tax-Exempt Trust,
Oppenheimer Tax-Exempt Fund,
Oppenheimer California Tax-Exempt
Fund, Oppenheimer New York Tax-
Exempt Fund and Oppenheimer Tax-
Free Bond Fund; Vice President of
The New York Tax-Exempt Income
Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income
Trust.
Tilghman G. Pitts III,
Executive Vice President
and Director Chairman and Director of the
Distributor.
Jane Putnam,
Vice President Associate Portfolio Manager of
Oppenheimer Growth Fund; Vice
President and Portfolio Manager of
Oppenheimer Target Fund and
Oppenheimer Variable Account
Funds. Formerly Senior Investment
Officer and Portfolio Manager with
Chemical Bank.
Russell Read,
Vice President Formerly an International Finance
Consultant for Dow Chemical.
Thomas Reedy,
Vice President Vice President of Oppenheimer
Multi-Sector Income Trust and
Oppenheimer Multi-Government
Trust; an officer of other
Oppenheimer Funds; formerly a
Securities Analyst for the
Manager.
David Robertson,
Vice President None.
Adam Rochlin,
Vice President Formerly a Product Manager for
Metropolitan Life Insurance
Company.
Michael S. Rosen
Vice President Vice President of RFS; President
and Director of RFD; Vice
President and Director of FMC;
Vice President and director of
RCAI; General Partner of RCA; Vice
President and Director of
Rochester Tax Managed Fund Inc.;
Vice President and Portfolio
Manager of Rochester Fund Series -
The Bond Fund For Growth.
David Rosenberg,
Vice President Vice President and Portfolio
Manager of Oppenheimer Limited-
Term Government Fund, Oppenheimer
U.S. Government Trust and
Oppenheimer Integrity Funds.
Formerly Vice President and Senior
Portfolio Manager for Delaware
Investment Advisors.
Richard H. Rubinstein,
Vice President Vice President and Portfolio
Manager of Oppenheimer Asset
Allocation Fund, Oppenheimer Fund
and Oppenheimer Variable Account
Funds; an officer of other
Oppenheimer Funds; formerly Vice
President and Portfolio
Manager/Security Analyst for
Oppenheimer Capital Corp., an
investment adviser.
Lawrence Rudnick,
Vice President Formerly Vice President of Dollar
Dry Dock Bank.
James Ruff,
Executive Vice President None.
Ellen Schoenfeld,
Assistant Vice President None.
Diane Sobin,
Vice President Vice President and Portfolio
Manager of Oppenheimer Gold &
Special Minerals Fund, Oppenheimer
Total Return Fund, Inc.
Oppenheimer Main Street Funds,
Inc. and Oppenheimer Variable
Account Funds; formerly a Vice
President and Senior Portfolio
Manager for Dean Witter
InterCapital, Inc.
Nancy Sperte,
Executive Vice President None.
Donald W. Spiro,
Chairman Emeritus and Director Vice Chairman and Trustee of the
New York-based Oppenheimer Funds;
formerly Chairman of the Manager
and the Distributor.
Arthur Steinmetz,
Senior Vice President Vice President and Portfolio
Manager of Oppenheimer Strategic
Income Fund, Oppenheimer Strategic
Income & Growth Fund; an officer
of other Oppenheimer Funds.
Ralph Stellmacher,
Senior Vice President Vice President and Portfolio
Manager of Oppenheimer Champion
Income Fund and Oppenheimer High
Yield Fund; an officer of other
Oppenheimer Funds.
John Stoma,
Vice President Formerly Vice President of Pension
Marketing with Manulife Financial.
James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee,
Director or Managing Partner of
the Denver-based Oppenheimer
Funds; President and a Director
of Centennial; formerly President
and Director of OAMC, and Chairman
of the Board of SSI.
James Tobin,
Vice President None.
Jay Tracey,
Vice President Vice President of the Manager;
Vice President and Portfolio
Manager of Oppenheimer Discovery
Fund, Oppenheimer Global Emerging
Growth Fund and Oppenheimer
Enterprise Fund. Formerly
Managing Director of Buckingham
Capital Management.
Gary Tyc,
Vice President, Assistant
Secretary and Assistant Treasurer Assistant Treasurer of the
Distributor and SFSI.
Jeffrey Van Giesen,
Vice President Formerly employed by Kidder
Peabody Asset Management.
Ashwin Vasan,
Vice President Vice President and Portfolio
Manager of Oppenheimer Multi-
Sector Income Trust, Oppenheimer
Multi-Government Trust and
Oppenheimer International Bond
Fund; an officer of other
Oppenheimer Funds.
Valerie Victorson,
Vice President None.
Dorothy Warmack,
Vice President Vice President and Portfolio
Manager of Daily Cash Accumulation
Fund, Inc., Oppenheimer Cash
Reserves, Oppenheimer Variable
Account Funds, Centennial America
Fund, L.P., Centennial Government
Trust and Centennial Money Market
Trust; Vice President of
Centennial.
Jerry Webman, Director of New York-based
Senior Vice President tax-exempt fixed income
Oppenheimer Funds; Formerly Managing Director and Chief
Fixed Income Strategist at
Prudential Mutual Funds.
Christine Wells,
Vice President None.
William L. Wilby,
Senior Vice President Vice President and Portfolio
Manager of Oppenheimer Variable
Account Funds, Oppenheimer Global
Fund and Oppenheimer Global Growth
& Income Fund; Vice President of
HarbourView; an officer of other
Oppenheimer Funds.
Carol Wolf,
Vice President Vice President and Portfolio
Manager of Oppenheimer Money
Market Fund, Inc., Centennial
America Fund, L.P., Centennial
Government Trust, Centennial Money
Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice
President of Oppenheimer Multi-
Sector Income Trust; Vice
President of Centennial.
Robert G. Zack,
Senior Vice President and
Assistant Secretary Associate General Counsel of the
Manager; Assistant Secretary of
the Oppenheimer Funds; Assistant
Secretary of SSI, SFSI; an officer
of other Oppenheimer Funds.
Eva A. Zeff,
Assistant Vice President An officer of certain Oppenheimer
Funds; formerly a Securities
Analyst for the Manager.
Arthur J. Zimmer,
Vice President Vice President and Portfolio
Manager of Oppenheimer Variable
Account Funds, Centennial America
Fund, L.P., Centennial Government
Trust, Centennial Money Market
Trust and Daily Cash Accumulation
Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income
Trust; Vice President of
Centennial; an officer of other
Oppenheimer Funds.
</TABLE>
The Oppenheimer Funds include the New York-based Oppenheimer Funds and
the Denver-based Oppenheimer Funds set forth below:
New York-based Oppenheimer Funds
- --------------------------------
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Series Fund, Inc.
Oppenheimer Quest for Value Funds
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based Oppenheimer Funds
- ------------------------------
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Connecticut Mutual Financial Services Series Fund, Inc.
Rochester-based Funds
- ---------------------
Bond Fund Series - Oppenheimer Bond Fund for
Growth
Rochester Fund Municipals
Rochester Portfolio Series - Limited Term
New York Municipal Fund
The address of OppenheimerFunds, Inc., the New York-based
Oppenheimer Funds, OppenheimerFunds Distributor, Inc., HarbourView
Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and
Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New
York 10048-0203.
The address of the Denver-based Oppenheimer Funds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., OppenheimerFunds
Services, Centennial Asset Management Corporation, Centennial Capital
Corp., and Main Street Advisers, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
The address of the Rochester-based funds is 350 Linden Oaks,
Rochester, New York 14625-2807.
Item 29. Principal Underwriters
----------------------
Not Applicable.
Item 30. Location of Accounts and Records
--------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act and
rules promulgated thereunder are in possession of Oppenheimer
Management Corporation at its offices at 3410 South Galena Street,
Denver, Colorado 80231.
Item 31. Management Services
-------------------
Not Applicable.
Item 32. Undertakings
------------
(a) Not Applicable.
(b) Not Applicable.
(c) Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Denver
and State of Colorado on the 17th day of April, 1996.
OPPENHEIMER VARIABLE ACCOUNT FUNDS
/s/ James C. Swain *
by: --------------------------
James C. Swain, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated:
Signatures: Title Date
- ----------- ----------------- --------------
/s/ James C. Swain* Chairman of the Board April 17, 1996
- --------------------- of Trustees and
James C. Swain Principal Executive
Officer
/s/ Bridget A. Macaskill* President and Trustee April 17, 1996
- ----------------------
Bridget A. Macaskill
/s/ George Bowen* Treasurer and April 17, 1996
- ---------------------- Principal Financial
George Bowen and Accounting Officer
/s/ Robert G. Avis* Trustee April 17, 1996
- ----------------------
Robert G. Avis
/s/ William A. Baker* Trustee April 17, 1996
- ----------------------
William A. Baker
/s/ Charles Conrad, Jr.* Trustee April 17, 1996
- ----------------------
Charles Conrad, Jr.
/s/ Jon S. Fossel* Trustee April 17, 1996
- ----------------------
Jon S. Fossel
/s/ Raymond J. Kalinowski* Trustee April 17, 1996
- ----------------------
Raymond J. Kalinowski
/s/ C. Howard Kast* Trustee April 17, 1996
- ----------------------
C. Howard Kast
/s/ Robert M. Kirchner* Trustee April 17, 1996
- ----------------------
Robert M. Kirchner
/s/ Ned M. Steel* Trustee April 17, 1996
- -----------------------
Ned M. Steel
*By: /s/ Robert G. Zack
-------------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
24(a)(8) Independent Auditors' Consent
24(b)5(ix) Investment Advisory Agreement for Oppenheimer Growth &
Income Fund dated 5/1/95
24(b)(10)(vii) Opinion and Consent of Counsel
24(b)(16) Performance Data Computation Schedule
24(b)(17) Financial Data Schedules
- -- Power of Attorney of Bridget A. Macaskill
Exhibit 24(a)(8)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 29 to
Registration Statement No. 2-93177 of Oppenheimer Variable Account Funds
of our report dated January 22, 1996 appearing in the Statement of
Additional Information, which is a part of such Registration Statement,
and to the reference to us under the caption "Financial Highlights"
appearing in the Prospectus, which is also a part of such Registration
Statement.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
April 18, 1996
PROSP\600con
Exhibit 24(b)(5)(ix)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made the 1st day of May, 1995, by and between OPPENHEIMER
VARIABLE ACCOUNT FUNDS (hereinafter referred to as the "Trust"), and
OPPENHEIMER MANAGEMENT CORPORATION (hereinafter referred to as "OMC").
WHEREAS, the Trust is an open-end, diversified series management
investment company registered as such with the Securities and Exchange
Commission (the "Commission") pursuant to the Investment Company Act of
1940 (the "Investment Company Act"), and OMC is a registered investment
adviser; and
WHEREAS, OPPENHEIMER GROWTH & INCOME FUND (the "Fund") is a series of the
Trust having a separate portfolio, investment policies and investment
restrictions; and
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties, as
follows:
1. General Provision.
a. The Trust hereby employs OMC and OMC hereby undertakes to act
as the investment adviser of the Fund and to perform for the Fund such
other duties and functions as are hereinafter set forth. OMC shall, in
all matters, give to the Fund and the Trust's Board of Trustees the
benefit of its best judgment, effort, advice and recommendations and
shall, at all times conform to, and use its best efforts to enable the
Fund to conform to: (i) the provisions of the Investment Company Act and
any rules or regulations thereunder; (ii) any other applicable provisions
of state or Federal law; (iii) the provisions of the Declaration of Trust
and By-Laws of the Trust as amended from time to time; (iv) policies and
determinations of the Board of Trustees of the Trust; (v) the fundamental
policies and investment restrictions of the Fund as reflected in the
Trust's registration statement under the Investment Company Act or as such
policies may, from time to time, be amended by the Fund's shareholders;
and (vi) the Prospectus and Statement of Additional Information of the
Trust in effect from time to time. The appropriate officers and employees
of OMC shall be available upon reasonable notice for consultation with any
of the trustees and officers of the Trust with respect to any matters
dealing with the business and affairs of the Trust including the valuation
of portfolio securities of the Fund which securities are either not
registered for public sale or not traded on any securities market.
2. Investment Management.
a. OMC shall, subject to the direction and control by the Trust's
Board of Trustees: (i) regularly provide investment advice and
recommendations to the Fund with respect to its investments, investment
policies and the purchase and sale of securities; (ii) supervise
continuously the investment program of the Fund and the composition of its
portfolio and determine what securities shall be purchased or sold by the
Fund; and (iii) arrange, subject to the provisions of paragraph 7 hereof,
for the purchase of securities and other investments for the Fund and the
sale of securities and other investments held in the portfolio of the
Fund.
b. Provided that the Trust shall not be required to pay any
compensation other than as provided by the terms of this Agreement and
subject to the provisions of paragraph 7 hereof, OMC may obtain investment
information, research or assistance from any other person, firm or
corporation to supplement, update or otherwise improve its investment
management services.
c. OMC shall not be liable for any loss sustained by the Trust
and/or the Fund in connection with matters to which this Agreement
relates, except a loss resulting by reason of OMC's willful misfeasance,
bad faith or gross negligence in the performance of its duties; or by
reason of its reckless disregard of its obligations and duties under this
Agreement.
d. Nothing in this Agreement shall prevent OMC or any officer
thereof from acting as investment adviser for any other person, firm or
corporation and shall not in any way limit or restrict OMC or any of its
directors, officers, stockholders or employees from buying, selling or
trading any securities for its or their own account or for the account of
others for whom it or they may be acting, provided that such activities
will not adversely affect or otherwise impair the performance by OMC of
its duties and obligations under this Agreement.
3. Other Duties of OMC.
OMC shall, at its own expense, provide and supervise the activities
of all administrative and clerical personnel as shall be required to
provide effective administration for the Fund, including the compilation
and maintenance of such records with respect to its operations as may
reasonably be required; the preparation and filing of such reports with
respect thereto as shall be required by the Commission; composition of
periodic reports with respect to operations of the Fund for its
shareholders; composition of proxy materials for meetings of the Fund's
shareholders, and the composition of such registration statements as may
be required by Federal securities laws for continuous public sale of
shares of the Fund. OMC shall, at its own cost and expense, also provide
the Trust with adequate office space, facilities and equipment. OMC
shall, at its own expense, provide such officers for the Fund as the
Fund's Board may request.
4. Allocation of Expenses.
All other costs and expenses of the Fund not expressly assumed by OMC
under this Agreement, shall be paid by the Trust, including, but not
limited to: (i) interest and taxes; (ii) brokerage commissions; (iii)
insurance premiums for fidelity and other coverage requisite to its
operations; (iv) compensation and expenses of its trustees other than
those associated or affiliated with OMC; (v) legal and audit expenses;
(vi) custodian and transfer agent fees and expenses; (vii) expenses
incident to the redemption of its shares; (viii) expenses incident to the
issuance of its shares against payment therefor by or on behalf of the
subscribers thereto; (ix) fees and expenses, other than as hereinabove
provided, incident to the registration under Federal securities laws of
shares of the Fund for public sale; (x) expenses of printing and mailing
reports, notices and proxy materials to shareholders of the Fund; (xi)
except as noted above, all other expenses incidental to holding meetings
of the Fund's shareholders; and (xii) such extraordinary non-recurring
expenses as may arise, including litigation, affecting the Fund and any
legal obligation which the Trust may have on behalf of the Fund to
indemnify its officers and trustees with respect thereto. Any officers
or employees of OMC or any entity controlling, controlled by or under
common control with OMC, who may also serve as officers, trustees or
employees of the Trust shall not receive any compensation from the Trust
for their services. The expenses with respect to any two or more series
of the Trust shall be allocated in proportion to the net assets of the
respective series except where allocations of direct expenses can be made.
5. Compensation of OMC.
The Trust agrees to pay OMC on behalf of the Fund and OMC agrees to
accept as full compensation for the performance of all functions and
duties on its part to be performed pursuant to the provisions hereof, a
fee computed on the aggregate net asset value of the Fund as of the close
of each business day and payable monthly at the annual rate of: .75% of
the first $200 million of average annual net assets; .72% of the next $200
million; .69% of the next $200 million; .66% of the next $200 million; and
.60% of average annual net assets in excess of $800 million.
6. Use of Name "Oppenheimer."
OMC hereby grants to the Trust a royalty-free, non-exclusive license
to use the name "Oppenheimer" in the name of the Trust and the Fund for
the duration of this Agreement and any extensions or renewals thereof.
To the extent necessary to protect OMC's rights to the name "Oppenheimer"
under applicable law, such license shall allow OMC to inspect, and subject
to control by the Trust's Board, control the name and quality of services
offered by the Fund under such name. Such license may, upon termination
of this Agreement, be terminated by OMC, in which event the Trust shall
promptly take whatever action may be necessary to change its name and the
name of the Fund and discontinue any further use of the name "Oppenheimer"
in the name of the Trust or the Fund or otherwise. The name "Oppenheimer"
may be used or licensed by OMC in connection with any of its activities,
or licensed by OMC to any other party.
7. Portfolio Transactions and Brokerage.
a. OMC is authorized, in arranging the purchase and sale of the
Fund's portfolio securities, to employ or deal with such members of
securities or commodities exchanges, brokers or dealers (hereinafter
"broker-dealers"), including "affiliated" broker-dealers (as that term is
defined in the Investment Company Act), as may, in its best judgment,
implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable
security price obtainable) of the Fund's portfolio transactions as well
as to obtain, consistent with the provisions of subparagraph (c) of this
paragraph 7, the benefit of such investment information or research as
will be of significant assistance to the performance by OMC of its
investment management functions.
b. OMC shall select broker-dealers to effect the Fund's portfolio
transactions on the basis of its estimate of their ability to obtain best
execution of particular and related portfolio transactions. The abilities
of a broker-dealer to obtain best execution of particular portfolio
transaction(s) will be judged by OMC on the basis of all relevant factors
and considerations including, insofar as feasible, the execution
capabilities required by the transaction or transactions; the ability and
willingness of the broker-dealer to facilitate the Fund's portfolio
transactions by participating therein for its own account; the importance
to the Fund of speed, efficiency or confidentiality; the broker-dealer's
apparent familiarity with sources from or to whom particular securities
might be purchased or sold; as well as any other matters relevant to the
selection of a broker-dealer for particular and related transactions of
the Fund.
c. OMC shall have discretion, in the interests of the Fund, to
allocate brokerage on the Fund's portfolio transactions to broker-dealers,
other than an affiliated broker-dealer, qualified to obtain best execution
of such transactions who provide brokerage and/or research services (as
such services are defined in Section 28(e)(3) of the Securities Exchange
Act of 1934) for the Fund and/or other accounts for which OMC or its
affiliates exercise "investment discretion" (as that term is defined in
Section 3(a)(35) of the Securities Exchange Act of 1934) and to cause the
Trust to pay such broker-dealers a commission for effecting a portfolio
transaction for the Fund that is in excess of the amount of commission
another broker-dealer adequately qualified to effect such transaction
would have charged for effecting that transaction, if OMC determines, in
good faith, that such commission is reasonable in relation to the value
of the brokerage and/or research services provided by such broker-dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of OMC or its affiliates with respect to the accounts as
to which they exercise investment discretion. In reaching such
determination, OMC will not be required to place or attempt to place a
specific dollar value on the brokerage and/or research services provided
or being provided by such broker-dealer. In demonstrating that such
determinations were made in good faith, OMC shall be prepared to show that
all commissions were allocated for purposes contemplated by this Agreement
and that the total commissions paid by the Trust over a representative
period selected by the Trust's trustees were reasonable in relation to the
benefits to the Fund.
d. OMC shall have no duty or obligation to seek advance competitive
bidding for the most favorable commission rate applicable to any
particular portfolio transactions or to select any broker-dealer on the
basis of its purported or "posted" commission rate but will, to the best
of its ability, endeavor to be aware of the current level of the charges
of eligible broker-dealers and to minimize the expense incurred by the
Fund for effecting its portfolio transactions to the extent consistent
with the interests and policies of the Fund as established by the
determinations of the Board of Trustees of the Trust and the provisions
of this paragraph 7.
e. The Trust recognizes that an affiliated broker-dealer: (i) may
act as one of the Fund's regular brokers so long as it is lawful for it
so to act; (ii) may be a major recipient of brokerage commissions paid by
the Trust; and (iii) may effect portfolio transactions for the Fund only
if the commissions, fees or other remuneration received or to be received
by it are determined in accordance with procedures contemplated by any
rule, regulation or order adopted under the Investment Company Act for
determining the permissible level of such commissions.
f. Subject to the foregoing provisions of this paragraph 7, OMC may
also consider sales of shares of the Fund and the other funds advised by
OMC and its affiliates as a factor in the selection of broker-dealers for
its portfolio transactions.
8. Duration.
This Agreement will take effect on the date first set forth above.
Unless earlier terminated pursuant to paragraph 10 hereof, this Agreement
shall continue in effect until December 31, 1996, and thereafter will
continue in effect from year to year, so long as such continuance shall
be approved at least annually by the Trust's Board of Trustees, including
the vote of the majority of the trustees of the Trust who are not parties
to this Agreement or "interested persons" (as defined in the Investment
Company Act) of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or by the holders of a "majority" (as
defined in the Investment Company Act) of the outstanding voting
securities of the Fund and by such a vote of the Trust's Board of
Trustees.
9. Disclaimer of Trustee or Shareholder Liability.
OMC understands and agrees that the obligations of the Trust under
this Agreement are not binding upon any Trustee or shareholder of the
Trust or Fund personally, but bind only the Trust and the Trust's
property. OMC represents that it has notice of the provisions of the
Declaration of Trust of the Trust disclaiming Trustee or shareholder
liability for acts or obligations of the Trust.
10. Termination.
This Agreement may be terminated: (i) by OMC at any time without
penalty upon sixty days' written notice to the Trust (which notice may be
waived by the Trust); or (ii) by the Trust at any time without penalty
upon sixty days' written notice to OMC (which notice may be waived by OMC)
provided that such termination by the Trust shall be directed or approved
by the vote of a majority of all of the trustees of the Trust then in
office or by the vote of the holders of a "majority" of the outstanding
voting securities of the Fund (as defined in the Investment Company Act).
11. Assignment or Amendment.
This Agreement may not be amended or the rights of OMC hereunder
sold, transferred, pledged or otherwise in any manner encumbered without
the affirmative vote or written consent of the holders of the "majority"
of the outstanding voting securities of the Trust. This Agreement shall
automatically and immediately terminate in the event of its "assignment,"
as defined as stated below.
12. Definitions.
The terms and provisions of this Agreement shall be interpreted and
defined in a manner consistent with the provisions and definitions of the
Investment Company Act.
OPPENHEIMER VARIABLE ACCOUNT FUNDS
for OPPENHEIMER GROWTH & INCOME FUND
By: /s/ Andrew J. Donohue
------------------------------
Andrew J. Donohue, Vice President
OPPENHEIMER MANAGEMENT CORPORATION
By: /s/ Mitchell J. Lindauer
--------------------------------
Mitchell J. Lindauer
Vice President
advisory\6009.asc
Exhibit 24(b)10(vii)
MYER, SWANSON, ADAMS & WOLF, P.C.
ATTORNEYS AT LAW
THE COLORADO STATE BANK BUILDING
1600 BROADWAY - SUITE 1850
DENVER, COLORADO 80202-4918
TELEPHONE (303) 866-9800
FACSIMILE (303) 866-9818
April 18, 1995
Oppenheimer Variable Account Funds
3410 South Galena Street
Denver, Colorado 80231
Gentlemen:
In connection with the proposed public offering of shares of Oppenheimer
Growth & Income Fund (the "Fund"), a series of Oppenheimer Variable
Account Funds, a Massachusetts business trust (the "Trust"), we have
examined such records and documents as we deem necessary for the purpose
of this opinion.
The Fund is a duly organized and validly existing Series of the Trust.
As of the date of this letter, it is our opinion that the shares of the
Fund covered by the Registration Statement for an indefinite number of
shares of the Fund on Form N-1A, when issued and paid for in accordance
with the terms of the offering, as set forth in the Prospectus and
Statement of Additional Information forming a part of the Registration
Statement, will be, when such Registration Statement shall have become
effective, legally issued and, except as set forth in the next paragraph,
fully paid and non-assessable.
Under Massachusetts law, shareholders of the Trust may, under certain
circumstances, be held personally liable as partners for the obligations
of the Trust. The Declaration of Trust does, however, contain an express
disclaimer of shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Trust or the
Trustees. The Declaration of Trust provides for indemnification out of
the Trust property of any shareholder held personally liable for the
obligations of the Trust. 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.
The shares of the Fund are sold only to separate accounts of certain
insurance companies to provide benefits under variable life insurance
policies and variable annuity contracts. We have not reviewed, and
express no opinion on the sufficiency of, any registration statements
filed by any such insurance company in connection with the offering of
separate accounts.
We hereby consent to the filing of this opinion as an Exhibit to the
Trust's Registration Statement and to the reference to Counsel in such
Prospectus and/or Statement of Additional Information. We also consent
to the filing of this opinion with the authorities administering the
securities laws of any jurisdiction in connection with the registration
or qualification under such laws of Oppenheimer Variable Account Funds and
its shares.
Very truly yours,
MYER, SWANSON, ADAMS & WOLF, P.C.
By /s/ Allan B. Adams
--------------------------------
Allan B. Adams
prosp\600opin
Oppenheimer Variable Account Funds
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are
calculated as described below, on the basis of the Fund's
distributions, for the past 10 years which are as follows:
Amount From
Distribution Amount From Long or
Reinvestment Investment Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Oppenheimer Bond Fund
01/06/86 0.2900 0.0750 10.930
04/07/86 0.2700 0.0000 11.020
07/05/86 0.2420 0.0780 10.880
10/06/86 0.2300 0.0000 10.800
01/09/87 0.2450 0.0480 10.900
04/03/87 0.2150 0.0000 10.810
07/10/87 0.2600 0.0000 10.460
10/09/87 0.2500 0.0000 10.010
12/24/87 0.2000 0.0000 10.140
03/25/88 0.2300 0.0000 10.310
06/24/88 0.2200 0.0000 10.210
09/23/88 0.2400 0.0000 10.280
12/23/88 0.2400 0.0000 10.150
03/23/89 0.2400 0.0000 10.020
06/23/89 0.2400 0.0000 10.360
09/22/89 0.2400 0.0000 10.340
12/22/89 0.2400 0.0000 10.500
03/23/90 0.2400 0.0000 10.270
06/25/90 0.2400 0.0000 10.300
09/21/90 0.2400 0.0000 10.130
12/21/90 0.2300 0.0000 10.330
03/22/91 0.2400 0.0000 10.430
06/21/91 0.2400 0.0000 10.530
09/20/91 0.2300 0.0000 10.860
12/20/91 0.2200 0.0000 11.050
03/27/92 0.2400 0.0000 10.840
06/26/92 0.2400 0.0000 11.040
09/25/92 0.2100 0.0000 11.180
12/18/92 0.1700 0.0000 10.940
03/26/93 0.1500 0.0000 11.400
06/25/93 0.1800 0.0000 11.550
09/24/93 0.2100 0.0000 11.760
12/27/93 0.2120 0.0000 11.660
03/25/94 0.0110 0.0280 11.460
06/24/94 0.2000 0.0000 11.190
09/23/94 0.2000 0.0000 11.060
12/16/94 0.2100 0.0000 10.940
03/24/95 0.2100 0.0000 11.060
06/23/95 0.1600 0.0000 11.590
09/22/95 0.1600 0.0000 11.530
12/22/95 0.2000 0.0000 11.750
f:\rr\dnvshare\sai\1995\123195\660.sch
Oppenheimer Variable Account Funds
Page 2
Amount From
Distribution Amount From Long or
Reinvestment Investment Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Oppenheimer High Income Fund
10/06/86 0.4400 0.0000 9.740
01/09/87 0.3100 0.0580 9.790
04/03/87 0.2800 0.0000 10.150
07/10/87 0.3200 0.0000 9.830
10/09/87 0.3200 0.0000 9.730
12/24/87 0.3220 0.0780 9.100
03/25/88 0.3000 0.1180 9.110
06/24/88 0.2620 0.0000 9.280
09/23/88 0.2500 0.0000 9.200
12/23/88 0.2600 0.0000 9.180
03/23/89 0.2700 0.0700 9.110
06/23/89 0.2700 0.0000 9.060
09/22/89 0.2700 0.0000 8.970
12/22/89 0.2700 0.0000 8.560
03/23/90 0.2700 0.0000 8.250
06/25/90 0.2700 0.0000 8.510
09/21/90 0.2700 0.0000 8.290
12/21/90 0.2700 0.0000 7.880
03/22/91 0.2700 0.0000 8.590
06/21/91 0.2700 0.0000 8.880
09/20/91 0.2700 0.0000 9.270
12/20/91 0.2700 0.0000 9.320
03/27/92 0.4700 0.0000 9.640
06/26/92 0.2700 0.0000 9.730
09/25/92 0.2700 0.0000 9.920
12/18/92 0.2700 0.0000 9.690
03/26/93 0.2700 0.0000 10.380
06/25/93 0.3900 0.0000 10.560
09/24/93 0.2700 0.0000 10.660
12/27/93 0.2600 0.0000 11.010
03/25/94 0.0200 0.2390 10.800
06/24/94 0.2100 0.0000 10.430
09/23/94 0.2100 0.0000 10.260
12/16/94 0.2200 0.0000 9.820
03/24/95 0.2400 0.0000 9.930
06/23/95 0.2400 0.0000 10.390
09/22/95 0.3000 0.0000 10.440
12/22/95 0.3000 0.0000 10.560
Oppenheimer Growth Fund
01/27/86 0.1470 0.1630 10.660
01/09/87 0.1500 0.4670 12.490
12/24/87 0.1850 0.9550 11.350
06/24/88 0.0000 0.0450 13.120
03/23/89 0.3500 0.0700 14.420
03/23/90 0.6200 1.9900 13.120
03/22/91 0.4900 0.0000 12.980
03/27/92 0.3600 0.0000 14.740
03/26/93 0.1400 0.3170 16.530
03/25/94 0.1540 0.0380 17.750
03/24/95 0.2220 0.2630 18.700
Oppenheimer Variable Account Funds
Page 3
Oppenheimer Capital Appreciation Fund
Amount From
Distribution Amount From Long or
Reinvestment Investment Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
01/09/87 0.1500 0.0000 13.780
12/24/87 0.1870 0.2680 14.560
06/24/88 0.0000 0.0100 16.280
03/23/89 0.3400 0.0000 17.070
03/23/90 0.5100 1.3350 17.120
06/25/90 0.0200 0.0700 17.600
03/22/91 0.2600 0.0000 17.830
03/27/92 0.1350 0.5500 22.750
03/26/93 0.0550 1.1020 24.170
03/25/94 0.0450 3.5280 28.200
03/24/95 0.0930 0.0470 26.670
Oppenheimer Multiple Strategies Fund
04/03/87 0.0350 0.0000 10.690
07/10/87 0.1300 0.0000 10.850
10/09/87 0.1400 0.0000 11.130
12/24/87 0.1250 0.0400 10.100
03/25/88 0.1400 0.0000 10.830
06/24/88 0.1400 0.0000 11.320
09/23/88 0.1900 0.0000 11.350
12/23/88 0.1800 0.0000 11.430
03/23/89 0.1000 0.3725 11.750
06/23/89 0.1800 0.0000 12.320
09/22/89 0.2000 0.0000 12.540
12/22/89 0.2000 0.0000 12.200
03/23/90 0.1000 0.4600 11.440
06/25/90 0.2000 0.0000 11.380
09/21/90 0.2000 0.0000 10.980
12/21/90 0.2000 0.0000 10.810
03/22/91 0.2000 0.0000 11.290
06/21/91 0.2000 0.0000 11.200
09/20/91 0.2000 0.0000 11.450
12/20/91 0.1800 0.0000 11.380
03/27/92 0.1300 0.0000 12.080
06/26/92 0.1300 0.0000 11.910
09/25/92 0.1500 0.0000 12.100
12/18/92 0.1300 0.0000 12.420
03/26/93 0.1000 0.0000 12.870
06/25/93 0.1700 0.0000 13.050
09/24/93 0.1300 0.0000 13.470
12/27/93 0.1470 0.0000 13.840
03/25/94 0.0110 0.0980 13.830
06/24/94 0.2000 0.0000 12.990
09/23/94 0.2000 0.0000 13.290
12/16/94 0.1900 0.0000 12.810
03/24/95 0.1800 0.3710 13.090
06/23/95 0.1600 0.0000 13.940
09/22/95 0.1600 0.0000 14.410
12/22/95 0.1500 0.0000 14.480
Oppenheimer Global Securities Fund
03/27/92 0.0400 0.0400 10.600
03/25/94 0.0370 0.2510 15.680
03/24/95 0.0000 0.3980 13.950
Oppenheimer Variable Account Funds
Page 4
Amount From
Distribution Amount From Long or
Reinvestment Investment Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Oppenheimer Strategic Bond Fund
09/24/93 0.0200 0.0000 5.030
12/27/93 0.0720 0.0000 5.120
03/25/94 0.0050 0.0060 5.010
06/24/94 0.1050 0.0000 4.850
09/23/94 0.1100 0.0000 4.800
12/16/94 0.1050 0.0000 4.650
03/24/95 0.1000 0.0000 4.560
06/23/95 0.0900 0.0000 4.760
09/22/95 0.0900 0.0000 4.780
12/22/95 0.0900 0.0000 4.870
Oppenheimer Growth & Income Fund
12/22/95 0.0150 0.0000 12.190
1. Average Annual Total Returns for the Periods Ended 12/31/95:
The formula for calculating average annual total return is as
follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000
payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Examples at NAV:
Oppenheimer Bond Fund
One Year Five Year
$1,169.96 1 $1,624.67 .2
(---------) - 1 = 17.00% (---------) - 1 = 10.19%
$1,000 $1,000
Ten Year
$2,444.39
(---------) - 1 = 9.35%
$1,000
Oppenheimer High Income Fund
One Year Five Year
$1,203.68 1 $2,324.97 .2
(---------) - 1 = 20.37% (---------) - 1 = 18.38%
$1,000 $1,000
Inception
$3,336.88 .1034
(---------) - 1 = 13.27%
$1,000
Oppenheimer Variable Account Funds
Page 5
1. Average Annual Total Returns for the Periods Ended 12/31/95
(Continued):
Examples at NAV:
Oppenheimer Growth Fund
One Year Five Year
$1,366.54 1 $2,127.67 .2
(---------) - 1 = 36.65% (---------) - 1 = 16.30%
$1,000 $1,000
Ten Year
$3,585.02
(---------) - 1 = 13.62%
$1,000
Oppenheimer Capital Appreciation Fund
One Year Five Year
$1,325.23 1 $2,784.39 .2
(---------) - 1 = 32.52% (---------) - 1 = 22.73%
$1,000 $1,000
Inception
$3,768.06 .1066
(---------) - 1 = 15.20%
$1,000
Oppenheimer Multiple Strategies Fund
One Year Five Year
$1,213.57 1 $1,766.54 .2
(---------) - 1 = 21.36% (---------) - 1 = 12.05%
$1,000 $1,000
Inception
$2,547.46 .1124
(---------) - 1 = 11.09%
$1,000
Oppenheimer Global Securities Fund
One Year Five Year
$1,022.40 1 $1,576.70 .2
(---------) - 1 = 2.24% (---------) - 1 = 9.53%
$1,000 $1,000
Inception
$1,583.00 .1947
(---------) - 1 = 9.36%
$1,000
Oppenheimer Variable Account Funds
Page 6
1. Average Annual Total Returns for the Periods Ended 12/31/95
(Continued):
Examples at NAV:
Oppenheimer Strategic Bond Fund
One Year Inception
$1,153.27 1 $1,156.91 .3758
(---------) - 1 = 15.33% (---------) - 1 = 5.63%
$1,000 $1,000
Oppenheimer Growth & Income Fund
Inception
$1,235.24 2.0455
(---------) - 1 = 58.50%
$1,000
2. Cumulative Total Returns for the Periods Ended 12/31/95:
The formula for calculating cumulative total return is as follows:
ERV - P
------- = Cumulative Total Return
P
Examples at NAV:
Oppenheimer Bond Fund
One Year Five Year
$1,169.96 - $1,000 $1,624.67 - $1,000
------------------ = 17.00% ------------------ = 62.47%
$1,000 $1,000
Ten Year
$2,444.39 - $1,000
------------------ = 144.44%
$1,000
Oppenheimer High Income Fund
One Year Five Year
$1,203.68 - $1,000 $2,324.97 - $1,000
------------------ = 20.37% ------------------ = 132.50%
$1,000 $1,000
Inception
$3,336.88 - $1,000
------------------ = 233.69%
$1,000
Oppenheimer Variable Account Funds
Page 7
2. Cumulative Total Returns for the Periods Ended 12/31/95
(Continued):
Examples at NAV:
Oppenheimer Growth Fund
One Year Five Year
$1,366.54 - $1,000 $2,127.67 - $1,000
------------------ = 36.65% ------------------ = 112.77%
$1,000 $1,000
Ten Year
$3,585.02 - $1,000
------------------ = 258.50%
$1,000
Oppenheimer Capital Appreciation Fund
One Year Five Year
$1,325.23 - $1,000 $2,784.39 - $1,000
------------------ = 32.52% ------------------ = 178.44%
$1,000 $1,000
Inception
$3,768.06 - $1,000
------------------ = 276.81%
$1,000
Oppenheimer Multiple Strategies Fund
One Year Five Year
$1,213.57 - $1,000 $1,766.54 - $1,000
------------------ = 21.36% ------------------ = 76.65%
$1,000 $1,000
Inception
$2,547.46 - $1,000
------------------ = 154.75%
$1,000
Oppenheimer Global Securities Fund
One Year Inception
$1,022.40 - $1,000 $1,576.70 - $1,000
------------------ = 2.24% ------------------ = 57.67%
$1,000 $1,000
Inception
$1,583.00 - $1,000
------------------ = 58.30%
$1,000
Oppenheimer Variable Account Funds
Page 8
2. Cumulative Total Returns for the Periods Ended 12/31/95
(Continued):
Examples at NAV:
Oppenheimer Strategic Bond Fund
One Year Inception
$1,153.27 - $1,000 $1,156.91 - $1,000
------------------ = 15.33% ------------------ = 15.69%
$1,000 $1,000
Oppenheimer Growth & Income Fund
Inception
$1,252.54 - $1,000
------------------ = 25.25%
$1,000
Oppenheimer Variable Account Funds
Page 9
3. Standardized Yield for the 30-Day Period Ended 12/31/95:
The Fund's standardized yields are calculated using the following
formula set
forth in the SEC rules:
a - b 6
Yield = 2 { (-------- + 1 ) - 1 }
cd
The symbols above represent the following factors:
a = Dividends and interest earned during the 30-day period.
b = Expenses accrued for the period (net of any expense
reimbursements).
c = The average daily number of Fund shares outstanding during
the 30-day period that were entitled to receive dividends.
d = The Fund's net asset value (excluding contingent deferred
sales charge) per share on the last day of the period.
Examples at NAV:
Oppenheimer Bond Fund
$1,135,463.04 - $133,445.63 6
2{(--------------------------- + 1) - 1} = 5.95%
17,280,865 x $11.84
Oppenheimer High Income Fund
$1,075,886.82 - $ 87,711.34 6
2{(--------------------------- + 1) - 1} = 9.64%
11,797,391 x $10.63
Oppenheimer Strategic Bond Fund
$ 426,038.68 - $ 38,605.11 6
2{(--------------------------- + 1) - 1} = 7.88%
12,216,861 x $4.60
Oppenheimer Variable Account Funds
Page 10
4. DIVIDEND YIELDS FOR THE 30-DAY PERIOD ENDED 12/31/95:
The Fund's dividend yields are calculated using the following
formula:
Dividend Yield = ( a x b ) / c
The symbols above represent the following factors:
a = The last declared dividend during the period.
b = Number of quarters in the year.
c = The Fund's net asset value (excluding sales charge) per share
on the last day of the period.
Examples:
Oppenheimer Bond Fund Oppenheimer High Income Fund
$0.2000 x 4 / $11.84 = 6.76% $0.3000 x 4 / $10.63 = 11.29%
Oppenheimer Strategic Bond Fund
$0.0900 x 4 / $4.60 = 7.83%
Oppenheimer Variable Account Funds
Page 11
5. YIELD AND EFFECTIVE YIELD FOR 7-DAY PERIOD ENDED 12/31/95:
Calculations of the Fund's "Yield" and "Compounded Effective Yield"
set forth
in the section entitled "Yield Information" in the Statement of
Additional
Information were made as follows:
Oppenheimer Money Fund
Date Daily Accrual Per Share (in $)
12/25/95 .0001454
12/26/95 .0001450
12/27/95 .0001435
12/28/95 .0001436
12/29/95 .0001458
12/30/95 .0001458
12/31/95 .0001459
--------
Seven Day
Total: .0010150
Current Yield: $0.0010150/7 x 365 = 5.29%
365/7
Effective Yield: (.0010150 + 1) - 1 = 5.43%
0
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<DIVIDEND-INCOME> 79325
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<GROSS-ADVISORY-FEES> 281335
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 318827
<AVERAGE-NET-ASSETS> 37698000
<PER-SHARE-NAV-BEGIN> 4.60
<PER-SHARE-NII> .38
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<PER-SHARE-DIVIDEND> .37
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<PER-SHARE-NAV-END> 4.91
<EXPENSE-RATIO> .85
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<NUMBER> 7
<NAME> OPPENHEIMER VARIABLE ACCOUNT FUNDS
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<INVESTMENTS-AT-COST> 338981583
<INVESTMENTS-AT-VALUE> 362627286
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<DIVIDEND-INCOME> 4761246
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<EXPENSES-NET> 2947137
<NET-INVESTMENT-INCOME> 2845513
<REALIZED-GAINS-CURRENT> (25767883)
<APPREC-INCREASE-CURRENT> 31653008
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<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 8174158
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<NUMBER-OF-SHARES-SOLD> 11235722
<NUMBER-OF-SHARES-REDEEMED> 7497205
<SHARES-REINVESTED> 585961
<NET-CHANGE-IN-ASSETS> 63136912
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 2947137
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<PER-SHARE-NAV-BEGIN> 15.09
<PER-SHARE-NII> .12
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<EXPENSE-RATIO> .89
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<AVG-DEBT-PER-SHARE> 0
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<ARTICLE> 6
<CIK> 0000752737
<NAME> OPPENHEIMER GROWTH FUND
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<NUMBER> 3
<NAME> OPPENHEIMER VARIABLE ACCOUNT FUNDS
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<ACCUM-APPREC-OR-DEPREC> 23617923
<NET-ASSETS> 117709890
<DIVIDEND-INCOME> 992690
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<EXPENSES-NET> 696935
<NET-INVESTMENT-INCOME> 1297719
<REALIZED-GAINS-CURRENT> 8674291
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</TABLE>
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<ARTICLE> 6
<CIK> 0000752737
<NAME> OPPENHEIMER CAPITAL APPRECIATION FUND
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<NUMBER> 5
<NAME> OPPENHEIMER VARIABLE ACCOUNT FUNDS
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<ACCUM-APPREC-OR-DEPREC> 62975347
<NET-ASSETS> 325404091
<DIVIDEND-INCOME> 330943
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<EXPENSES-NET> 1871804
<NET-INVESTMENT-INCOME> 1123451
<REALIZED-GAINS-CURRENT> 22379477
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<NUMBER-OF-SHARES-SOLD> 8882212
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
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<ARTICLE> 6
<CIK> 0000752737
<NAME> OPPENHEIMER BOND FUND
<SERIES>
<NUMBER> 2
<NAME> OPPENHEIMER VARIABLE ACCOUNT FUNDS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
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<DIVIDEND-INCOME> 81190
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<REALIZED-GAINS-CURRENT> 1310131
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000752737
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<NUMBER> 4
<NAME> OPPENHEIMER VARIABLE ACCOUNT FUNDS
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</TABLE>
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<ARTICLE> 6
<CIK> 0000752737
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<SERIES>
<NUMBER> 9
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000752737
<NAME> OPPENHEIMER MONEY FUND
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<NUMBER> 1
<NAME> OPPENHEIMER VARIABLE ACCOUNT FUNDS
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
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<ACCUMULATED-NET-GAINS> (18347)
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</TABLE>
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<ARTICLE> 6
<CIK> 0000752737
<NAME> OPPENHEIMER MULTIPLE STRATEGIES FUND
<SERIES>
<NUMBER> 6
<NAME> OPPENHEIMER VARIABLE ACCOUNT FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
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<SENIOR-EQUITY> 0
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</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes
and appoints Andrew J. Donohue or Robert G. Zack, and each of them, her
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for her and in her capacity as a trustee
of OPPENHEIMER VARIABLE ACCOUNT FUNDS, a Maryland corporation (the
"Fund"), to sign on her behalf any and all Registration Statements
(including any post-effective amendments to Registration Statements) under
the Securities Act of 1933, the Investment Company Act of 1940 and any
amendments and supplements thereto, and other documents in connection
thereunder, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as
fully as to all intents and purposes as she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and
agents, and each of them, may lawfully do or cause to be done by virtue
hereof.
Dated this 24th day of October, 1995.
/s/ Bridget A. Macaskill
- ---------------------------------
Bridget A. Macaskill
prosp\600.power
