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OPPENHEIMER VARIABLE ACCOUNT FUNDS
SEMIANNUAL REPORT
JUNE 30, 1997
[LOGO]
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OPPENHEIMER MONEY FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS
OBJECTIVE
OPPENHEIMER MONEY FUND, a series of Oppenheimer Variable Account Funds,
primarily seeks maximum current income in "money market" securities that offer
individual investors low capital risk and the maintenance of liquidity. These
securities include short-term U.S. Government securities, certificates of
deposit (CDs), bankers' acceptances and commercial paper.
NARRATIVE BY DOROTHY WARMACK, FUND MANAGER
The job of a money market fund is to provide liquidity, safety of principal and
a yield that keeps pace with inflation. During the six months ended June 30,
1997, Oppenheimer Money Fund, a series of Oppenheimer Variable Account Funds,
more than achieved those objectives.
For the six months ended June 30, 1997, the Oppenheimer Money Fund had a
compounded annualized yield of 5.23%. Without compounding, the corresponding
yield was 5.10%. The seven-day annualized yields, with and without compounding,
for the six months ended June 30, 1997 were 5.30% and 5.17%, respectively.(1)
It's important to remember that an investment in the Fund is neither insured nor
guaranteed by the U.S. Government, and there is no assurance that the Fund will
maintain a stable net asset value of $1.00 per share in the future.
Our strategy is to invest in the securities that present minimal credit risk.
Through our independent credit analysis, we are able to add value, in the way of
additional yield, by identifying and investing in securities that are improving
credits. We may invest in securities that receive the second highest rating
issued by one credit rating agency, but that security must also have been
assigned the highest rating by at least two other ratings agencies. We invested
in such a "split-rated" security only if it was, in our opinion, an improving
credit and likely to be upgraded.(2)
The U.S. economy is in the midst of one of its best periods in decades, with
growth in 1997 reaching an annual rate of 4%, up from about 2% in 1995.
Unemployment has fallen to its lowest level since the early 1970s. Meanwhile,
inflation is dormant, despite the strengthening economy.
As a result, interest rates have remained under control. Although 30-year
Treasury rates have risen above 7% several times during the past twelve months,
yields on short-term securities, such as U.S. Treasury bills and money market
securities, have hovered around closer to 5%.
In comparison, the annual inflation rate is generally agreed to have been about
2.5%. That means that the difference between money market yields and inflation
have been roughly 3 percentage points, twice the normal "spread." Considering
their low level of risk and their traditional role as a parking place for cash,
money market fund yields are quite attractive.
On March 25, 1997, the Federal Reserve Board raised short-term interest rates by
0.25%, its only action during the fiscal period. Many market observers predicted
the Fed's attempt to slow down the economy, since the Gross Domestic Product
during the first quarter of 1997 was growing at a 5.8% annual rate. Although the
March action came as no surprise, the next question was whether the Fed was
going to raise interest rates further.
If we could be certain that the Fed was about to raise interest rates, we would
shorten the portfolio's maturity. By shortening maturities, we could reinvest
quickly at higher yields. However, the Fed often behaves unexpectedly. For
instance, many investors expected the Fed to raise interest rates another 0.25%
at its May 20, 1997 meeting. Instead, the Fed left interest rates unchanged,
satisfied that the economy was slowing down.
Rather than try to make such predictions, our strategy is to "ladder" the
portfolio with some securities maturing in a few days, some maturing in a month,
some maturing in two months and so on. With such a broad maturity spectrum, the
portfolio is less affected by Fed moves up or down. At the same time, the
portfolio is able to enjoy higher income typically available on longer-term
money market securities.
Thank you for your confidence in the Oppenheimer Variable Account Funds -
Oppenheimer Money Fund. We look forward to helping you reach your investment
goals in the future.
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1. Compounded yields assume reinvestment of dividends. An "annualized" yield
assumes that the actual six month performance is replicated for a full year.
Past performance does not guarantee future results.
2. The Fund's portfolio is subject to change.
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OPPENHEIMER HIGH INCOME FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS
OBJECTIVE
OPPENHEIMER HIGH INCOME FUND, a series of Oppenheimer Variable Account Funds,
seeks a high level of current income. The Fund invests in high-yielding,
lower-rated and unrated fixed income securities.
NARRATIVE BY DAVID NEGRI, FUND MANAGER
The Oppenheimer High Income Fund has not performed as well as we had hoped in
1997. For the six-month period ended June 30, 1997, the Oppenheimer High Income
Fund delivered a cumulative total return of 4.73%.(1)
During the past six months, the U.S. economy was marked by moderate growth,
strong corporate earnings, low inflation and low interest rates. In such an
environment, bond yields remained low, which lead us to position the Fund more
conservatively over the period. That is, rather than holding higher-yielding
U.S. bonds, we instead held shorter duration, lower-yielding bonds, anticipating
that interest rates would rise. However, rates did not rise during the period,
and the Fund's sluggish performance can be attributed to our maintaining a more
cautious posture.
As for the small portion of the portfolio which was invested in international
holdings, the assets were split between emerging market debt and developed
country debt. We chose to limit the number of international holdings because the
value of most foreign currencies was overshadowed by a strong U.S. dollar. While
the emerging market instruments offered good valuations and a strong income
stream, our overall performance was hindered because our position was limited.
As for the developed country debt portion, it reported poor returns during the
period.
The remaining portfolio assets were invested in collateralized mortgage-backed
securities (CMBS), which provided solid gains for the Fund during the period.
Even though we had limited holdings, it did help improve the Fund's overall
performance. "Private label" mortgage products are mortgages secured by real
estate collateral, but not guaranteed by the U.S. Government.
Over the past six months, we've established a large position in the financial
services-related industries, such as banks, insurance companies and other types
of lending institutions. We believe this shift will benefit the Fund's overall
returns, because ongoing consolidations have helped these companies increase
their profitability by improving productivity and efficiency. Another area that
has been profitable for the Fund over the past six months is the
telecommunications/technology sector. As our holdings in this area reached what
we believed were peak values, we reduced our holdings and took profits. On the
other hand, several cyclical industries, such as paper and steel, underperformed
during the period, and because we were not heavily invested there, the Fund was
able to avoid some of the declines associated with these areas.
Today, unfortunately, valuation in the high yield and emerging markets don't
look any more attractive than they did at the beginning of the year, but we
believe yields are beginning to show signs of improvement. As a result, we
recently reduced the Fund's emerging markets position, mainly because it
appeared over-valued. As we reduced our holdings in emerging markets, we applied
the resulting proceeds to investments in the high-yield market. In addition,
over the past several months we have begun to slightly increase the duration of
the Fund, bringing it from a cautious to a more neutral position.
Looking ahead, we will continue to closely monitor the activities of the Federal
Reserve, keeping a watchful eye for signs of an increase in short-term interest
rates. If the Fed were to raise interest rates in order to stave off inflation,
it would lead us to extend our durations and take a more aggressive approach on
interest rate risk, a move that would enable us to earn higher yields.
Additionally, if the international developed country debt should improve in the
near term, we may also slightly increase our allocation there, which would
generate higher yields. Together, by extending durations and increasing our
international debt holdings, we believe the Fund could benefit from some very
attractive returns over the coming year.
We appreciate your confidence in Oppenheimer Variable Account Funds -
Oppenheimer High Income Fund. We look forward to helping you reach your
financial goals in the future.
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1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
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OPPENHEIMER BOND FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS
OBJECTIVE
OPPENHEIMER BOND FUND, a series of Oppenheimer Variable Account Funds, primarily
seeks a high level of current income from investing in high yield fixed income
securities rated "Baa" or better by Moody's or "BBB" or better according to
Standard & Poor's. Secondarily, the Fund seeks capital growth when this is
consistent with its primary objective of high current income.
NARRATIVE BY DAVID NEGRI, FUND MANAGER
The Oppenheimer Bond Fund has not performed as well as we had hoped in 1997. For
the six-month period ended June 30, 1997, the Fund delivered a cumulative total
return of 2.89%.(1)
The main factor affecting the Fund's performance was its international exposure.
This year, we've experienced an extended U.S. dollar rally - and a stronger
dollar lowers the value of foreign investments. Because a portion of the Fund is
international bonds, our performance suffered.
In an attempt to manage the affects of the strong dollar, we've increased the
percentage of our international position that was hedged. We've also decreased
the allocation to international investments slightly in investment grade
markets, both developed and emerging. However, we expect to see a number of
events that could result in better growth overseas and in local foreign
economies, so we continued to maintain many of these holdings.
The good news is that the overall credit quality of the Fund is higher, due to a
shift to more government assets. The Fund now has approximately 45% in
government mortgage-backed assets, which is higher than it was at the end of
1996.
Private label mortgages were also increased, which have substantially
outperformed the returns of the overall fixed income market. As a result, we are
maintaining a large allocation to mortgage-backed securities. (Private label
mortgages are mortgages secured by real estate collateral, but are not
guaranteed by the U.S. Government.) These securities continue to possess
attractive valuations, especially compared to corporate bonds. In addition to
being less sensitive to modest changes in interest rates, both private and
government-guaranteed mortgages offer the benefit of earning higher yields than
U.S. Treasuries.
The corporate sector, while turning in excellent performance, remained
underweighted because of its deteriorating valuation. We remained underweighted
on corporate bonds for several reasons. First, valuations were not extremely
attractive, since corporate bonds yielded little over U.S. Treasuries. And
second, we view the business cycle as fairly mature - possibly peaking in the
next year. This means that corporate earnings may not continue to rise as
quickly as they have been, which would slow credit improvement at many
companies.
Because of these reasons, we have positioned the Fund defensively, with shorter
durations,(2) for the past several quarters. Ultimately, we plan to increase the
durations in the portfolio once the Federal Reserve has adjusted its policy bias
toward higher interest rates. However, because wage costs - the harbinger of
inflation - have not risen substantially, even with rising employment, we are
not willing to position the Fund more aggressively at this time.
We appreciate your confidence in the Oppenheimer Variable Account Funds -
Oppenheimer Bond Fund. We look forward to helping you meet your financial goals
in the future.
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1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
2. Duration is a measure of interest rate sensitivity.
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OPPENHEIMER CAPITAL APPRECIATION FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT
FUNDS
OBJECTIVE
OPPENHEIMER CAPITAL APPRECIATION FUND, a series of Oppenheimer Variable Account
Funds, primarily seeks capital appreciation through investments in the common
stocks of "growth-type" companies. In addition, the Fund may selectively invest
in some "special situations" that management believes may provide opportunities
for growth.
NARRATIVE BY PAUL LAROCCO, FUND MANAGER
The Oppenheimer Capital Appreciation Fund has not performed as well in 1997 as
it did in 1996. For the six-month period ended June 30, 1997, the Oppenheimer
Capital Appreciation Fund delivered a cumulative total return of 6.44%.(1)
The overwhelming factor in the performance of the Fund for 1997 thus far has
been that small growth stocks were out-of-favor. This may have been due to the
fear in the market about rising interest rates and uncertainty about where the
economy was headed.
However, this trend is showing signs of turning around: From April 25 through
May 5, the Capital Appreciation Fund rebounded almost 13%. In general, when the
market resurged throughout the end of May and early June, small-cap stocks
bounced back even more than large-caps. In fact, according to the Russell 2000,
small-cap stocks rose 11% in May, a jump which represents their strongest month
in the last 10 years. Time will tell whether this resurgence represents the
beginning of a bona-fide small-cap rally.(2)
The fund's strategy continues to be fairly aggressive. We're focusing on small-
and mid-cap companies that have demonstrated rapid sales and earnings growth.
It's our belief that these fast-growing companies are undervalued - and it's
only a matter of time before they gain favor in the broader market.
For example, we hold the stock of a number of companies in the business services
area - in particular, information technology services. We're also very
interested in telemarketing services - an industry that has been growing at a
rate of 30%. These services help companies get closer to their customers and
provide a higher level of personalized services.
Our outlook for the Fund is very optimistic. That's because reported earnings
have been in line with, or surpassed, expectations for a very high percentage of
the companies we hold in the portfolio. Eventually, we believe these strong
earnings can win out and will be reflected in better stock price performance.
Our biggest challenge is to make sure that the projected earnings of the Fund's
holdings will continue to come through.
We appreciate your confidence in Oppenheimer Variable Account Funds -
Oppenheimer Capital Appreciation Fund. We look forward to helping you reach your
financial goals in the future.
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1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
2. The Russell 2000 is an unmanaged index of small capitalization U.S. issuers,
and cannot be purchased directly by investors. It is not an indication of past
or future Fund performance.
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OPPENHEIMER GROWTH FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS
OBJECTIVE
OPPENHEIMER GROWTH FUND, a series of Oppenheimer Variable Account Funds,
primarily seeks capital appreciation from investments in securities of
well-known and established companies. Current income is a secondary
consideration. The Fund's present focus is in securities of mid- or large-cap
companies with a history of earnings and dividend growth.
NARRATIVE BY JANE PUTNAM, FUND MANAGER
The Oppenheimer Growth Fund performed reasonably well over the past six months.
The Fund provided a cumulative total return of 14.81% for the six-month period
ended 6/30/97.(1) Although performance was in line with the Fund's peer group,
our returns lagged the broader market as we underperformed the Dow and the S&P.
In general, many of the Fund's stock selections performed better than average,
but high levels of cash resulting from profit taking during this period
undermined overall Fund performance.
Significant volatility in the stock market presented both opportunities and
challenges. March's almost-10% downturn created many buying opportunities,
especially in technology stocks, but the rapid rebound caused prices of many
stocks to rise above what we judged to be reasonable levels.
During this period, the market favored "secure growth" over "high growth". By
that, we mean that the prices of many steady, but only moderately growing,
stocks had reached what we considered to be near full valuations.
Simultaneously, for the first time in years, many "higher octane" stocks - those
expected to deliver accelerated earnings growth - were trading at reasonable
prices considering their growth rates. Therefore, we took the opportunity to
trim some of the Fund's higher-priced, slow growth holdings, and in their place
we added cheaper holdings which we believed would have faster growth.
In what was a relatively active period for the Fund, weightings in several
sectors shifted. We cut back our positions in basic materials and utilities,
and, although we added to some energy names, our overall exposure to energy
stocks was reduced.(2)
Throughout this period, technology stocks experienced broad sell activity and,
as a result, we were able to purchase some of the highest growth names at very
good prices. By the end of June, technology stocks had grown to represent about
a quarter of the Fund's holdings, up from less than 17% at the beginning of the
year. We expect to see sustained strength in the technology area as corporations
worldwide become increasingly more dependent on technological advances to fuel
increased productivity.
Financial sector stocks, after a rocky ride in March, re-emerged strongly to
finish out the period. They comprise about 15% of the Fund's portfolio. We have
been buying stocks of financial services firms with high growth potential - in
areas such as asset management and mutual funds, insurance, consumer lending and
other specialties - that are gaining at the expense of banks. We've
significantly added to our holdings of a consumer lending concern, and have been
aggressively purchasing a specialty insurer that has performed exceptionally
well because they added several successful acquisitions to the company's core
business. We are also somewhat overweighted in consumer cyclicals, which
includes faster-growing specialty retailers, entertainment companies and
consumer products companies.
Going forward, we intend to continue our pursuit of growth at the right price -
finding attractively-priced stocks of companies that are delivering
high-quality, high-volume earnings growth. We will continue to focus on large-
and mid-cap stocks, and carefully scrutinize earnings and track records before
buying any stock. We hope to reduce the Fund's cash level, although we want to
maintain a reserve that will allow us to be aggressive during the market dips we
anticipate in coming periods.
As always, we appreciate the trust you have placed in us. We look forward to
helping you meet your investment goals with the Oppenheimer Variable Account
Funds - Oppenheimer Growth Fund.
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1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
2. The Fund's portfolio is subject to change.
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OPPENHEIMER MULTIPLE STRATEGIES FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT
FUNDS
OBJECTIVE
OPPENHEIMER MULTIPLE STRATEGIES FUND, a series of Oppenheimer Variable Account
Funds, seeks a total investment return (including 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. The current allocation of the Fund's portfolio aims to take
advantage of current economic conditions while managing risk.
NARRATIVE BY RICHARD RUBENSTEIN, FUND MANAGER
The Oppenheimer Multiple Strategies Fund delivered a cumulative return of 9.15%
for the six-month period ended June 30, 1997.(1)
What makes this Fund different from most funds is that we believe strongly in
broad diversification - both by economic sector and by style. This composition
aims for "a portfolio for all seasons" that is designed to seek above-average
returns while taking on less risk, regardless of the market environment.
During the past six months, the Fund's fixed-income holdings performed well,
largely due to the success of our strategic income approach of diversification.
While we picked up income yield around the world to date, with spreads
declining, U.S. bonds became more attractive.
The U.S. stock market experienced an unusual first half of 1997, which is
reflected in the Fund's equity returns. For example, the stock market started
the year strong, then declined in March. However, it bounced back a month later
and continued to gain strength through June.
For five years in a row, technology, healthcare and financial stocks have led
the market, three areas in which the Fund is overweighted. However, during the
March decline, many of our technology holdings weakened. We took this
opportunity to add to our technology position and overall, the Fund's best
performance came from the recovery of these stocks at the end of April and May.
In particular, our holdings in IBM and Intel added to the Fund's positive
performance, due to strong earnings reports that raised their stock value. One
of our healthcare holdings benefited from its strong emphasis on technology, by
pioneering non-invasive knee surgery that has now led to further applications
for the heart and head.(2)
Another beneficiary of technology - through improved profits - is the financial
services industry. Several of our bank holdings reported positive results as
technology allows banks to improve productivity and efficiency. "Applied
technology" has improved profits as well in the energy business, particularly in
oil exploration, where new prospecting and well-drilling techniques make it
easier and cheaper to find and produce oil.
Internationally, the portfolio's performance has lagged the U.S. due to the
strong dollar. We've recently added some of Japan's strongest exporters in
industries such as technology, games and entertainment, and bicycle equipment.
Even with Japan's disappointing stock market, these stocks have performed well.
Right now, we're trying to get the best value we can in every market. We've sold
some of our large-cap holdings because we believe current valuations are too
high in comparison to their growth rates. Our conservative positioning should
allow us to participate in this new era of valuations, while maintaining low
risk.
We appreciate your confidence in Oppenheimer Variable Account Funds -
Oppenheimer Multiple Strategies Fund. We look forward to helping you reach your
financial goals in the future.
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1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
2. As of June 30, 1997, Intel was the Fund's largest stock holding (1.6% of net
assets), IBM was the Fund's 4th largest stock holding (0.6% of net assets). The
Fund's portfolio is subject to change.
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OPPENHEIMER GLOBAL SECURITIES FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT
FUNDS
OBJECTIVE
OPPENHEIMER GLOBAL SECURITIES FUND, a series of Oppenheimer Variable Account
Funds, seeks capital growth by investing in a diversified portfolio of foreign
and domestic stocks.
NARRATIVE BY WILLIAM WILBY, FUND MANAGER
The Oppenheimer Global Securities Fund provided a total rate of return of 16.12%
for the six-month period ended June 30, 1997.(1) This return includes changes in
share price and income distributions reinvested. The Fund's total rate of return
compares favorably with its benchmark, Morgan Stanley's EAFE Index, an unmanaged
index of international stocks, which provided a 11.21% total return.(2)
Most international stock markets have done quite well, led by the emerging
markets in Russia and Latin America. Of course, the U.S. stock market has
continued to rise overall, despite the nearly 10% correction in March and April.
We think that the U.S. market's rise is the result of a supply-driven expansion
coexisting with a low-inflation environment, contrary to the view of most
economists, who expect growth to produce inflation.
We've also seen positive market developments in Europe. Many European countries
are emerging from recession, and earnings growth is quite robust. In addition,
many of the area's companies have begun to restructure their operations, much as
U.S. companies have already done, which is an additional positive for future
earnings growth. Finally, the emerging markets of Latin America continue to
prosper in an environment of deregulation and robust economic growth as they
make the transition from over-regulated, socialist economic systems to free
market economies.(3)
On the other hand, the Asian markets, including Japan, have not done well during
the first half of 1997. The combination of a weak yen relative to other major
currencies plus a deflationary economic environment has severely constrained
Japan's stock market. The smaller Asian markets also have not done well, most
notably in Thailand where a banking crisis is looming. In our view, Hong Kong is
the only Asian market that has performed well. However, we are concerned that it
has risen too far, too fast, and that the risks there outweigh the
opportunities.
We have also participated very selectively in emerging markets in Eastern
Europe, including Russia. While these countries continue to experience severe
economic problems, the direction of change is positive, and investors have begun
to recognize the growth potential there.
A couple of stocks have been very positive contributors to the Fund's
performance. Porsche, the German automobile company, has done exceptionally
well, as has Japan's Nintendo, a leisure and entertainment company, and our top
stock holding. On the other hand, our position in French banks has been somewhat
disappointing as these stocks have recently fallen on the back of fears in the
wake of recent elections. However, we've used that weakness as an opportunity to
acquire more shares because we believe that French banks will benefit greatly
from higher profit margins and lower real estate write-offs. In addition, we
have been hurt by declines in U.S. networking stocks, which we have also added
to on weakness. Overall, however, we're pleased that the successes have far
outnumbered the disappointments.
We evaluate opportunities on a company-by-company basis rather than attempting
to identify broad markets, industries or economies for investment. We like to
say that we aim to buy good companies in good businesses at good prices - and at
the right time. We particularly like businesses that enjoy strong demand for
their products and that participate in markets with substantial barriers against
potential competitors.
We've identified eight long-term global investment themes that lead us to such
companies. These themes include capital market development, corporate
restructuring, efficiency-enhancing technologies and services, emerging consumer
markets, health care and biotechnology, infrastructure spending, natural
resources, and telecommunications and media. Within each theme, we look for
areas of high potential growth and market demand. We then conduct exhaustive
fundamental analysis of the companies that fit these broad criteria. Most
important, we personally visit with the management teams of the companies we
consider.
Once we've narrowed down the list to those companies that we like from a growth
standpoint, we use a variety of measures to determine which are selling at
attractive prices and which are fairly valued or overpriced. Finally, we attempt
to time our purchases to coincide with a positive catalyst within the company or
its market, such as a change in management or economic event.
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We are optimistic about the future of most, but not all, international markets.
In the United States, while we are concerned with the duration and magnitude of
the stock market's advance, we think a moderately expanding economy and low
inflation should continue to support corporate profit growth and higher stock
prices. In Europe, low interest rates, low inflation and corporate restructuring
are expected to provide an outstanding environment for the stock markets. Asia
should continue to experience economic difficulties, but, as mentioned earlier,
further stock market declines may represent the bottom of the cycle and provide
attractive investment opportunities. In the emerging markets, we continue to
favor Latin America over Asia as more investors "discover" these markets and
their growth potential.
We appreciate your confidence in Oppenheimer Variable Account Funds -
Oppenheimer Global Securities Fund. We look forward to helping you reach your
financial goals in the future.
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1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
2. The Morgan Stanley Capital International EAFE Index is a broad-based,
unmanaged index of foreign and domestic stocks including reinvestment of net
dividends, cannot be purchased by investors, and does not reflect any insurance
company separate account charges. Past performance does not guarantee future
results.
3. As of June 30, 1997, Nintendo was the Fund's largest stock holding (2.8% of
net assets), Porsche AG was the Fund's 7th largest stock holding (1.5% of net
assets). The Fund's portfolio is subject to change.
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OPPENHEIMER STRATEGIC BOND FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS
OBJECTIVE
OPPENHEIMER STRATEGIC BOND FUND, a series of Oppenheimer Variable Account Funds,
seeks a high level of current income from debt securities. The Fund primarily
invests in three sectors: foreign fixed income securities, lower-rated
high-yield domestic corporate bonds and U.S. government securities.
NARRATIVE BY DAVID NEGRI, FUND MANAGER
Relatively speaking, the Oppenheimer Strategic Bond Fund has had lower than
expected performance in 1997. For the six-month period ended June 30, 1997, the
Oppenheimer Strategic Bond Fund delivered a cumulative total return of 3.96%.(1)
The Fund's relative performance was reduced by our broad conservative posture.
Relative to our peers, we had less exposure to the biggest risk factors in a
bond fund: interest rates and credit risk. On the other hand, we had more
exposure to international markets, relative to our peers. This heavy
international exposure worked both for and against us during the past six
months. Our holdings in emerging markets were beneficial to the Fund's overall
performance, fueled mostly by the U.S. bond rally. But our developed markets
investments hindered the Fund's performance, because of the extended dollar
rally this year - a stronger dollar hurts foreign investments in developed
markets that are more closely tied to the U.S. stock market. It's important to
keep in mind that while foreign investments offer attractive opportunities, they
are subject to greater expenses and risks than U.S. investments, such as adverse
currency fluctuations.
The good news is that high-yield market and emerging market indices hit new
highs in the first half of 1997.(2) However, the Fund didn't gain the full
benefit of this performance because we maintained defensive high-yield and
emerging market securities in the Fund's portfolio. While we may have given up
some returns during the period, we still feel we're making the best long-term
risk/reward decisions because we believe high-yield and emerging markets are
fully valued.
The goal of the portfolio continues to be earning high income by investing in
loosely correlated sectors. That's because different types of bonds have
different types of risks and they react to the market in opposing ways if held
together in a mutual fund at the same time - which makes for a more stable
portfolio. To that end, the Fund's allocation hasn't changed very much over the
past six months. What we have changed is to increase the duration of our
holdings in a way that would move the Fund's posture away from being very
defensive and move it more toward a neutral-to-slightly defensive position. For
example, we've increased the risk and interest-rate dimension of the Fund by
adding to the government component. Conversely, we've decreased credit risk on
average in the high-yield corporate sector.
As far as longer duration dollar-based assets are concerned - primarily Brady
bonds - we've shifted heavily into short-duration local currency instruments,
which offer attractive valuations. In many cases, these bonds are the foreign
equivalents of three-month to one-year U.S. Treasury bills.
We're expecting that interest rates in the U.S. will rise eventually - and that
the dollar's strength will continue. So we'll remain positioned relatively
defensive in the high-yield and international sectors to protect the portfolio's
assets in the event of an interest rate increase.
We appreciate your confidence in Oppenheimer Variable Account Funds -
Oppenheimer Strategic Bond Fund. We look forward to helping you reach your
financial goals in the future.
- ----------------------------
1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
2. The Fund may invest in below-investment-grade securities which carry a
greater risk that the issuer may default on principal or interest payments. The
Fund's portfolio is subject to change.
9
<PAGE>
OPPENHEIMER GROWTH & INCOME FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS
OBJECTIVE
OPPENHEIMER GROWTH & INCOME FUND, a series of Oppenheimer Variable Account
Funds, seeks high total return, which includes growth in the value of its shares
as well as current income from equity and debt securities.
NARRATIVE BY ROBERT MILNAMOW AND MIKE LEVINE, FUND MANAGERS
The Oppenheimer Growth & Income Fund performed well during the period. For the
six-month period ended June 30, 1997, cumulative total return for the Fund was
13.87%.(1) The positive performance of the Fund has come from holdings in a
variety of sectors, including insurance and technology companies.
The Fund benefited from improving fundamentals in the insurance area, with two
holdings in particular reporting strong gains. The first benefited from a strong
management team, positive fundamentals in the financial services sector, and
some positive trends in the insurance industry. The other reported solid results
during the first half of the year because of improved underwriting procedures
and reduced risk exposure to natural disasters.
In general, the technology sector has been volatile, but our holdings have
performed pretty well. One of our top holdings, IBM, has been extremely
successful at reducing its cost structure and accelerating the growth of its new
products and services. Additionally, IBM has been aggressively repurchasing its
own stock. We believe that it was an inexpensive stock.(2)
On the other hand, the Fund was adversely impacted by its underweighting in
certain large capitalization stocks. A large percentage of the positive equity
market performance this year has been generated by large blue-chip stocks.
Because we believe that many of these stocks are presently overvalued, we have
been intentionally underweighted in this area, and as a result, missed out on
some gains.
For the second half of 1997, we believe we will continue to see volatility as
various groups and sectors rotate in-and out-of-favor. However, we view the
stock market volatility as a "plus" because it has given us the opportunity to
build some fairly large positions in areas that we do find promising, such as
financial and retail companies. Despite the uncertainty in the market ahead, the
Fund maintains an aggressive and opportunistic investment posture. And while we
don't anticipate any major sector changes, and still plan to limit our equity
exposure to selected large capitalization stocks, we will continue to seek and
identify the most attractive values. At the same time, we'll continue to reduce
exposure to areas with poor fundamentals or stocks which have reached fair
valuation levels.
The lesson to be learned from the market swings of the first half of 1997 is
that investor perceptions change rapidly - even if the market doesn't change
that much. We've found that it doesn't pay to overreact to market fluctuations
... on either the downside or the upside. So we'll be taking market events in
stride and remain true to the Fund's strategy for the remainder of 1997.
We appreciate your confidence in Oppenheimer Variable Account Funds -
Oppenheimer Growth & Income Fund. We look forward to helping you reach your
financial goals in the future.
- ----------------------------
1. Includes changes in net asset value per share without deducting any insurance
product charges. Such performance is not annualized and would have been lower if
these charges were taken into account.
2. As of June 30, 1997, IBM was the Fund's 15th largest stock holding (1.3% of
net assets). The Fund's portfolio is subject to change.
10
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NOTE 1
- -------------------------------------------------------------
<S> <C> <C>
DIRECT BANK OBLIGATIONS - 10.5%
- -------------------------------------------------------------
Abbey National North America Corp.,
5.39%, 7/11/97 $3,000,000 $ 2,995,509
- -------------------------------------------------------------
ABN Amro North America Finance,
Inc., 5.38%, 7/24/97 1,000,000 996,563
- -------------------------------------------------------------
Bankers Trust Co., New York, 5.71%,
4/15/98(1) 3,000,000 3,000,000
- -------------------------------------------------------------
CoreStates Capital Corp., 5.608%,
12/18/97(1) 2,000,000 1,999,471
- -------------------------------------------------------------
National Westminster Bank of
Canada, 5.371%, 7/8/97 5,000,000 4,994,778
------------
Total Direct Bank Obligations 13,986,321
- -------------------------------------------------------------
LETTERS OF CREDIT - 9.5%
- -------------------------------------------------------------
Barclays Bank PLC, guaranteeing
commercial paper of: Banco
Nacionale de Mexico SA-Series B,
5.63%, 7/1/97 3,700,000 3,700,000
- -------------------------------------------------------------
Credit Suisse, guaranteeing
commercial paper of: CEMEX, S.A. de
C.V.-Series B, 5.61%, 8/22/97 3,000,000 2,975,690
- -------------------------------------------------------------
Societe Generale, guaranteeing
commercial paper of:
Banco Nacionale de Comercio
Exterior SNC-Series A, 5.61%,
12/2/97 3,000,000 2,928,005
Nacional Financiera SNC-Series A,
5.75%, 8/18/97 3,000,000 2,977,000
------------
Total Letters of Credit 12,580,695
- -------------------------------------------------------------
SHORT-TERM NOTES - 74.6%
- -------------------------------------------------------------
BANK HOLDING COMPANIES - 2.2%
Bankers Trust New York Corp.,
5.39%, 7/9/97 3,000,000 2,996,407
- -------------------------------------------------------------
BROKER/DEALERS - 22.2%
Bear Stearns Cos., Inc., 5.888%,
3/23/98(1) 5,000,000 5,007,511
- -------------------------------------------------------------
Dean Witter, Discover & Co.,
5.888%, 9/29/97(1) 2,500,000 2,501,402
- -------------------------------------------------------------
Goldman Sachs Group, L.P.,
Promissory Nts., 5.844%,
10/10/97(2) 3,000,000 3,000,000
- -------------------------------------------------------------
Lehman Brothers Holdings, Inc.,
5.65%, 7/7/97 5,000,000 4,995,292
- -------------------------------------------------------------
Merrill Lynch & Co., Inc.:
5.40%, 7/11/97 2,000,000 1,997,000
5.70%, 8/12/97 2,000,000 1,986,700
- -------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co., 5.50%, 3/24/98 5,000,000 5,000,000
- -------------------------------------------------------------
Republic New York Securities Corp.,
6.50%, 4/24/98(1) 5,000,000 5,000,000
------------
29,487,905
- -------------------------------------------------------------
COMMERCIAL FINANCE - 7.4%
CIT Group Holdings, Inc., 5.764%,
3/11/98(1) 1,000,000 1,000,000
- -------------------------------------------------------------
FINOVA Capital Corp., 5.61%,
10/30/97 3,000,000 2,943,432
- -------------------------------------------------------------
Heller Financial, Inc.:
5.71%, 10/10/97(1) 2,000,000 1,999,889
5.75%, 12/15/97 2,000,000 1,946,653
5.75%, 9/4/97 2,000,000 1,979,236
------------
9,869,210
- -------------------------------------------------------------
CONSUMER FINANCE - 3.7%
Sears Roebuck Acceptance Corp.,
6.20%, 7/1/97 4,865,000 4,865,000
</TABLE>
11
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NOTE 1
<S> <C> <C>
- -------------------------------------------------------------
DIVERSIFIED FINANCIAL - 5.3%
Ford Motor Credit Corp., 5.57%,
11/20/97 $2,500,000 $ 2,445,074
- -------------------------------------------------------------
General Motors Acceptance Corp.:
5.63%, 11/10/97 3,000,000 2,938,070
5.63%, 12/8/97 1,660,000 1,618,463
------------
7,001,607
- -------------------------------------------------------------
ELECTRONICS - 1.5%
Mitsubishi Electric Finance
America, Inc., 5.65%, 8/27/97(3) 2,000,000 1,982,108
- -------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
2.2%
American Home Products Corp.,
5.63%, 9/3/97(3) 3,000,000 2,969,973
- -------------------------------------------------------------
INDUSTRIAL SERVICES - 4.5%
PHH Corp.:
5.658%, 1/27/98(1) 1,000,000 999,886
5.698%, 1/15/98(1) 5,000,000 4,999,736
------------
5,999,622
- -------------------------------------------------------------
INSURANCE - 3.8%
Pacific Mutual Life Insurance Co.,
5.756%, 7/21/97(1)(2) 5,000,000 5,000,000
- -------------------------------------------------------------
OIL-INTEGRATED - 3.8%
Repsol International Finance BV,
5.38%, 7/10/97 5,000,000 4,993,275
- -------------------------------------------------------------
SPECIAL PURPOSE FINANCIAL - 15.8%
Beta Finance, Inc.:
5.61%, 9/5/97(3) 2,555,000 2,528,722
5.65%, 9/15/97(3) 4,000,000 3,952,289
- -------------------------------------------------------------
Enterprise Funding Corp., 5.65%,
12/15/97(3) 5,000,000 4,868,951
- -------------------------------------------------------------
Preferred Receivables Funding
Corp., 5.62%, 8/25/97 5,800,000 5,750,201
- -------------------------------------------------------------
RACERS Series 1996-MM-12-3, 5.687%,
12/15/97(1)(2) 2,000,000 2,000,000
- -------------------------------------------------------------
Sigma Finance, Inc., 5.60%,
12/4/97(3) 2,000,000 1,951,467
------------
21,051,630
- -------------------------------------------------------------
SPECIALTY RETAILING - 2.2%
St. Michael Finance Ltd., 5.61%,
9/11/97 3,000,000 2,966,340
------------
Total Short-Term Notes 99,183,077
- -------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 3.7%
- -------------------------------------------------------------
Federal Home Loan Bank, 5.67%,
8/1/97(1) 5,000,000 4,999,625
- -------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS -
1.5%
- -------------------------------------------------------------
Bayerische Landesbank Girozentrale,
5.80%, 7/29/97(1) 2,000,000 2,000,000
- -------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE 99.8% 132,749,718
- -------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.2 223,217
---------- ------------
NET ASSETS 100.0% $132,972,935
---------- ------------
---------- ------------
</TABLE>
12
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
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 Fund at the time of purchase. Other securities normally bear interest at the
rates shown.
1. Floating or variable rate obligation. 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 June 30, 1997. This instrument may
also have a demand feature which allows the recovery of principal at any time,
or at specified intervals not exceeding one year, on up to 30 days' notice.
Maturity date shown represents effective maturity based on variable rate and, if
applicable, demand feature.
2. Restricted securities which are considered illiquid, by virtue of the absence
of a readily available market or because of legal or contractual restrictions on
resale, amount to $7,000,000, or 5.26% of the Fund's net assets. The Fund may
not invest more than 10% of its net assets (determined at the time of purchase)
in illiquid securities.
3. Security issued in an exempt transaction without registration under the
Securities Act of 1933 (the Act). The securities are carried at amortized cost,
and amount to $18,253,510, or 13.73% of the Fund's net assets.
See accompanying Notes to Financial Statements.
13
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C> <C>
MORTGAGE-BACKED OBLIGATIONS - 5.5%
- ----------------------------------------------------------------------
Asset Securitization Corp.,
Commercial Mtg. Pass-Through
Certificates:
Series 1997-D4, Cl. B1, 7.525%,
4/14/29(2) $ 167,000 $ 156,589
Series 1997-D4, Cl. B2, 7.525%,
4/14/29(2) 167,000 152,701
Series 1997-D4, Cl. B3, 7.525%,
4/14/29(2) 166,000 147,403
- ----------------------------------------------------------------------
CBA Mortgage Corp., Mtg.
Pass-Through Certificates, Series
1993-C1, Cl. F, 7.76%,
12/25/03(2)(3) 700,000 554,093
- ----------------------------------------------------------------------
CS First Boston Mortgage Securities
Corp., Mtg. Pass-Through
Certificates:
Series 1997-C1, Cl. E, 7.50%,
6/20/29 506,000 503,707
Series 1997-C1, Cl. F, 7.50%,
6/20/29 300,000 278,391
Series 1997-C1, Cl. G, 7.50%,
6/20/29 500,000 445,547
Series 1997-C1, Cl. H, 7.50%,
6/20/29 225,000 165,656
- ----------------------------------------------------------------------
Commercial Mortgage Acceptance
Corp., Collateralized Mtg.
Obligation, Series 1996-C1, Cl. E,
8.118%, 12/25/20(2)(3) 250,000 252,227
- ----------------------------------------------------------------------
First Chicago/Lennar Trust 1,
Commercial Mtg. Pass-Through
Certificates:
Series 1997-CHL1, 8.13%, 2/25/11(2) 1,500,000 1,194,375
Series 1997-CHL1, 8.13%, 5/25/08(2) 300,000 289,031
- ----------------------------------------------------------------------
First Union-Lehman Brothers
Commercial Mortgage Trust,
Interest-Only Stripped Mtg.
Pass-Through Certificates, Series
97-C1, Cl. B-3, 1.37%, 4/18/29 8,247,300 653,663
- ----------------------------------------------------------------------
Merrill Lynch Mortgage Investors,
Inc., Mtg. Pass-Through
Certificates, Series 1995-C2, Cl.
D, 8.206%, 6/15/21(2) 419,027 427,310
- ----------------------------------------------------------------------
Morgan Stanley Capital I, Inc.,
Commercial Mtg. Pass-Through
Certificates:
Series 1996-C1, Cl. E, 7.51%,
2/15/28(2)(4) 835,342 765,382
Series 1997-HF1, Cl. F, 6.86%,
7/15/29 300,000 268,875
- ----------------------------------------------------------------------
Mortgage Capital Funding, Inc.,
Commercial Mtg. Pass-Through
Certificates:
Series 1997-MC1, Cl. F, 7.452%,
5/20/07(4) 254,890 235,933
Series 1996-MC1, Cl. G, 7.15%,
6/15/06(3) 750,000 688,828
- ----------------------------------------------------------------------
NationsCommercial Corp., NB
Commercial Mtg. Pass-Through
Certificates, Series-DMC, Cl. C,
8.921%, 8/12/11(3) 900,000 932,555
- ----------------------------------------------------------------------
Resolution Trust Corp. Commercial
Mtg. Pass-Through Certificates:
Series 1994-C1, Cl. E, 8%, 6/25/26 683,884 661,551
Series 1994-C2, Cl. G, 8%, 4/25/25 783,674 775,593
Series 1995-C1, Cl. F, 6.90%,
2/25/27 836,272 772,899
- ----------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VII, Series 1996-B, Cl.
1, 7.136%, 4/25/26 1,482,878 993,528
- ----------------------------------------------------------------------
Structured Asset Securities Corp.,
Multiclass Pass-Through
Certificates, Series 1996-C3, Cl.
E, 8.458%, 6/25/30(3) 650,000 634,562
------------
Total Mortgage-Backed Obligations
(Cost $11,180,845) 11,950,399
</TABLE>
14
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS -
12.1%
- ----------------------------------------------------------------------
Argentina (Republic of) Bonds,
Bonos de Consolidacion de Deudas,
Series I, 3.242%, 4/1/01(2)(5) ARP 99,561 $ 91,032
- ----------------------------------------------------------------------
Argentina (Republic of) Discount
Bonds, 6.875%, 3/31/23(2) 900,000 779,625
- ----------------------------------------------------------------------
Banco Nacional de Comercio Exterior
SNC International Finance BV Gtd.
Registered Bonds, 11.25%, 5/30/06 80,000 90,200
- ----------------------------------------------------------------------
Bank Tabugan Negara Negotiable CD,
Zero Coupon, 13.151%, 2/3/98(6) IDR 1,530,066,000 581,977
- ----------------------------------------------------------------------
Bonos de la Tesoreria de la
Federacion, Zero Coupon, 27.786%,
4/2/98(6) MXP 27,488,320 2,967,572
- ----------------------------------------------------------------------
Brazil (Federal Republic of) Debt
Conversion Bonds, 6.937%,
4/15/12(2) 250,000 206,641
- ----------------------------------------------------------------------
Brazil (Federal Republic of)
Eligible Interest Bonds, 6.875%,
4/15/06(2) 163,350 151,201
- ----------------------------------------------------------------------
Brazil (Federal Republic of)
Multi-Year Discount Facility
Agreement Trust Certificates,
Series REGS, 6.563%, 9/15/07(2)(3) 349,354 318,350
- ----------------------------------------------------------------------
Central Bank of Costa Rica Interest
Claim Bonds, Series B, 6.664%,
5/21/05(2) 187,923 177,587
- ----------------------------------------------------------------------
City of Buenos Aires Bonds, 10.50%,
5/28/04(4) ARP 115,000 117,745
- ----------------------------------------------------------------------
City of St. Petersburg Sr. Unsub.
Nts., 9.50%, 6/18/02(3) 1,025,000 1,025,641
- ----------------------------------------------------------------------
Ecuador (Republic of) Past Due
Interest Bonds, 5.39%, 2/27/15(2) 4,735,764 3,051,620
- ----------------------------------------------------------------------
Financiera Energetica Nacional SA
Nts., 9.375%, 6/15/06 420,000 450,712
- ----------------------------------------------------------------------
Hashemite (Kingdom of) Jordan Disc.
Bonds, 6.75%, 12/23/23(2) 500,000 413,750
- ----------------------------------------------------------------------
Hashemite (Kingdom of) Jordan Par
Bonds, 4%, 12/23/23(7) 3,750,000 2,475,000
- ----------------------------------------------------------------------
Hellenic Republic Treasury Bills,
Zero Coupon:
9.269%, 10/31/97(6) GRD 100,000,000 348,672
9.154%, 4/1/98(6) GRD 109,000,000 369,330
- ----------------------------------------------------------------------
Jamaica (Government of) Bonds,
9.625%, 7/2/02(3) 1,400,000 1,409,100
- ----------------------------------------------------------------------
Moldova (Republic of) Bonds,
9.875%, 6/13/02(3) 1,100,000 1,124,695
- ----------------------------------------------------------------------
Moldova (Republic of) Sr. Unsub.
Nts., 8.465%, 12/10/99(2) 140,000 141,768
- ----------------------------------------------------------------------
Petroleos Mexicanos Debs., 14.50%,
3/31/06 GBP 180,000 364,731
- ----------------------------------------------------------------------
Philippines (Republic of) Bonds,
8.60%, 6/15/27 300,000 297,000
- ----------------------------------------------------------------------
Poland (Republic of) Bonds:
12%, 6/12/01 PLZ 2,000,000 490,377
12%, 6/12/02 PLZ 1,500,000 363,218
16%, 10/12/98 PLZ 1,800,000 509,451
- ----------------------------------------------------------------------
PT Hutama Karya Promissory Nts.,
Zero Coupon, 14.783%, 2/10/98(6) IDR 1,000,000,000 376,947
- ----------------------------------------------------------------------
Renel R.A. Nts., 8.562%,
2/21/02(2)(4) 2,200,000 2,204,125
- ----------------------------------------------------------------------
Romanian Commercial Bank SA Bonds,
9.125%, 3/10/00 445,000 441,106
- ----------------------------------------------------------------------
South Africa (Republic of) Bonds,
Series 162, 12.50%, 1/15/02 ZAR 7,929,000 1,645,920
- ----------------------------------------------------------------------
United Mexican States Bonds, Series
A, 6.867%, 12/31/19(2) 1,050,000 979,125
- ----------------------------------------------------------------------
Venezuela (Republic of) Disc.
Bonds, Series DL, 6.75%,
12/18/07(2) 500,000 465,000
- ----------------------------------------------------------------------
Venezuela (Republic of) New Money
Bonds, Series P, 6.75%, 12/18/05(2) 500,000 472,500
- ----------------------------------------------------------------------
Venezuela (Republic of) Disc.
Bonds, Series W-A, 6.812%,
3/31/20(2) 250,000 221,563
</TABLE>
15
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS
(CONTINUED)
- ----------------------------------------------------------------------
Wijaya Karya Negotiable Promissory
Nts., Zero Coupon, 14.511%,
12/9/97(6) IDR 3,000,000,000 $ 1,158,860
------------
Total Foreign Government
Obligations (Cost $26,358,864) 26,282,141
- ----------------------------------------------------------------------
LOAN PARTICIPATIONS - 1.7%
- ----------------------------------------------------------------------
Algeria (Republic of) Reprofiled
Debt Loan Participation, Tranche A,
6.977%, 9/4/06(2) 3,215,000 2,818,148
- ----------------------------------------------------------------------
AO Rostelecom Loan Facility Nts.,
9.50%, 2/15/00(2) 200,000 200,000
- ----------------------------------------------------------------------
Trinidad & Tobago Loan
Participation Agreement, Tranche B,
1.625%, 9/30/00(2)(4) JPY 69,137,094 561,894
------------
Total Loan Participations (Cost
$3,511,427) 3,580,042
- ----------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES - 0.8%
- ----------------------------------------------------------------------
San Joaquin Hills, CA
Transportation Corridor Agency Toll
Road Capital Appreciation Revenue
Bonds, Jr. Lien, Zero Coupon, 9%,
1/1/28 (Cost $852,871)(6) 12,500,000 1,699,375
- ----------------------------------------------------------------------
CORPORATE BONDS AND NOTES - 65.7%
- ----------------------------------------------------------------------
BASIC INDUSTRY - 6.0%
- ----------------------------------------------------------------------
CHEMICALS - 1.6%
Harris Chemical North America,
Inc.:
10.25% Gtd. Sr. Sec. Disc. Nts.,
7/15/01 30,000 31,125
10.75% Gtd. Sr. Sub. Nts., 10/15/03 160,000 164,000
- ----------------------------------------------------------------------
ICO, Inc., 10.375% Sr. Nts.,
6/1/07(3) 250,000 258,125
- ----------------------------------------------------------------------
NL Industries, Inc.:
0%/13% Sr. Sec. Disc. Nts.,
10/15/05(8) 765,000 727,706
11.75% Sr. Sec. Nts., 10/15/03 200,000 218,750
- ----------------------------------------------------------------------
Pioneer Americas Acquisition Corp.,
9.25% Sr. Nts., 6/15/07(3) 575,000 569,250
- ----------------------------------------------------------------------
Polytama International, 11.25% Gtd.
Sec. Nts., 6/15/07 450,000 466,875
- ----------------------------------------------------------------------
Sterling Chemical Holdings, Inc.,
0%/13.50% Sr. Disc. Nts.,
8/15/08(8) 600,000 399,000
- ----------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.25% Sr. Sub. Nts., 4/1/07(3) 100,000 106,500
11.75% Sr. Unsec. Sub. Nts.,
8/15/06 475,000 515,375
------------
3,456,706
- ----------------------------------------------------------------------
CONTAINERS - 0.7%
Consumers International, Inc.,
10.25% Sr. Sec. Nts., 4/1/05(3) 375,000 405,000
- ----------------------------------------------------------------------
IVEX Holdings Corp., 0%/13% Sr.
Disc. Debs., Series B, 3/15/05(8) 1,225,000 992,250
- ----------------------------------------------------------------------
Ivex Packaging Corp., 12.50% Sr.
Sub. Nts., 12/15/02 100,000 109,000
------------
1,506,250
- ----------------------------------------------------------------------
METALS/MINING - 0.7%
Carbide/Graphite Group, Inc. (The),
11.50% Sr. Nts., 9/1/03 454,000 497,130
- ----------------------------------------------------------------------
Royal Oak Mines, Inc., 11% Sr. Sub.
Nts., 8/15/06 1,000,000 960,000
------------
1,457,130
</TABLE>
16
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C> <C>
PAPER - 2.5%
APP International Finance Co. BV,
11.75% Gtd. Sec. Nts., 10/1/05 $ 1,400,000 $ 1,545,250
- ----------------------------------------------------------------------
Asia Pulp & Paper International
Finance Co., Zero Coupon Asian
Currency Nts.:
18.656%, 12/8/97(6) IDR 500,000,000 192,964
14.25%, 9/17/97(6) IDR 2,200,000,000 878,948
- ----------------------------------------------------------------------
Gaylord Container Corp., 9.75% Sr.
Nts., 6/15/07(3) 100,000 100,250
- ----------------------------------------------------------------------
Indah Kiat International Finance
Co. BV, 11.875% Gtd. Sr. Sec. Nts.,
6/15/02 1,070,000 1,183,687
- ----------------------------------------------------------------------
Repap New Brunswick, Inc., 9.125%
First Priority Sr. Sec. Nts.,
7/15/00(2) 150,000 149,250
- ----------------------------------------------------------------------
Repap Wisconsin, Inc.:
9.25% First Priority Sr. Sec. Nts.,
2/1/02 850,000 860,625
9.875% Second Priority Sr. Nts.,
5/1/06 225,000 228,375
- ----------------------------------------------------------------------
Stone Container Corp., 9.875% Sr.
Nts., 2/1/01 250,000 250,000
------------
5,389,349
- ----------------------------------------------------------------------
STEEL - 0.5%
AK Steel Corp., 9.125% Sr. Nts.,
12/15/06 600,000 619,500
- ----------------------------------------------------------------------
Algoma Steel, Inc., 12.375% First
Mtg. Nts., 7/15/05 75,000 83,437
- ----------------------------------------------------------------------
Bar Technologies, Inc., 13.50% Sr.
Sec. Nts., 4/1/01 450,000 466,875
------------
1,169,812
- ----------------------------------------------------------------------
CONSUMER RELATED - 8.6%
- ----------------------------------------------------------------------
CONSUMER PRODUCTS - 3.4%
Coleman Escrow Corp., Zero Coupon
Sr. First Priority Disc. Nts.,
11.125%, 5/15/01(3)(6) 575,000 366,562
- ----------------------------------------------------------------------
E & S Holdings Corp., 10.375% Sr.
Sub. Nts., 10/1/06 550,000 576,125
- ----------------------------------------------------------------------
Harman International Industries,
Inc., 12% Sr. Sub. Nts., 8/1/02 1,650,000 1,765,500
- ----------------------------------------------------------------------
Icon Fitness Corp., 0%/14% Sr.
Disc. Nts., 11/15/06(4)(8) 800,000 438,000
- ----------------------------------------------------------------------
Icon Health & Fitness, Inc., 13%
Sr. Sub. Nts., Series B, 7/15/02 400,000 452,000
- ----------------------------------------------------------------------
IHF Holdings, Inc., 0%/15% Sr. Sub.
Disc. Nts., Series B, 11/15/04 1,050,000 882,000
- ----------------------------------------------------------------------
International Semi-Tech
Microelectronics, Inc., 0%/11.50%
Sr. Sec. Disc. Nts., 8/15/03(8) 335,000 199,325
- ----------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon
Sr. Sec. Disc. Nts.:
11.037%, 3/15/01(3)(6) 1,900,000 1,296,750
12.333%, 3/15/98(6) 350,000 333,375
- ----------------------------------------------------------------------
TAG Heuer International SA, 12% Sr.
Sub. Nts., 12/15/05 350,000 402,500
- ----------------------------------------------------------------------
Williams (J. B.) Holdings, Inc.,
12% Sr. Nts., 3/1/04 600,000 609,000
------------
7,321,137
- ----------------------------------------------------------------------
FOOD/BEVERAGES/TOBACCO - 0.5%
CFP Holdings, Inc., 11.625% Gtd.
Sr. Nts., 1/15/04(3) 415,000 431,600
- ----------------------------------------------------------------------
Foodbrands America, Inc., 10.75%
Sr. Sub. Nts., 5/15/06(4) 235,000 272,600
- ----------------------------------------------------------------------
Windy Hill Pet Food, Inc., 9.75%
Sr. Sub. Nts., 5/15/07(3) 300,000 301,500
------------
1,005,700
</TABLE>
17
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C> <C>
HEALTHCARE - 0.7%
Genesis Health Ventures, Inc.,
9.25% Sr. Sub. Nts., 10/1/06 $ 760,000 $ 786,600
- ----------------------------------------------------------------------
Integrated Health Services, Inc.:
11% Sr. Sub. Nts., 4/30/06(2)(3) 35,000 37,450
9.50% Sr. Sub. Nts., 9/15/07(6) 600,000 616,500
------------
1,440,550
- ----------------------------------------------------------------------
HOTEL/GAMING - 1.8%
Boyd Gaming Corp., 9.25% Sr. Nts.,
10/1/03 575,000 577,875
- ----------------------------------------------------------------------
Capital Gaming International, Inc.,
Promissory Nts., 8/1/95(9) 9,500 --
- ----------------------------------------------------------------------
Grupo Posadas SA de CV, 10.375%
Bonds, 2/13/02(4) 125,000 128,984
- ----------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Nts., 6/15/07(3) 925,000 936,562
- ----------------------------------------------------------------------
Mohegan Tribal Gaming Authority,
13.50% Sr. Sec. Nts., Series B,
11/15/02 700,000 920,500
- ----------------------------------------------------------------------
Rio Hotel & Casino, Inc., 9.50%
Gtd. Sr. Sub. Nts., 4/15/07 250,000 258,125
- ----------------------------------------------------------------------
Showboat Marina Casino
Partnership/Showboat Marina Finance
Corp., 13.50% First Mtg. Nts.,
Series B, 3/15/03 950,000 1,087,750
------------
3,909,796
- ----------------------------------------------------------------------
RESTAURANTS - 1.1%
Ameriking, Inc., 10.75% Sr. Nts.,
12/1/06 705,000 738,487
- ----------------------------------------------------------------------
Carrols Corp., 11.50% Sr. Nts.,
8/15/03 430,000 460,100
- ----------------------------------------------------------------------
Foodmaker, Inc.:
9.25% Sr. Nts., 3/1/99 200,000 206,000
9.75% Sr. Sub. Nts., 6/1/02 950,000 986,812
------------
2,391,399
- ----------------------------------------------------------------------
TEXTILE/APPAREL - 1.1%
CMI Industries, Inc., 9.50% Sr.
Sub. Nts., 10/1/03(4) 240,000 243,000
- ----------------------------------------------------------------------
GFSI, Inc., 9.625% Sr. Sub. Nts.,
3/1/07(3) 305,000 309,575
- ----------------------------------------------------------------------
Polysindo International Finance Co.
BV, 11.375% Gtd. Sec. Nts., 6/15/06 1,100,000 1,212,750
- ----------------------------------------------------------------------
Tultex Corp., 9.625% Sr. Nts.,
4/15/07(3) 150,000 159,094
- ----------------------------------------------------------------------
William Carter Co., 10.375% Sr.
Sub. Nts., 12/1/06 350,000 368,375
------------
2,292,794
- ----------------------------------------------------------------------
ENERGY - 5.6%
- ----------------------------------------------------------------------
Belden & Blake Corp., 9.875% Sr.
Sub. Nts., 6/15/07(3) 1,100,000 1,097,250
- ----------------------------------------------------------------------
BP America, Inc., 10.875% Nts.,
8/1/01 CAD 350,000 299,054
- ----------------------------------------------------------------------
Chesapeake Energy Corp., 9.125% Sr.
Nts., 4/15/06 475,000 477,375
- ----------------------------------------------------------------------
Clark R&M Holdings, Inc., Zero
Coupon Sr. Sec. Nts., Series A,
10.565%, 2/15/00(6) 1,400,000 1,067,500
- ----------------------------------------------------------------------
Cross Timbers Oil Co., 9.25% Sr.
Sub. Nts., 4/1/07 200,000 205,000
- ----------------------------------------------------------------------
DI Industries, Inc., 8.875% Sr.
Nts., 7/1/07 400,000 396,000
- ----------------------------------------------------------------------
Energy Corp. of America, 9.50% Sr.
Sub. Nts., 5/15/07(3) 500,000 497,500
- ----------------------------------------------------------------------
Forcenergy, Inc., 9.50% Sr. Sub.
Nts., 11/1/06 100,000 104,000
</TABLE>
18
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
ENERGY (CONTINUED)
<S> <C> <C> <C>
- ----------------------------------------------------------------------
J. Ray McDermott SA, 9.375% Sr.
Sub. Bonds, 7/15/06 $ 1,600,000 $ 1,652,000
- ----------------------------------------------------------------------
Mariner Energy, Inc., 10.50% Sr.
Sub. Nts., 8/1/06 925,000 966,625
- ----------------------------------------------------------------------
Maxus Energy Corp., 11.50% Debs.,
11/15/15 800,000 843,000
- ----------------------------------------------------------------------
Mesa Operating Co.:
0%/11.625% Gtd. Sr. Sub. Disc.
Nts., 7/1/06(8) 300,000 232,500
10.625% Gtd. Sr. Sub. Nts., 7/1/06 960,000 1,096,800
- ----------------------------------------------------------------------
Parker Drilling Corp., 9.75% Gtd.
Sr. Nts., 11/15/06 600,000 634,500
- ----------------------------------------------------------------------
Petroleum Heat & Power Co., Inc.,
9.375% Sub. Debs., 2/1/06 1,150,000 1,098,250
- ----------------------------------------------------------------------
Pogo Producing Co., 8.75% Sub.
Nts., 5/15/07(3) 910,000 913,412
- ----------------------------------------------------------------------
Statia Terminals
International/Statia Terminals
(Canada), Inc., 11.75% First Mtg.,
Series B, 11/15/03 225,000 238,500
- ----------------------------------------------------------------------
Wiser Oil Co., 9.50% Sr. Sub. Nts.,
5/15/07(3) 400,000 402,000
------------
12,221,266
- ----------------------------------------------------------------------
FINANCIAL SERVICES - 5.5%
- ----------------------------------------------------------------------
BANKS & THRIFTS - 1.1%
First Nationwide Holdings, Inc.,
10.625% Sr. Sub. Nts., 10/1/03 750,000 832,500
- ----------------------------------------------------------------------
Ocwen Financial Corp., 11.875%
Nts., 10/1/03 800,000 876,000
- ----------------------------------------------------------------------
Ongko International Finance Co. BV,
10.50% Gtd. Nts., 3/29/04(3) 200,000 206,433
- ----------------------------------------------------------------------
Shoshone Partners Trust, 8% Sr.
Nts., 5/31/02(2)(4) 466,000 466,645
------------
2,381,578
- ----------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 3.5%
Aames Financial Corp., 9.125% Sr.
Nts., 11/1/03 1,000,000 1,025,000
- ----------------------------------------------------------------------
Americredit Corp., 9.25% Sr. Nts.,
2/1/04 600,000 591,000
- ----------------------------------------------------------------------
Amresco, Inc., 10% Sr. Sub. Nts.,
Series 97-A, 3/15/04 600,000 612,000
- ----------------------------------------------------------------------
Cityscape Financial Corp., 12.75%
Sr. Nts., 6/1/04(3) 1,300,000 1,287,000
- ----------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts.,
6/10/02(4) 117,970 130,210
- ----------------------------------------------------------------------
Olympic Financial Ltd., Units (each
unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07
and one warrant to purchase 6.84
shares of common stock)(10) 850,000 877,625
- ----------------------------------------------------------------------
PT Polysindo Eka Perkasa, Zero
Coupon Promissory Nts., 9.374%,
7/28/98(6) 1,000,000 901,859
- ----------------------------------------------------------------------
Saul (B.F.) Real Estate Investment
Trust, 11.625% Sr. Sec. Nts.,
Series B, 4/1/02 1,200,000 1,278,000
- ----------------------------------------------------------------------
Wilshire Financial Services Group,
Inc., 13% Nts., 1/1/04 850,000 862,750
------------
7,565,444
- ----------------------------------------------------------------------
INSURANCE - 0.9%
Residential Reinsurance, 11.951%
Nts., 12/15/98(2)(11) 1,000,000 1,005,750
- ----------------------------------------------------------------------
Veritas Holdings, Inc., 9.625% Sr.
Nts., 12/15/03(3) 1,000,000 1,035,000
------------
2,040,750
</TABLE>
19
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C> <C>
HOUSING RELATED - 1.2%
- ----------------------------------------------------------------------
BUILDING MATERIALS - 0.4%
American Builders & Contractors
Supply, Inc., 10.625% Sr. Sub.
Nts., 5/15/07(3) $ 200,000 $ 207,000
- ----------------------------------------------------------------------
Building Materials Corp. of
America, 8.625% Sr. Nts., 12/15/06 265,000 270,300
- ----------------------------------------------------------------------
Falcon Building Products, Inc.,
9.50% Sr. Sub. Nts., 6/15/07(3) 185,000 185,000
- ----------------------------------------------------------------------
Nortek, Inc., 9.25% Sr. Nts.,
3/15/07 200,000 205,000
------------
867,300
- ----------------------------------------------------------------------
HOMEBUILDERS/REAL ESTATE - 0.8%
Continental Homes Holding Corp.,
10% Gtd. Unsec. Bonds, 4/15/06 80,000 82,800
- ----------------------------------------------------------------------
First Place Tower, Inc.:
9.22% First Mtg. Bonds, 12/15/05 CAD 300,400 250,201
Units (each unit consists of one
$10 principal amount of 8.50% cv.
sub. debs., 12/15/15 and 40 common
shares)(10) CAD 180,660 339,664
- ----------------------------------------------------------------------
Greystone Homes, Inc., 10.75% Sr.
Nts., 3/1/04 280,000 303,800
- ----------------------------------------------------------------------
Hovnanian K. Enterprises, Inc.,
11.25% Gtd. Sub. Nts., 4/15/02 200,000 209,000
- ----------------------------------------------------------------------
Standard Pacific Corp., 8.50% Sr.
Nts., 6/15/07 385,000 385,962
- ----------------------------------------------------------------------
U.S. Home Corp., 9.75% Sr. Nts.,
6/15/03 100,000 104,500
------------
1,675,927
- ----------------------------------------------------------------------
MANUFACTURING - 5.4%
- ----------------------------------------------------------------------
AEROSPACE - 2.7%
America West Airlines, Inc., 10.75%
Sr. Nts., 9/1/05 1,700,000 1,765,875
- ----------------------------------------------------------------------
Atlas Air, Inc., 12.25%
Pass-Through Certificates,
12/1/02(4) 950,000 1,054,500
- ----------------------------------------------------------------------
Continental Airlines, Inc., 9.50%
Sr. Unsec. Nts., 12/15/01 70,000 73,500
- ----------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd.
Nts., 12/15/98 1,500,000 1,533,750
- ----------------------------------------------------------------------
Northwest Airlines Corp.:
8.70% Nts., 3/15/07 50,000 51,508
8.375% Gtd. Nts., 3/15/04 100,000 101,530
- ----------------------------------------------------------------------
Pegasus Aircraft Lease
Securitization Trust, 11.76% Sr.
Nts., Cl. A, 6/15/04(4) 350,000 353,045
- ----------------------------------------------------------------------
Rohr, Inc., 11.625% Sr. Nts.,
5/15/03 800,000 892,000
------------
5,825,708
- ----------------------------------------------------------------------
AUTOMOTIVE - 1.0%
Aftermarket Technology Corp., 12%
Sr. Sub. Nts., Series B, 8/1/04 300,000 334,500
- ----------------------------------------------------------------------
Hayes Wheels International, Inc.:
11% Sr. Sub. Nts., 7/15/06 700,000 771,750
9.125% Sr. Sub. Nts., 7/15/07(4) 300,000 300,375
- ----------------------------------------------------------------------
Lear Corp., 9.50% Sub. Nts.,
7/15/06 300,000 319,500
- ----------------------------------------------------------------------
Oxford Automotive, Inc., 10.125%
Sr. Sub. Nts., 6/15/07(3) 300,000 300,375
- ----------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts.,
Series B, 3/1/04 110,000 110,550
------------
2,137,050
- ----------------------------------------------------------------------
CAPITAL GOODS - 1.7%
Clark-Schwebel, Inc., 10.50% Sr.
Nts., 4/15/06 725,000 775,750
</TABLE>
20
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
CAPITAL GOODS (CONTINUED)
<S> <C> <C> <C>
Communications & Power Industries,
Inc., 12% Sr. Sub. Nts., Series B,
8/1/05 $ 1,050,000 $ 1,144,500
- ----------------------------------------------------------------------
Consorcio Ecuatoriano, 14% Nts.,
5/1/02(4) 170,000 180,625
- ----------------------------------------------------------------------
Farley, Inc., Zero Coupon Sub.
Debs., 14.143%, 12/30/12(4)(6) 198,000 24,152
- ----------------------------------------------------------------------
International Wire Group, Inc.,
11.75% Sr. Sub. Nts., 6/1/05(4) 265,000 287,525
- ----------------------------------------------------------------------
Mettler Toledo, Inc., 9.75% Gtd.
Sr. Sub. Nts., 10/1/06 850,000 896,750
- ----------------------------------------------------------------------
Roller Bearing Co. (America),
9.625% Sr. Sub. Nts., 6/15/07(3) 160,000 162,400
- ----------------------------------------------------------------------
Synthetic Industries, Inc., 9.25%
Sr. Sub. Nts., 2/15/07(3) 170,000 174,250
- ----------------------------------------------------------------------
Titan Wheel International, Inc.,
8.75% Sr. Sub. Nts., 4/1/07 150,000 153,750
------------
3,799,702
- ----------------------------------------------------------------------
MEDIA - 8.9%
- ----------------------------------------------------------------------
BROADCASTING - 2.5%
Argyle Television, Inc., 9.75% Sr.
Sub. Nts., 11/1/05 200,000 210,000
- ----------------------------------------------------------------------
Capstar Broadcasting Partners,
Inc., 9.25% Sr. Sub. Nts.,
7/1/07(3) 300,000 291,750
- ----------------------------------------------------------------------
Chancellor Radio Broadcasting Co.,
8.75% Sr. Sub. Nts., 6/15/07(3) 450,000 447,750
- ----------------------------------------------------------------------
Jacor Communications Co., 8.75%
Gtd. Sr. Sub. Nts., 6/15/07(3) 500,000 497,500
- ----------------------------------------------------------------------
Outlet Broadcasting, Inc., 10.875%
Sr. Sub. Nts., 7/15/03(12) 1,000,000 1,083,743
- ----------------------------------------------------------------------
Paxson Communications Corp.,
11.625% Sr. Sub. Nts., 10/1/02 495,000 538,312
- ----------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts.,
5/15/04(3)(7) 400,000 358,000
- ----------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
10% Sr. Sub. Nts., 9/30/05 100,000 103,500
9% Sr. Sub. Nts., 7/15/07(3) 300,000 291,375
- ----------------------------------------------------------------------
Summit Communications Group, Inc.,
10.50% Sr. Sub. Debs., 4/15/05(4) 850,000 915,875
- ----------------------------------------------------------------------
Young Broadcasting, Inc.:
8.75% Sr. Sub. Debs., 6/15/07(3) 300,000 287,250
9% Sr. Sub. Nts., Series B, 1/15/06 425,000 418,625
------------
5,443,680
- ----------------------------------------------------------------------
CABLE TELEVISION - 3.2%
Cablevision Industries Corp., 9.25%
Sr. Debs., Series B, 4/1/08 600,000 647,393
- ----------------------------------------------------------------------
Cablevision Systems Corp.:
10.50% Sr. Sub. Debs., 5/15/16 250,000 276,250
10.75% Sr. Sub. Debs., 4/1/04 500,000 515,355
9.875% Sr. Sub. Nts., 5/15/06 100,000 107,250
- ----------------------------------------------------------------------
EchoStar Communications Corp.,
0%/12.875% Sr. Disc. Nts.,
6/1/04(8) 200,000 169,000
- ----------------------------------------------------------------------
EchoStar DBS Corp., 12.50% Gtd.
Nts., 7/1/02(3) 1,000,000 995,000
- ----------------------------------------------------------------------
EchoStar Satellite Broadcasting
Corp., 0%/13.125% Sr. Sec. Disc.
Nts., 3/15/04(8) 340,000 243,950
- ----------------------------------------------------------------------
Helicon Group LP/Helicon Capital
Corp., 11% Sr. Sec. Nts., Series B,
11/1/03(2) 885,000 924,825
- ----------------------------------------------------------------------
Optel, Inc., Units (each unit
consists of $1,000 principal amount
of 13% sr. nts., 2/15/05 and one
warrant to purchase one share of
non-vtg. common stock)(3)(10) 700,000 672,000
</TABLE>
21
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
CABLE TELEVISION (CONTINUED)
<S> <C> <C> <C>
Panamsat LP/Panamsat Capital Corp.,
0%/11.375% Sr. Sub. Disc. Nts.,
8/1/03(8) $ 850,000 $ 827,688
- ----------------------------------------------------------------------
Rogers Cablesystems Ltd., 10%
Second Priority Sr. Sec. Debs.,
12/1/07 200,000 215,000
- ----------------------------------------------------------------------
TCI Satellite Entertainment, Inc.:
0%/10.875% Sr. Sub. Nts.,
2/15/07(3)(8) 900,000 535,500
10.875% Sr. Sub. Nts., 2/15/07(3) 470,000 474,700
- ----------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr.
Debs., 10/30/07 300,000 330,206
------------
6,934,117
- ----------------------------------------------------------------------
DIVERSIFIED MEDIA - 1.7%
Ackerley Communications, Inc.,
10.75% Sr. Sec. Nts., Series A,
10/1/03 750,000 806,250
- ----------------------------------------------------------------------
GSP I Corp., 10.15% First Mtg.
Bonds, 6/24/10(3) 471,719 435,213
- ----------------------------------------------------------------------
Heritage Media Corp., 8.75% Sr.
Sub. Nts., 2/15/06 160,000 165,600
- ----------------------------------------------------------------------
Katz Media Corp., 10.50% Sr. Sub.
Nts., 1/15/07 475,000 467,875
- ----------------------------------------------------------------------
Lamar Advertising Co., 9.625% Sr.
Sub. Nts., 12/1/06 815,000 839,450
- ----------------------------------------------------------------------
Outdoor Systems, Inc., 8.875% Sr.
Sub. Nts., 6/15/07(3) 400,000 390,500
- ----------------------------------------------------------------------
Universal Outdoor, Inc.:
9.75% Sr. Sub. Nts., 10/15/06 365,000 379,600
9.75% Sr. Sub. Nts., Series B,
10/15/06 250,000 260,000
------------
3,744,488
- ----------------------------------------------------------------------
ENTERTAINMENT/FILM - 1.2%
Azteca Holdings SA, 11% Sr. Nts.,
6/15/02(3) 830,000 842,450
- ----------------------------------------------------------------------
Imax Corp., 10% Sr. Nts., 3/1/01 1,600,000 1,684,000
------------
2,526,450
- ----------------------------------------------------------------------
PUBLISHING/PRINTING - 0.3%
Hollinger International Publishing,
Inc., 9.25% Gtd. Sr. Sub. Nts.,
3/15/07 200,000 205,000
- ----------------------------------------------------------------------
Sun Media Corp., 9.50% Sr. Sub.
Nts., 2/15/07(3) 350,000 355,250
------------
560,250
- ----------------------------------------------------------------------
OTHER - 1.9%
- ----------------------------------------------------------------------
CONGLOMERATES - 0.1%
Cia Latino Americana de
Infraestructura & Servicios SA -
CLISA, 11.625% Gtd. Sr. Nts.,
6/1/04(3) 70,000 74,200
- ----------------------------------------------------------------------
Maxxam Group, Inc., 0%/12.25% Sr.
Sec. Disc. Nts., 8/1/03(8) 100,000 92,500
------------
166,700
- ----------------------------------------------------------------------
ENVIRONMENTAL - 0.1%
Allied Waste Industries, Inc.,
0%/11.30% Sr. Disc. Nts.,
6/1/07(3)(8) 450,000 283,500
- ----------------------------------------------------------------------
SERVICES - 1.7%
Borg-Warner Security Corp., 9.625%
Sr. Sub. Nts., 3/15/07(3) 100,000 101,250
- ----------------------------------------------------------------------
Coinstar, Inc., 0%/13% Sr. Disc.
Nts., 10/1/06(4)(8) 750,000 517,500
- ----------------------------------------------------------------------
Neodata Services, Inc., 12% Sr.
Nts., Series B, 5/1/03 400,000 432,000
- ----------------------------------------------------------------------
Protection One Alarm Monitoring,
Inc.:
0%/13.625% Sr. Disc. Nts.,
6/30/05(8) 550,000 572,000
6.75% Cv. Gtd. Sr. Sub. Nts.,
9/15/03 950,000 967,813
</TABLE>
22
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
SERVICES (CONTINUED)
<S> <C> <C> <C>
Road King Infrastructure Finance
(1997) Ltd., 9.50% Gtd. Unsec.
Unsub. Bonds, 7/15/07(4)(11) $ 1,000,000 $ 1,007,500
------------
3,598,063
- ----------------------------------------------------------------------
RETAIL - 2.4%
- ----------------------------------------------------------------------
SPECIALTY RETAILING - 0.9%
Brylane LP/Brylane Capital Corp.,
10% Sr. Sub. Nts., Series B, 9/1/03 500,000 533,750
- ----------------------------------------------------------------------
Central Termica Guemes, 12% Bonds,
11/26/01(4) 200,000 209,500
- ----------------------------------------------------------------------
Eye Care Centers of America, Inc.,
12% Sr. Nts., 10/1/03 630,000 696,150
- ----------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625%
Sr. Nts., 5/1/03(4) 95,000 101,175
- ----------------------------------------------------------------------
Profitt's, Inc., 8.125% Sr. Nts.,
5/15/04(3) 200,000 201,500
- ----------------------------------------------------------------------
Specialty Retailers, Inc., 8.50%
Gtd. Sr. Nts., 7/15/05(3) 200,000 202,500
------------
1,944,575
- ----------------------------------------------------------------------
SUPERMARKETS - 1.5%
Grand Union Co., 12% Sr. Nts.,
9/1/04 20,000 14,900
- ----------------------------------------------------------------------
Jitney-Jungle Stores of America,
Inc., 12% Gtd. Sr. Nts., 3/1/06 565,000 632,094
- ----------------------------------------------------------------------
Ralph's Grocery Co.:
(New), 11% Sr. Sub. Nts.,
6/15/05(3) 150,000 163,500
10.45% Sr. Nts., 6/15/04 50,000 53,938
10.45% Sr. Nts., 6/15/04 1,100,000 1,186,625
- ----------------------------------------------------------------------
Randall's Food Markets, 9.375% Sr.
Sub. Nts., 7/1/07(3) 700,000 696,500
- ----------------------------------------------------------------------
Smith's Food & Drug Centers, Inc.,
11.25% Sr. Unsec. Sub. Nts.,
5/15/07 520,000 612,950
------------
3,360,507
- ----------------------------------------------------------------------
TECHNOLOGY - 16.2%
- ----------------------------------------------------------------------
INFORMATION TECHNOLOGY - 8.6%
Amphenol Corp., 9.875% Sr. Sub.
Nts., 5/15/07 275,000 285,313
- ----------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/13%
Sr. Disc. Nts., 6/15/05(4)(8) 800,000 568,000
- ----------------------------------------------------------------------
Cellular Communications
International, Inc., Zero Coupon
Sr. Disc. Nts., 11.908%, 8/15/00(6) 3,600,000 2,763,000
- ----------------------------------------------------------------------
Cellular, Inc., 0%/11.75% Sr. Sub.
Disc. Nts., 9/1/03(8) 2,000,000 1,950,000
- ----------------------------------------------------------------------
Comunicacion Celular SA, 0%/13.125%
Sr. Deferred Coupon Bonds,
11/15/03(8) 1,575,000 1,130,063
- ----------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts.,
3/1/07(3) 600,000 607,500
- ----------------------------------------------------------------------
Geotek Communications, Inc., 0%/15%
Sr. Sec. Disc. Nts., 7/15/05(8) 1,650,000 1,031,250
- ----------------------------------------------------------------------
Globalstar LP/Globalstar Capital
Corp., 11.25% Sr. Nts., 6/15/04(3) 500,000 471,250
- ----------------------------------------------------------------------
Metrocall, Inc., 10.375% Sr. Sub.
Nts., 10/1/07 700,000 644,000
- ----------------------------------------------------------------------
Millicom International Cellular SA,
0%/13.50% Sr. Disc. Nts., 6/1/06(8) 800,000 580,000
- ----------------------------------------------------------------------
Occidente y Caribe Celular SA,
0%/14% Sr. Disc. Nts., Series B,
3/15/04(8) 300,000 226,500
- ----------------------------------------------------------------------
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 450,000 434,250
11.625% Sr. Nts., Series A, 8/15/06 345,000 332,925
- ----------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital
Corp., 14% Sr. Nts., 8/15/04 1,180,000 1,197,700
</TABLE>
23
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
INFORMATION TECHNOLOGY (CONTINUED)
<S> <C> <C> <C>
PriCellular Wireless Corp.:
0%/12.25% Sr. Sub. Disc. Nts.,
10/1/03(8) $ 500,000 $ 472,500
0%/14% Sr. Sub. Disc. Nts.,
11/15/01(8) 1,750,000 1,846,250
10.75% Sr. Nts., 11/1/04 425,000 448,375
- ----------------------------------------------------------------------
Real Time Data, Inc., Units (each
unit consists of $1,000 principal
amount of 0%/13.50% sub. disc.
nts., 8/15/06 and one warrant to
purchase six ordinary
shares)(4)(8)(10) 1,900,000 1,083,000
- ----------------------------------------------------------------------
Therma-Wave, Inc., 10.625% Sr.
Nts., 5/15/04(3) 200,000 213,000
- ----------------------------------------------------------------------
Tracor, Inc., 8.50% Sr. Sub. Nts.,
3/1/07 300,000 303,750
- ----------------------------------------------------------------------
Unisys Corp., 11.75% Sr. Nts.,
10/15/04 250,000 271,250
- ----------------------------------------------------------------------
USA Mobile Communications, Inc. II:
14% Sr. Nts., 11/1/04 650,000 721,500
9.50% Sr. Nts., 2/1/04 650,000 611,000
- ----------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub.
Nts., 6/15/07(3) 475,000 489,844
------------
18,682,220
- ----------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
7.6%
American Communications Services,
Inc., 0%/12.75% Sr. Disc. Nts.,
4/1/06(8) 390,000 214,500
- ----------------------------------------------------------------------
Bell Cablemedia plc:
0%/11.875% Sr. Disc. Nts.,
9/15/05(8) 1,100,000 924,000
0%/11.95% Sr. Disc. Nts.,
7/15/04(8) 1,700,000 1,547,000
- ----------------------------------------------------------------------
Brooks Fiber Properties, Inc.:
0%/10.875% Sr. Disc. Nts.,
3/1/06(8) 550,000 377,438
0%/11.875% Sr. Disc. Nts.,
11/1/06(8) 1,150,000 753,250
10% Sr. Nts., 6/1/07(3) 1,175,000 1,195,563
- ----------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec.
Nts., 3/15/04(4)(8) 1,025,000 937,875
- ----------------------------------------------------------------------
Colt Telecom Group plc, Units (each
unit consists of $1,000 principal
amount of 0%/12% sr. disc. nts.,
12/15/06 and one warrant to
purchase 7.8 ordinary
shares)(8)(10) 1,570,000 1,028,350
- ----------------------------------------------------------------------
Comcast UK Cable Partner Ltd.,
0%/11.20% Sr. Disc. Debs.,
11/15/07(8) 575,000 438,438
- ----------------------------------------------------------------------
Diamond Cable Communications plc,
0%/11.75% Sr. Disc. Nts.,
12/15/05(8) 1,985,000 1,349,800
- ----------------------------------------------------------------------
GST Telecommunications, Inc.,
0%/13.875% Cv. Sr. Sub. Disc. Nts.,
12/15/05(3)(8) 178,000 106,133
- ----------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Bonds,
12/15/05(8) 555,000 345,488
- ----------------------------------------------------------------------
ICG Holdings, Inc., 0%/13.50% Sr.
Disc. Nts., 9/15/05(8) 1,870,000 1,346,400
- ----------------------------------------------------------------------
International CableTel, Inc.,
0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(9) 475,000 331,313
- ----------------------------------------------------------------------
McLeod, Inc., 0%/10.50% Sr. Disc.
Nts., 3/1/07(3)(8) 810,000 520,425
- ----------------------------------------------------------------------
MFS Communications Co., Inc.:
0%/8.875% Sr. Disc. Nts.,
1/15/06(8) 250,000 198,750
0%/9.375% Sr. Disc. Nts.,
1/15/04(8) 600,000 561,000
</TABLE>
24
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY
(CONTINUED)
<S> <C> <C> <C>
NTL, Inc.:
0%/10.875% Sr. Deferred Coupon
Nts., 10/15/03(8) $ 100,000 $ 87,250
10% Sr. Nts., 2/15/07(3) 400,000 409,000
- ----------------------------------------------------------------------
Petersburg Long Distance, Inc.:
9% Cv. Sub. Nts., 6/1/06(3) 170,000 167,238
Units (each unit consists of $1,000
principal amount of 0%/14% sr.
disc. nts., 6/1/04 and one warrant
to purchase 34 ordinary
shares)(4)(8)(10) 1,150,000 971,750
- ----------------------------------------------------------------------
PTC International Finance BV,
0%/10.75% Gtd. Sr. Sub. Unsec.
Bonds, 7/1/07(4)(8) 425,000 259,250
- ----------------------------------------------------------------------
Teleport Communications Group,
Inc.:
0%/11.125% Sr. Disc. Nts.,
7/1/07(8) 1,575,000 1,139,906
9.875% Sr. Nts., 7/1/06 300,000 321,000
- ----------------------------------------------------------------------
Telesystem International Wireless,
Inc., 0%/13.25% Sr. Disc. Nts.,
6/30/07(3)(8) 235,000 125,725
- ----------------------------------------------------------------------
Telewest Communications plc, 0%/11%
Sr. Disc. Debs., 10/1/07(8) 590,000 427,750
- ----------------------------------------------------------------------
UNIFI Communications, Inc., Units
(each unit consists of $1,000
principal amount of 14% sr. nts.,
3/1/04 and one warrant to purchase
27.52 ordinary shares)(3)(10) 260,000 258,700
- ----------------------------------------------------------------------
Videotron Holdings plc, 0%/11% Sr.
Disc. Nts., 8/15/05(8) 250,000 210,000
------------
16,553,292
- ----------------------------------------------------------------------
TRANSPORTATION - 1.9%
- ----------------------------------------------------------------------
RAILROADS - 1.1%
TFM SA de CV, 0%/11.75% Gtd. Sr.
Disc. Bonds, 6/15/09(3)(8) 665,000 387,363
- ----------------------------------------------------------------------
Transtar Holdings LP/Transtar
Capital Corp., 0%/13.375% Sr. Disc.
Nts., Series B, 12/15/03(8) 2,425,000 2,049,125
------------
2,436,488
- ----------------------------------------------------------------------
TRUCKING - 0.8%
Coach USA, Inc., 9.375% Gtd. Sr.
Sub. Nts., 7/1/07(3) 650,000 646,750
- ----------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50%
Nts., Series 1993-A, 12/1/11(3) 700,000 579,831
- ----------------------------------------------------------------------
Western Star Truck Holdings Ltd.,
8.75% Sr. Nts., 5/1/07(3) 500,000 515,000
------------
1,741,581
- ----------------------------------------------------------------------
UTILITIES - 2.1%
- ----------------------------------------------------------------------
ELECTRIC UTILITIES - 2.1%
CalEnergy, Inc., 9.50% Sr. Nts.,
9/15/06 300,000 321,750
- ----------------------------------------------------------------------
California Energy, Inc., 10.25% Sr.
Disc. Nts., 1/15/04 550,000 595,375
- ----------------------------------------------------------------------
Calpine Corp.:
10.50% Sr. Nts., 5/15/06 190,000 207,100
9.25% Sr. Nts., 2/1/04 135,000 137,700
- ----------------------------------------------------------------------
El Paso Electric Co., 9.40% First
Mtg. Bonds, Series E, 5/1/11 800,000 874,000
- ----------------------------------------------------------------------
First PV Funding Corp.:
10.15% Lease Obligation Bonds,
Series 1986B, 1/15/16 208,000 221,780
10.15% Lease Obligation Bonds,
Series 1986B, 1/15/16 2,000 2,000
10.30% Lease Obligation Bonds,
Series 1986A, 1/15/14 725,000 773,031
- ----------------------------------------------------------------------
Panda Global Energy Co., 12.50% Sr.
Nts., 4/15/04(3) 850,000 833,000
</TABLE>
25
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
ELECTRIC UTILITIES (CONTINUED)
<S> <C> <C> <C>
Subic Power Corp., 9.50% Sr. Sec.
Nts., 12/28/08 $ 620,689 $ 645,561
------------
4,611,297
------------
Total Corporate Bonds and Notes
(Cost $137,612,802) 142,442,556
SHARES
- ----------------------------------------------------------------------
COMMON STOCKS - 1.0%
- ----------------------------------------------------------------------
Celcaribe SA(4)(13) 121,950 365,850
- ----------------------------------------------------------------------
Cellnet Data Systems, Inc.(13) 4,800 59,700
- ----------------------------------------------------------------------
ECM Fund, L.P.I.(4) 150 150,563
- ----------------------------------------------------------------------
EchoStar Communications Corp., Cl.
A(13) 4,000 62,500
- ----------------------------------------------------------------------
Equitable Bag, Inc.(3)(13) 3,723 18,615
- ----------------------------------------------------------------------
GST Telecommunications, Inc.(13) 1,200 12,150
- ----------------------------------------------------------------------
Grand Union Co.(13) 20,511 46,150
- ----------------------------------------------------------------------
Gulfstream Holding, Inc.(13) 56 --
- ----------------------------------------------------------------------
J. Ray McDermott SA(13) 10,965 296,055
- ----------------------------------------------------------------------
Omnipoint Corp.(4)(13) 46,875 740,332
- ----------------------------------------------------------------------
Triangle Wire & Cable, Inc.(4)(13) 21,111 21,111
- ----------------------------------------------------------------------
Vail Resorts, Inc.(13) 14,010 354,628
- ----------------------------------------------------------------------
Walter Industries, Inc.(13) 6,455 108,121
------------
Total Common Stocks (Cost
$2,155,448) 2,235,775
- ----------------------------------------------------------------------
PREFERRED STOCKS - 7.6%
- ----------------------------------------------------------------------
California Federal Bank:
10.625% Non-Cum., Series B 9,500 1,047,375
11.50% Non-Cum., Non-Vtg. 6,000 666,000
- ----------------------------------------------------------------------
CGA Group Ltd., Preferred(4)(13) 62,000 1,550,000
- ----------------------------------------------------------------------
CRIIMI MAE, Inc., 10.875% Cum. Cv.
Preferred Stock, Series B 38,000 1,372,750
- ----------------------------------------------------------------------
Earthwatch, Inc., 12% Cv. Sr.
Preferred Stock, Series C(4)(13) 90,000 936,000
- ----------------------------------------------------------------------
El Paso Electric Co., 11.40% Series
A Preferred Stock(5) 8,556 964,689
- ----------------------------------------------------------------------
Fidelity Federal Bank, 12% Non-Cum.
Exchangeable Perpetual Preferred
Stock, Series A(4) 20,700 579,600
- ----------------------------------------------------------------------
Fresenius Medical Care Trust, 9%
Preferred Securities(14) 2,460,000 2,558,400
- ----------------------------------------------------------------------
Glendale Federal Bank, F.S.B.,
8.75% Non-Cum. Cv., Series E 16,500 1,072,500
- ----------------------------------------------------------------------
K-III Communications Corp., $11.625
Exchangeable, Series B(4)(5) 8,668 938,311
- ----------------------------------------------------------------------
Kelley Oil & Gas Corp., $2.625 Cv. 15,300 371,025
- ----------------------------------------------------------------------
Navistar International Corp., $6.00
Cv., Series G 2,500 152,812
- ----------------------------------------------------------------------
NEXTLINK Communications, Inc., 14%
Sr. Exchangeable Preferred(5)(13) 16,495 870,111
- ----------------------------------------------------------------------
Panamsat Corp., 12.75% Sr.
Preferred Exchangeable(5) 1,543 1,892,104
- ----------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv.,
Series B 14,500 344,375
</TABLE>
26
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
<S> <C> <C> <C>
- ----------------------------------------------------------------------
PREFERRED STOCKS (CONTINUED)
- ----------------------------------------------------------------------
Walden Residential Properties,
Inc.:
Preferred Stock 13,000 $ 338,000
9.16% Cv. Preferred Stock, Series B 30,000 870,000
------------
Total Preferred Stocks (Cost
$14,759,763) 16,524,052
- ----------------------------------------------------------------------
OTHER SECURITIES - 1.5%
- ----------------------------------------------------------------------
BankUnited Capital Trust, 10.25%
Redeemable Trust Preferred
Securities 750,000 744,375
- ----------------------------------------------------------------------
Pantry Pride, Inc., $14.875
Exchangeable, Series B 2,000 200,875
- ----------------------------------------------------------------------
SD Warren Co., 14% Cum.
Exchangeable, Series B(13) 8,000 346,000
- ----------------------------------------------------------------------
SDW Holdings Corp., 15% Cum. Sr.
Exchangeable Preferred(3)(13) 40,200 1,447,200
- ----------------------------------------------------------------------
WorldCom, Inc., 8% Cv. Depositary
Shares each Representing 1/100
Share of Dividend Enhanced
Convertible Stock 5,000 563,750
------------
Total Other Securities (Cost
$2,761,726) 3,302,200
UNITS
- ----------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.5%
- ----------------------------------------------------------------------
American Communications Services,
Inc. Wts., Exp. 11/05(4) 475 23,750
- ----------------------------------------------------------------------
American Telecasting, Inc. Wts.,
Exp. 6/99(4) 6,000 3,030
- ----------------------------------------------------------------------
Ames Department Stores, Inc.,
Litigation Trust(4) 39,658 396
- ----------------------------------------------------------------------
Australis Media Ltd. Wts., Exp.
5/00(4) 125 1
- ----------------------------------------------------------------------
Capital Gaming International, Inc.
Wts., Exp. 2/99(4) 21,112 --
- ----------------------------------------------------------------------
Cellular Communications
International, Inc. Wts., Exp.
8/03(4) 2,920 43,800
- ----------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49(4) 62,000 31,000
- ----------------------------------------------------------------------
Coinstar, Inc. Wts., Exp. 11/03(4) 750 52,500
- ----------------------------------------------------------------------
Comunicacion Celular SA Wts., Exp.
11/03(4) 875 48,125
- ----------------------------------------------------------------------
Eye Care Centers of America, Inc.
Wts., Exp. 10/03(4) 630 3,150
- ----------------------------------------------------------------------
Foamex LP/JPS Automotive Corp.
Wts., Exp. 7/99(4) 500 12,500
- ----------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp.
11/02 14,410 115,280
- ----------------------------------------------------------------------
Geotek Communications, Inc. Wts.,
Exp. 7/05(4) 52,500 105,000
- ----------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp.
9/05(4) 5,940 47,520
- ----------------------------------------------------------------------
IHF Capital, Inc., Series I Wts.,
Exp. 11/99(4) 400 22,000
- ----------------------------------------------------------------------
IHF Holdings, Inc. Wts., Exp.
11/99(4) 250 37,500
- ----------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp.
8/02 950 --
- ----------------------------------------------------------------------
Jewel Recovery LP, Participation
Units of Limited Partners' Interest 2,360 --
- ----------------------------------------------------------------------
NEXTLINK Communications, Inc. Wts.,
Exp. 2/09(4) 16,000 160
- ----------------------------------------------------------------------
Occidente y Caribe Celular SA Wts.,
Exp. 3/04(4) 1,200 12,000
- ----------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00(4) 7,500 118,453
- ----------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 11/03(4) 28,000 206,500
Exp. 6/05(4) 1,600 11,800
- ----------------------------------------------------------------------
SDW Holdings Corp., Cl. B Wts.,
Exp. 12/06(4) 3,750 48,750
</TABLE>
27
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
UNITS NOTE 1
<S> <C> <C> <C>
- ----------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES
(CONTINUED)
- ----------------------------------------------------------------------
Trizec Corp. Wts., Exp. 7/99 3,970 $ 16,835
- ----------------------------------------------------------------------
United International Holdings, Inc.
Wts., Exp. 11/99(4) 1,440 7,200
- ----------------------------------------------------------------------
Venezuela Oil Linked Certificates
Wts., Exp. 4/20 1,785 --
------------
Total Rights, Warrants and
Certificates (Cost $311,493) 967,250
PRINCIPAL
AMOUNT(1)
- ----------------------------------------------------------------------
STRUCTURED INSTRUMENTS - 4.7%
- ----------------------------------------------------------------------
Bayerische Landesbank Girozentrale
(New York Branch):
Deutsche Mark Currency Protected
Yield Curve CD, 6.28%, 7/25/97 $ 300,000 312,765
Nikkei 225 Equity-Linked Nts.,
6.03%, 4/23/98 700,000 771,470
Lehman Brothers High Yield Bond
Index Nts., 12.50%, 8/7/97 400,000 409,240
- ----------------------------------------------------------------------
Canadian Imperial Bank of Commerce
(New York Branch):
U.S. Dollar CD Linked to South
African Rand, 17%, 1/21/98 200,000 206,260
CD, 11.25%, 9/4/97 (indexed to the
Russian Federation GKO, Zero
Coupon, 8/27/97)(4) 1,100,000 1,097,250
- ----------------------------------------------------------------------
Credit Suisse First Boston (Cayman)
Ltd., City of Moscow, Credit &
Convertibility Linked Nts., Series
EM 215, Zero Coupon, 11.111%,
12/30/97(6)(11) 450,000 426,393
- ----------------------------------------------------------------------
Daiwa Finance Corp. (New York),
Daiwa Physical Commodity Excess
Return Index Linked Nts., 4.719%,
8/21/97(2) 800,000 699,920
- ----------------------------------------------------------------------
ING (U.S.) Financial Holdings
Corp.:
Nts., Linked to the Greek
Drachma/Swiss Franc Exchange Rate,
Zero Coupon, 14.232%, 12/10/97(6) 285,000 259,706
Nts., Linked to the Greek
Drachma/Swiss Franc Exchange Rate,
Zero Coupon, 14.536%, 12/8/97(6) 600,000 544,818
Zero Coupon Nts., Linked to the
Greek Drachma/Swiss Franc Exchange
Rate, 13.838%, 10/8/97(6) 1,600,000 1,497,536
U.S. Dollar Hedged GKO Pass-Through
Nts., Zero Coupon, 12.664%,
12/3/97(4)(7) 850,000 801,499
- ----------------------------------------------------------------------
Lehman Brothers Holdings, Inc. U.S.
Dollar Nts. Linked to the Greek
Drachma/Swiss Franc Exchange Rate,
Zero Coupon:
25.055%, 12/23/97(6) 400,000 421,160
10.612%, 12/26/97(6) 400,000 420,520
25.567%, 12/30/97(6) 200,000 209,300
- ----------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
13.866%, 5/22/98(6) 1,850,000 1,623,690
- ----------------------------------------------------------------------
Standard Chartered Bank, Korean
Wong Principal & Interest Linked
Deposit:
8.04%, 12/17/97 100,000 99,450
8.63%, 6/30/98 450,000 445,995
------------
Total Structured Instruments (Cost
$10,333,432) 10,246,972
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DATE STRIKE CONTRACTS
- ------------------------------------------------------------------------
PUT OPTIONS PURCHASED - 0.0%
- ------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds,
Buoni del Tesoro Poliennali, 9.50%,
2/1/06 Put Opt. (Cost $16,476) 7/97 99.96% ITL 480 --
</TABLE>
28
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------
REPURCHASE AGREEMENTS - 3.7%
- ------------------------------------------------------------------
Repurchase agreement with Zion
First National Bank, 5.95%, dated
6/30/97, to be repurchased at
$8,101,339 on 7/1/97,
collateralized by U.S. Treasury
Bonds, 12.50%, 8/15/14, with a
value of $2,050,650 and U.S.
Treasury Nts., 5.125%-7.25%,
5/31/98-8/15/04, with a value of
$6,220,122 (Cost $8,100,000) $8,100,000 $ 8,100,000
- ------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$217,955,147) 104.8% 227,330,762
- ------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (4.8 ) (10,350,089 )
---------- ------------
NET ASSETS 100.0% $216,980,673
---------- ------------
---------- ------------
</TABLE>
1. Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C> <C> <C> <C> <C>
ARP - Argentine Peso JPY - Japanese Yen
CAD - Canadian Dollar MXP - Mexican Peso
GBP - British Pound Sterling PLZ - Polish Zloty
GRD - Greek Drachma ZAR - South African Rand
IDR - Indonesian Rupiah
</TABLE>
2. Represents the current interest rate for a variable rate security.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $36,873,098 or 16.99% of the Fund's net
assets, at June 30, 1997.
4. Identifies issues considered to be illiquid or restricted - See Note 7 of
Notes to Financial Statements.
5. Interest or dividend is paid in kind.
6. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
7. Represents the current interest rate for an increasing rate security.
8. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
9. Non-income producing - issuer is in default of interest payment.
10. 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.
11. When-issued security to be delivered and settled after June 30, 1997.
12. Securities with an aggregate market value of $1,604,413 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
13. Non-income producing security.
14. A sufficient amount of securities has been designated to cover outstanding
written call options, as follows:
<TABLE>
<CAPTION>
CONTRACTS
SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE
TO CALL DATE PRICE RECEIVED NOTE 1
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Mexican Peso Call Option 2,200,000 7/21/97 7.955 MXP $ 21,670 $ 30,360
</TABLE>
See accompanying Notes to Financial Statements.
29
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- -----------------------------------------------------------------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS - 56.1%
- -----------------------------------------------------------------
GOVERNMENT AGENCY - 45.0%
- -----------------------------------------------------------------
FHLMC/FNMA/SPONSORED - 35.1%
Federal Home Loan Mortgage Corp.:
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 151, Cl. F,
9%, 5/15/21 $ 1,000,000 $ 1,078,338
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1712, Cl. B,
6%, 3/15/09 1,000,000 934,370
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1714, Cl. M,
7%, 8/15/23 2,000,000 1,939,360
Gtd. Multiclass Mtg. Participation
Certificates, 7%, 4/1/26 4,943,877 4,861,562
Interest-Only Stripped Mtg.-Backed
Security, Series 177, Cl. B,
12.298%, 7/1/26(2) 3,759,278 1,341,005
Interest-Only Stripped Mtg.-Backed
Security, Series 177, Cl. B,
12.022%, 7/1/26(2) 6,723,270 2,398,317
Interest-Only Stripped Mtg.-Backed
Security, Series 177, Cl. B,
13.01%, 7/1/26(2) 9,854,263 3,515,201
Interest-Only Stripped Mtg.-Backed
Security, Series 177, Cl. B,
11.33%, 7/1/26(2) 25,247,985 9,006,430
Interest-Only Stripped Mtg.-Backed
Security, Series 177, Cl. B,
12.349%, 7/1/26(2) 3,091,533 1,102,808
- -----------------------------------------------------------------
Government National Mortgage Assn.,
Gtd. Multiclass Mtg. Participation
Certificates, Series 26, Cl. B, 6%,
5/25/15 6,499,999 6,088,769
- -----------------------------------------------------------------
Federal National Mortgage Assn.:
6.50%, 3/1/11 876,680 861,023
7%, 11/1/25 1,252,813 1,229,862
7%, 4/1/04 309,618 310,767
7%, 7/1/12(3) 17,850,000 17,810,908
7%, 7/25/27(3) 9,200,000 9,013,148
7.50%, 1/1/08 299,018 304,840
7.50%, 1/1/26 4,780,444 4,800,905
7.50%, 4/1/08 249,165 254,016
7.50%, 7/1/27(3) 49,025,000 49,132,365
7.50%, 7/25/12(3) 21,900,000 22,214,922
8%, 5/1/17 768,409 793,890
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
8.75%, 11/25/05 3,000,000 3,134,531
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1989-17, Cl. E, 10.40%,
4/25/19 1,383,605 1,502,942
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1997-25, Cl. B, 7%, 12/18/22 1,370,000 1,341,452
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1997-5, Cl. B, 7%, 9/18/17 3,667,000 3,600,619
Interest-Only Stripped Mtg.-Backed
Security, Trust 272, Cl. 2, 7.50%,
7/1/26(2) 3,084,508 1,060,782
Principal-Only Stripped Mtg.-Backed
Security, Series 267, Cl. 1, 5.52%,
10/1/24(4) 7,702,126 5,656,249
------------
155,289,381
- -----------------------------------------------------------------
GNMA/GUARANTEED - 9.9%
Government National Mortgage Assn.:
6%, 7/20/27(3) 12,000,000 12,015,000
6.50%, 7/20/27(3) 9,000,000 9,104,062
6.875%, 10/20/24 2,213,488 2,269,866
6.875%, 10/20/25 4,349,536 4,456,230
7%, 1/15/09 323,214 325,719
</TABLE>
30
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- -----------------------------------------------------------------
GNMA/GUARANTEED (CONTINUED)
Government National Mortgage Assn.:
(Continued)
<S> <C> <C>
7%, 5/15/09 $ 337,740 $ 340,358
7.50%, 7/1/27(3) 9,000,000 9,025,290
7.50%, 7/15/26 6,097,415 6,124,793
------------
43,661,318
- -----------------------------------------------------------------
PRIVATE - 11.1%
- -----------------------------------------------------------------
COMMERCIAL - 6.5%
Asset Securitization Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1997-MD7, Cl.
A6, 8.243%, 1/13/30(5) 500,000 512,187
- -----------------------------------------------------------------
BKB Commercial Mortgage Trust,
Commercial Mtg. Obligations, Series
1997-C1, Cl. C, 7.45%, 10/25/00 815,000 821,112
- -----------------------------------------------------------------
Capital Lease Funding
Securitization LP, Interest-Only
Stripped Mtg.-Backed Security,
Series 1997-CTL1, 4.69%,
6/22/24(2)(6) 33,440,398 1,524,882
- -----------------------------------------------------------------
Commercial Mortgage Acceptance
Corp., Collateralized Mtg.
Obligation, Series 1996-C1, Cl. D,
7.65%, 12/25/20(5)(6) 2,500,000 2,497,656
- -----------------------------------------------------------------
Criimi Mae Financial Corp.,
Collateralized Mtg. Obligations,
Trust I, Cl. A-2, 7.56%, 8/30/05 2,000,000 1,986,250
- -----------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates:
Series 1994-C1, Cl. 2-D, 8.70%,
9/25/25(6) 1,500,000 1,561,406
Series 1994-C1, Cl. 2-E, 8.70%,
9/25/25(6) 1,500,000 1,563,750
- -----------------------------------------------------------------
Merrill Lynch Mortgage Investors,
Inc., Mtg. Pass-Through
Certificates, Series 1996-C1,
7.42%, 4/25/28 2,000,000 2,012,344
- -----------------------------------------------------------------
Morgan Stanley Capital I, Inc.,
Commercial Mtg. Pass-Through
Certificates, Series 1996-C1, Cl.
D-1, 7.51%, 2/15/28(5)(6) 1,000,000 1,007,500
- -----------------------------------------------------------------
NationsCommercial Corp., NB
Commercial Mtg. Pass-Through
Certificates:
Series-DMC, Cl. B, 8.562%,
8/12/11(6) 1,600,000 1,631,437
Series-DMC, Cl. C, 8.921%,
8/12/11(7) 3,500,000 3,626,602
- -----------------------------------------------------------------
Potomac Gurnee Financial Corp.,
Commercial Mtg. Pass-Through
Certificates:
Cl. C, 7.217%, 12/21/26(6) 250,000 250,118
Cl. D, 7.683%, 12/21/26(6) 500,000 502,970
- -----------------------------------------------------------------
Resolution Trust Corp., Commercial
Mtg. Pass-Through Certificates:
Series 1994-C1, Cl. C, 8%, 6/25/26 1,500,000 1,533,050
Series 1995-C1, Cl. D, 6.90%,
2/25/27 3,000,000 2,951,250
- -----------------------------------------------------------------
Structured Asset Securities Corp.,
Multiclass Pass-Through
Certificates:
Series 1996-C3, Cl. C, 7.375%,
6/25/30(5)(6) 3,000,000 3,008,438
Series 1996-CFL, Cl. D, 7.034%,
2/25/28 1,800,000 1,789,313
------------
28,780,265
- -----------------------------------------------------------------
MANUFACTURED HOUSING - 0.2%
Green Tree Financial Corp., Series
1994-6, Cl. A3, 7.70%, 1/15/20 1,000,000 1,010,930
- -----------------------------------------------------------------
MULTI-FAMILY - 0.7%
Countrywide Funding Corp., Mtg.
Pass-Through Certificates, Series
1993-12, Cl. B1, 6.625%, 2/25/24 1,000,000 927,891
- -----------------------------------------------------------------
Merrill Lynch Trust, Collateralized
Mtg. Obligations, Gtd. Multiclass
Mtg. Participation Certificates,
Series 43, Cl. E, 6.50%, 8/27/15 500,000 490,000
</TABLE>
31
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- -----------------------------------------------------------------
MULTI-FAMILY (CONTINUED)
<S> <C> <C>
Resolution Trust Corp., Commercial
Mtg. Pass-Through Certificates,
Series 1991-M5, Cl. A, 9%, 3/25/17 $ 1,696,577 $ 1,739,391
------------
3,157,282
- -----------------------------------------------------------------
OTHER - 0.0%
GE Capital Mortgage Services, Inc.,
Series 1994-14, Cl. A1, 6.50%,
4/25/24 103,526 103,170
- -----------------------------------------------------------------
Salomon Brothers Mortgage
Securities VI:
Interest-Only Stripped Mtg.-Backed
Security, Series 1987-3, Cl. B,
10.373%, 10/23/17(2) 91,452 29,636
Interest-Only Stripped Mtg.-Backed
Security, Series 1987-3, Cl. B,
10.373%, 10/23/17(2) 32,514 10,537
Principal-Only Stripped Mtg.-Backed
Security, Series 1987-3, Cl. A,
Zero Coupon, 8.061%, 10/23/17(4) 47,531 32,722
------------
176,065
- -----------------------------------------------------------------
RESIDENTIAL - 3.7%
Contimortgage Home Equity Loan
Trust, Series 1995-2, Cl. A2,
7.95%, 4/15/10 262,662 265,823
- -----------------------------------------------------------------
CS First Boston Mortgage Securities
Corp., Mtg. Pass-Through
Certificates, Series 1997-C1, Cl.
E, 7.50%, 6/20/29 4,500,000 4,479,611
- -----------------------------------------------------------------
First Chicago/Lennar Trust 1,
Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1,
8.13%, 7/25/06 4,024,000 4,103,851
- -----------------------------------------------------------------
First Union-Lehman Brothers
Commercial Mortgage Trust,
Interest-Only Stripped Mtg.
Pass-Through Certificates, Series
97-C1, Cl. E-3, 8.79%, 4/18/29 17,122,600 1,357,100
- -----------------------------------------------------------------
Morgan Stanley Capital I, Inc.,
Commercial Mtg. Pass-Through
Certificates:
Series 1997-HF1, Cl. E, 7.55%,
7/15/29 1,500,000 1,498,594
Series 1997-WF1, Cl. E, 7.49%,
5/15/09 2,000,000 1,991,250
- -----------------------------------------------------------------
NationsBank Trust, Lease
Pass-Through Certificates, Series
1997A-1, 7.442%, 1/10/11(5) 2,500,000 2,517,578
- -----------------------------------------------------------------
Ryland Mortgage Securities Corp.
III, Sub. Bonds, Series 1992-A, Cl.
1A, 8.284%, 3/29/30(5) 363,828 364,966
------------
16,578,773
------------
Total Mortgage-Backed Obligations
(Cost $246,477,376) 248,654,014
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 40.3%
- ----------------------------------------------------------------------
AGENCY - 0.1%
- ----------------------------------------------------------------------
Fannie Mae:
Sr. Unsub. Medium-Term Nts., 6.50%,
7/10/02(3) AUD 360,000 270,891
Medium-Term Nts., 7.25%, 6/20/02 NZD 385,000 262,361
------------
533,252
- ----------------------------------------------------------------------
TREASURY - 40.2%
- ----------------------------------------------------------------------
U.S. Treasury Bonds:
10.375%, 11/15/09 500,000 607,813
10.375%, 11/15/12 500,000 635,000
12.75%, 11/15/10 1,000,000 1,388,126
9.25%, 2/15/16(8)(9) 9,500,000 11,889,848
</TABLE>
32
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
<S> <C> <C> <C>
TREASURY (CONTINUED)
- ----------------------------------------------------------------------
U.S. Treasury Nts.:
5.125%, 11/30/98 $ 500,000 $ 494,532
5.75%, 8/15/03 470,000 453,991
5.875%, 4/30/98 2,500,000 2,503,127
6%, 12/31/97 3,000,000 3,007,503
6%, 8/31/97 49,817,000 49,863,726
6.375%, 3/31/01 1,500,000 1,503,282
6.375%, 8/15/02 500,000 499,844
6.50%, 10/15/06 28,840,000 28,722,851
6.50%, 4/30/99 500,000 503,906
6.50%, 5/15/05 6,000,000 5,992,506
6.50%, 8/15/05 10,500,000 10,477,036
6.75%, 6/30/99 22,150,000 22,426,895
6.875%, 3/31/00 500,000 508,281
7.25%, 5/15/04 1,000,000 1,042,501
7.25%, 8/15/04 12,750,000 13,295,865
7.50%, 11/15/01 3,150,000 3,283,878
7.50%, 2/15/05 12,000,000 12,701,256
7.875%, 1/15/98 1,900,000 1,923,157
7.875%, 11/15/04 2,000,000 2,158,126
9.25%, 8/15/98(10) 2,000,000 2,071,876
------------
177,954,926
------------
Total U.S. Government Obligations
(Cost $177,649,675) 178,488,178
- ----------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS -
4.5%
- ----------------------------------------------------------------------
Argentina (Republic of) Bonds,
Bonos de Consolidacion de Deudas,
Series I, 3.242%, 4/1/01(5)(11) ARP 530,995 485,504
- ----------------------------------------------------------------------
Bank Tabugan Negara Negotiable CD,
Zero Coupon, 12.882%, 2/18/98(12) IDR 5,000,000,000 1,887,209
- ----------------------------------------------------------------------
Bonos de la Tesoreria de la
Federacion, Zero Coupon:
23.663%, 2/4/98(12) MXP 6,481,720 720,855
22.519%, 3/5/98(12) MXP 20,000,000 2,189,951
- ----------------------------------------------------------------------
Canada (Government of):
Debs., 10.50%, 7/1/00 CAD 360,000 298,637
Treasury Bills, Zero Coupon,
2.827%, 9/18/97(12) CAD 75,000 54,128
- ----------------------------------------------------------------------
Financiera Energetica Nacional SA
Nts., 9.375%, 6/15/06 300,000 321,938
- ----------------------------------------------------------------------
Finland (Republic of) Bonds:
10%, 9/15/01 FIM 420,000 96,825
9.50%, 3/15/04 FIM 360,000 84,182
- ----------------------------------------------------------------------
Hong Kong & Shanghai Bank Banker's
Acceptance Bills, Zero Coupon,
7.02%, 7/8/97(12) MYR 2,315,000 916,617
- ----------------------------------------------------------------------
Italy (Republic of):
Sr. Unsec. Unsub. Global Bonds,
0.633%, 7/26/99(5) JPY 99,000,000 870,954
Treasury Bonds, Buoni del Tesoro
Poliennali, 9.50%, 5/1/01 ITL 565,000,000 368,089
- ----------------------------------------------------------------------
New Zealand (Government of):
Bonds, 10%, 3/15/02 NZD 720,000 550,084
Nts., 6.50%, 2/15/00 NZD 345,000 233,146
</TABLE>
33
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
<S> <C> <C> <C>
- ----------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS
(CONTINUED)
- ----------------------------------------------------------------------
Ontario, Canada (Province of)
Bonds, 8%, 10/17/01 $ 750,000 $ 788,273
- ----------------------------------------------------------------------
Poland (Republic of)
Bonds, 12%, 6/12/01 PLZ 5,140,000 1,260,269
Bonds, 12%, 6/12/02 PLZ 2,000,000 484,291
Portugal (Republic of) Bonds,
Obrigicion do tes Medio Prazo,
11.875%, 2/23/00 PTE 86,650,000 570,749
- ----------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts.:
Zero Coupon, 14.201%, 3/17/98(12) IDR 1,000,000,000 371,299
Zero Coupon, 14.091%, 4/8/98(12) IDR 2,000,000,000 736,294
- ----------------------------------------------------------------------
South Africa (Republic of):
Bonds, Series 162, 12.50%, 1/15/02 ZAR 13,336,000 2,768,318
Debs., 9.625%, 12/15/99 1,000,000 1,059,250
- ----------------------------------------------------------------------
Spain (Kingdom of) Gtd. Bonds,
Bonos y Obligacion del Estado,
12.25%, 3/25/00 ESP 58,000,000 463,779
- ----------------------------------------------------------------------
Sweden (Kingdom of) Bonds, Series
1030, 13%, 6/15/01 SEK 2,100,000 342,466
- ----------------------------------------------------------------------
Telkom SA Ltd. Bonds, Series TK05,
12%, 3/31/98 ZAR 1,130,000 243,401
- ----------------------------------------------------------------------
The Netherlands (Government of)
Bonds, 8.75%, 9/15/01 NLG 150,000 88,967
- ----------------------------------------------------------------------
Treasury Corp. of Victoria Gtd.
Bonds, 12.50%, 10/15/03 AUD 333,000 324,081
- ----------------------------------------------------------------------
United Kingdom Treasury Nts.,
12.50%, 11/21/05 GBP 380,000 802,401
- ----------------------------------------------------------------------
United Mexican States Bonds,
7.875%, 8/6/01(5)(7) 750,000 753,075
------------
Total Foreign Government
Obligations (Cost $20,426,610) 20,135,032
- ----------------------------------------------------------------------
LOAN PARTICIPATIONS - 0.3%
- ----------------------------------------------------------------------
Colombia (Republic of) 1989-1990
Integrated Loan Facility Bonds,
6.937%, 7/1/01 (Cost
$1,096,016)(5)(6) 1,163,362 1,125,553
- ----------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES - 0.4%
- ----------------------------------------------------------------------
Dade County, FL Educational
Facilities Authority:
Exchangeable Revenue Bonds,
University of Miami, Prerefunded,
MBIA Insured, 7.65%, 4/1/10 175,000 193,526
Revenue Bonds, University of Miami,
MBIA Insured, 7.65%, 4/1/10 205,000 224,395
Taxable Exchange Revenue Bonds,
University of Miami, MBIA Insured,
7.65%, 4/1/10 120,000 131,353
- ----------------------------------------------------------------------
Pinole, CA Redevelopment Agency Tax
Allocation Taxable Bonds, Pinole
Vista Redevelopment, Series B,
8.35%, 8/1/17 670,000 697,684
- ----------------------------------------------------------------------
Port of Portland, OR Special
Obligation Taxable Revenue Bonds,
PAMCO Project, 9.20%, 5/15/22 500,000 559,385
------------
Total Municipal Bonds and Notes
(Cost $1,664,213) 1,806,343
- ----------------------------------------------------------------------
CORPORATE BONDS AND NOTES - 21.2%
- ----------------------------------------------------------------------
BASIC INDUSTRY - 1.6%
- ----------------------------------------------------------------------
CHEMICALS - 0.5%
Quantum Chemical Corp., 10.375%
First Mtg. Nts., 6/1/03 2,100,000 2,243,753
- ----------------------------------------------------------------------
PAPER - 1.1%
Boise Cascade Corp., 9.90% Nts.,
3/15/00 750,000 806,779
</TABLE>
34
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ----------------------------------------------------------------------
PAPER (CONTINUED)
<S> <C> <C> <C>
Fletcher Challenge Capital Canada,
Inc., 7.75% Nts., 6/20/06 $ 1,800,000 $ 1,852,526
- ----------------------------------------------------------------------
Potlatch Corp., 9.46% Medium-Term
Nts., 4/2/02 500,000 552,141
- ----------------------------------------------------------------------
Scotia Pacific Holding Co., 7.95%
Timber Collateralized Nts., 7/20/15 1,445,741 1,455,515
------------
4,666,961
- ----------------------------------------------------------------------
CONSUMER RELATED - 2.2%
- ----------------------------------------------------------------------
CONSUMER PRODUCTS - 1.0%
Harman International Industries,
Inc., 7.32% Nts., 7/1/07 3,000,000 2,987,400
- ----------------------------------------------------------------------
Procter & Gamble Co., 9.36% Debs.,
1/1/21 500,000 606,205
- ----------------------------------------------------------------------
Toro Co., 7.125% Nts., 6/15/07 1,000,000 988,400
------------
4,582,005
- ----------------------------------------------------------------------
FOOD/BEVERAGES/TOBACCO - 0.2%
Bass America, Inc., 6.75% Gtd.
Nts., 8/1/99 750,000 755,413
- ----------------------------------------------------------------------
HEALTHCARE - 0.3%
Roche Holdings, Inc., 2.75% Bonds,
4/14/00 1,250,000 1,150,781
- ----------------------------------------------------------------------
HOTEL/GAMING - 0.5%
Circus Circus Enterprises, Inc.,
6.75% Nts., 7/15/03 375,000 368,352
- ----------------------------------------------------------------------
Hilton Hotels Corp., 7.95% Sr.
Nts., 4/15/07 2,000,000 2,049,712
------------
2,418,064
- ----------------------------------------------------------------------
TEXTILE/APPAREL - 0.2%
Fruit of the Loom, Inc., 7% Debs.,
3/15/11 1,097,000 1,023,039
- ----------------------------------------------------------------------
ENERGY - 1.7%
- ----------------------------------------------------------------------
BP America, Inc., 10.875% Nts.,
8/1/01 CAD 650,000 555,386
- ----------------------------------------------------------------------
Coastal Corp., 8.75% Sr. Nts.,
5/15/99 500,000 520,524
- ----------------------------------------------------------------------
Colorado International Gas Corp.,
10% Sr. Debs., 6/15/05 500,000 588,006
- ----------------------------------------------------------------------
Eastern Energy Ltd., 6.75% Nts.,
12/1/06(7) 2,000,000 1,941,718
- ----------------------------------------------------------------------
Enron Corp., 9.875% Debs., 6/15/03 375,000 429,411
- ----------------------------------------------------------------------
HNG Internorth/Enron Corp., 9.625%
Debs., 3/15/06 500,000 581,755
- ----------------------------------------------------------------------
McDermott, Inc., 9.375% Nts.,
3/15/02 400,000 418,010
- ----------------------------------------------------------------------
Mitchell Energy & Development
Corp., 9.25% Sr. Nts., 1/15/02 1,000,000 1,064,842
- ----------------------------------------------------------------------
Texaco Capital, Inc., 8.875% Gtd.
Debs., 9/1/21 500,000 579,731
- ----------------------------------------------------------------------
TransCanada PipeLines Ltd., 9.875%
Debs., 1/1/21 750,000 924,465
------------
7,603,848
</TABLE>
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------
FINANCIAL SERVICES - 8.3%
- -----------------------------------------------------------------
BANKS & THRIFTS - 3.4%
Banco Ganadero SA, 9.75%
Medium-Term Nts., 8/26/99(7) 250,000 263,438
- -----------------------------------------------------------------
BankAmerica Corp., 7.75% Sub. Nts.,
7/15/02 750,000 779,010
- -----------------------------------------------------------------
BankAmerica Institute, 8.07% Gtd.
Bonds, Series A, 12/31/26(6) 2,000,000 2,004,330
- -----------------------------------------------------------------
Chase Manhattan Corp. (New),
10.125% Sub. Nts., 11/1/00 750,000 827,173
- -----------------------------------------------------------------
Citicorp Capital I, 7.933% Gtd.
Bonds, 2/15/27 2,000,000 2,000,404
- -----------------------------------------------------------------
Deutsche Bank Financial, Inc.,
6.70% Gtd. Nts., 12/13/06 2,000,000 1,946,700
</TABLE>
35
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- -----------------------------------------------------------------
BANKS & THRIFTS (CONTINUED)
<S> <C> <C>
First Chicago Corp.:
11.25% Sub. Nts., 2/20/01 $ 750,000 $ 856,811
9% Sub. Nts., 6/15/99 150,000 157,028
- -----------------------------------------------------------------
First Fidelity Bancorporation,
8.50% Sub. Capital Nts., 4/1/98 850,000 864,308
- -----------------------------------------------------------------
Mellon Capital II, 7.995% Gtd.
Capital Securities Bonds, Series B,
1/15/27 3,000,000 2,998,164
- -----------------------------------------------------------------
Suntrust Banks, Inc., 8.875% Debs.,
2/1/98 500,000 508,429
- -----------------------------------------------------------------
Swiss Bank Corp., 7.25% Sub. Nts.,
9/1/06 2,000,000 2,023,372
------------
15,229,167
- -----------------------------------------------------------------
DIVERSIFIED FINANCIAL - 3.5%
Allied-Lyons Finance BV, 6.50%
Debs., 8/26/97 500,000 500,175
- -----------------------------------------------------------------
American General Finance Corp.,
5.875% Sr. Nts., 7/1/00 196,000 192,440
- -----------------------------------------------------------------
Countrywide Funding Corp., 6.57%
Gtd. Medium-Term Nts., Series A,
8/4/97 196,000 196,183
- -----------------------------------------------------------------
Fleet Mtg. Group, Inc., 6.50% Nts.,
9/15/99 500,000 500,120
- -----------------------------------------------------------------
Ford Motor Credit Co., 6.75% Nts.,
8/15/08 1,000,000 966,193
- -----------------------------------------------------------------
Household Finance Corp., 8.95%
Debs., 9/15/99 500,000 524,895
- -----------------------------------------------------------------
Household International BV, 6% Gtd.
Sr. Nts., 3/15/99 131,000 129,905
- -----------------------------------------------------------------
HSBC Americas Capital Trust II,
8.38% Capital Securities,
5/15/27(7) 3,000,000 3,059,388
- -----------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.875%
Nts., 3/1/03 750,000 752,047
- -----------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co., 7% Debs., 10/1/13 1,000,000 959,856
- -----------------------------------------------------------------
Norsk Hydro AS, 8.75% Bonds,
10/23/01 1,000,000 1,070,625
- -----------------------------------------------------------------
Penske Truck Leasing Co. LP, 7.75%
Sr. Nts., 5/15/99 1,000,000 1,025,978
- -----------------------------------------------------------------
Salomon, Inc., 7.30% Nts., 5/15/02 1,000,000 1,008,031
- -----------------------------------------------------------------
U.S. Leasing International, Inc.:
6.625% Sr. Nts., 5/15/03 750,000 738,878
7% Nts., 11/1/97 750,000 752,629
- -----------------------------------------------------------------
Washington Mutual Capital I, 8.375%
Gtd. Bonds, 6/1/27 3,000,000 3,047,751
------------
15,425,094
- -----------------------------------------------------------------
INSURANCE - 1.4%
Aetna Services, Inc., 7.125% Nts.,
8/15/06 1,000,000 998,729
- -----------------------------------------------------------------
Allmerica Capital I, 8.207% Debs.,
2/3/27(7) 2,000,000 2,019,166
- -----------------------------------------------------------------
Prudential Insurance Co. of
America, 7.65% Surplus Nts.,
7/1/07(7) 3,000,000 3,043,851
- -----------------------------------------------------------------
SunAmerica, Inc., 9% Sr. Nts.,
1/15/99 196,000 202,855
------------
6,264,601
- -----------------------------------------------------------------
MANUFACTURING - 0.3%
- -----------------------------------------------------------------
AUTOMOTIVE - 0.3%
Chrysler Corp., 10.95% Debs.,
8/1/17 800,000 848,251
- -----------------------------------------------------------------
Johnson Controls, Inc., 7.70%
Debs., 3/1/15 500,000 522,518
------------
1,370,769
- -----------------------------------------------------------------
MEDIA - 3.7%
- -----------------------------------------------------------------
CABLE TELEVISION - 2.0%
Cablevision Industries Corp., 9.25%
Sr. Debs., Series B, 4/1/08 4,000,000 4,315,956
</TABLE>
36
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- -----------------------------------------------------------------
CABLE TELEVISION (CONTINUED)
<S> <C> <C>
Panamsat LP/Panamsat Capital Corp.,
0%/11.375% Sr. Sub. Disc. Nts.,
8/1/03(13) $ 2,000,000 $ 1,947,500
- -----------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr.
Debs., 10/30/07 2,200,000 2,421,511
------------
8,684,967
- -----------------------------------------------------------------
DIVERSIFIED MEDIA - 1.4%
GSP I Corp., 10.15% First Mtg.
Bonds, 6/24/10(7) 1,121,594 1,034,795
- -----------------------------------------------------------------
News America Holdings, Inc.,
10.125% Gtd. Sr. Debs., 10/15/12 500,000 563,428
- -----------------------------------------------------------------
Time Warner Entertainment LP/Time
Warner, Inc., 8.375% Sr. Debs.,
3/15/23 4,295,000 4,413,932
------------
6,012,155
- -----------------------------------------------------------------
ENTERTAINMENT/FILM - 0.1%
Columbia Pictures Entertainment,
Inc., 9.875% Sr. Sub. Nts., 2/1/98 500,000 510,771
- -----------------------------------------------------------------
PUBLISHING/PRINTING - 0.2%
Reed Elsevier, Inc., 6.625% Nts.,
10/15/23(7) 600,000 530,478
- -----------------------------------------------------------------
Reed Publishing (USA), Inc., 7.66%
Medium-Term Nts., 2/19/99 500,000 510,000
------------
1,040,478
- -----------------------------------------------------------------
OTHER - 0.5%
- -----------------------------------------------------------------
CONGLOMERATES - 0.3%
Tenneco, Inc. (New):
10.20% Debs., 3/15/08 400,000 488,053
8.075% Nts., 10/1/02 650,000 684,108
------------
1,172,161
- -----------------------------------------------------------------
SERVICES - 0.2%
Archer Daniels Midland Co., 7.125%
Debs., 3/1/13 750,000 758,350
- -----------------------------------------------------------------
TECHNOLOGY - 0.4%
- -----------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
0.4%
Bell Cablemedia plc, 0%/11.95% Sr.
Disc. Nts., 7/15/04(13) 2,100,000 1,911,000
- -----------------------------------------------------------------
TRANSPORTATION - 0.3%
- -----------------------------------------------------------------
RAILROADS - 0.3%
Kansas City Southern Industries,
Inc., 6.625% Nts., 3/1/05 750,000 730,101
- -----------------------------------------------------------------
Union Pacific Corp., 9.65%
Medium-Term Nts., 4/17/00 400,000 429,268
------------
1,159,369
- -----------------------------------------------------------------
UTILITIES - 2.2%
- -----------------------------------------------------------------
ELECTRIC UTILITIES - 1.0%
Cleveland Electric Illuminating
Co./Toledo Edison Co., 7.13% Nts.,
7/1/07(7) 3,000,000 3,060,000
- -----------------------------------------------------------------
Long Island Lighting Co., 7% Nts.,
3/1/04 150,000 147,915
- -----------------------------------------------------------------
Public Service Co. of Colorado,
8.75% First Mtg. Bonds, 3/1/22 750,000 799,197
- -----------------------------------------------------------------
South Carolina Electric & Gas Co.,
9% Mtg. Bonds, 7/15/06 500,000 561,502
------------
4,568,614
- -----------------------------------------------------------------
GAS UTILITIES - 0.6%
Consolidated Natural Gas Co.,
6.625% Debs., 12/1/13 1,000,000 940,651
- -----------------------------------------------------------------
National Fuel Gas Co., 7.75% Debs.,
2/1/04 500,000 516,622
- -----------------------------------------------------------------
Texas Gas Transmission Corp.,
8.625% Nts., 4/1/04 500,000 542,012
</TABLE>
37
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- -----------------------------------------------------------------
GAS UTILITIES (CONTINUED)
<S> <C> <C>
Washington Gas Light Co., 8.75%
First Mtg. Bonds, 7/1/19 $ 500,000 $ 521,484
------------
2,520,769
- -----------------------------------------------------------------
TELEPHONE UTILITIES - 0.6%
Alltel Corp., 6.50% Debs., 11/1/13 1,000,000 921,678
- -----------------------------------------------------------------
GTE Corp.:
8.85% Debs., 3/1/98 750,000 763,593
9.375% Debs., 12/1/00 500,000 541,561
- -----------------------------------------------------------------
Northern Telecom Ltd., 6.875% Nts.,
10/1/02 500,000 502,375
------------
2,729,207
------------
Total Corporate Bonds and Notes
(Cost $93,810,611) 93,801,336
SHARES
- -----------------------------------------------------------------
PREFERRED STOCKS - 0.7%
- -----------------------------------------------------------------
Allstate Financing I, 7.95% Gtd.
Quarterly Income Preferred
Securities, Series A (Cost
$3,000,000) 120,000 3,000,000
PRINCIPAL
AMOUNT(1)
- -----------------------------------------------------------------
STRUCTURED INSTRUMENTS - 2.1%
- -----------------------------------------------------------------
Bayerische Landesbank (New York
Branch) CD, 13.75%, 8/18/97
(indexed to the cross currency
rates of Greek Drachma & Swiss
Franc) $ 250,000 238,725
- -----------------------------------------------------------------
Bayerische Landesbank Girozentrale
(New York Branch) Deutsche Mark
Currency Protected Yield Curve CD,
6.28%, 7/25/97 150,000 156,382
- -----------------------------------------------------------------
Canadian Imperial Bank of Commerce
(New York Branch) U.S. Dollar CD
Linked to South African Rand, 17%,
1/21/98 500,000 515,650
- -----------------------------------------------------------------
Canadian Imperial Bank of Commerce
(New York Branch) Canadian Dollar
Three Month Banker's Acceptance
Linked Maximum Rate Nts., 8.66%,
4/13/98 500,000 499,800
- -----------------------------------------------------------------
Canadian Imperial Bank of Commerce
(New York Branch) CD, 11.25%,
9/4/97 (indexed to the Russian
Federation GKO, Zero Coupon,
8/27/97)(6) 2,000,000 1,995,000
- -----------------------------------------------------------------
Canadian Imperial Bank of Commerce
(New York Branch) Three Month
British Pound LIBOR Forward Linked
Nts., 5.79%, 5/22/98 500,000 500,500
- -----------------------------------------------------------------
Daiwa Finance Corp. (New York),
Daiwa Physical Commodity Excess
Return Index Linked Nts., 4.719%,
8/21/97(5) 1,000,000 874,900
- -----------------------------------------------------------------
ING (U.S.) Financial Holdings Corp.
U.S. Dollar Denominated
Pass-Through Nts. Linked to
Malaysian Ringgit, Zero Coupon,
7.13%, 10/14/97(12) 250,000 243,048
- -----------------------------------------------------------------
Lehman Brothers Holdings, Inc.
Greek Drachma/Swiss Franc Linked
Nts., Zero Coupon, 14.709%,
1/15/98(12) 800,000 799,440
- -----------------------------------------------------------------
Lehman Brothers Holdings, Inc. U.S.
Dollar Nts. Linked to the Greek
Drachma/ Swiss Franc Exchange Rate,
Zero Coupon, 25.635%, 12/23/97(12) 500,000 526,450
- -----------------------------------------------------------------
Lehman Brothers Holdings, Inc. U.S.
Dollar Nts. Linked to the Greek
Drachma/ Swiss Franc Exchange Rate,
Zero Coupon, 22.869%, 12/26/97(12) 500,000 525,650
- -----------------------------------------------------------------
Lehman Brothers Holdings, Inc. U.S.
Dollar Nts. Linked to the Greek
Drachma/ Swiss Franc Exchange Rate,
Zero Coupon, 26.092%, 12/30/97(12) 1,000,000 1,046,500
</TABLE>
38
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
<S> <C> <C>
- -----------------------------------------------------------------
STRUCTURED INSTRUMENTS (CONTINUED)
- -----------------------------------------------------------------
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)(6) $ 1,000,000 $ 1,177,600
- -----------------------------------------------------------------
Morgan Guaranty Trust Co. of New
York, Japanese Government Bond 193
Currency Protected Bank Nts.,
8.14%, 4/29/98 10,000 10,383
- -----------------------------------------------------------------
Standard Chartered Bank, Korean
Wong Principal & Interest Linked
Deposit, 8.04%, 12/17/97 250,000 248,625
------------
Total Structured Instruments (Cost
$9,430,176) 9,358,653
</TABLE>
<TABLE>
<CAPTION>
DATE STRIKE CONTRACTS
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALL OPTIONS PURCHASED - 0.0%
- -------------------------------------------------------------------------------------
U.S. Treasury Nts., 6.625%, 5/15/07
Call Opt., (Cost $159,908) 9/97 100.563% 13,600 133,875
- -------------------------------------------------------------------------------------
PUT OPTIONS PURCHASED - 0.0%
- -------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds,
Buoni del Tesoro Poliennali, 9.50%,
2/1/06 Put Opt. 7/97 99.96 ITL 1,700 --
- -------------------------------------------------------------------------------------
New Zealand Dollar Put Opt. 8/97 1.460 NZD 605,000 7,151
- -------------------------------------------------------------------------------------
New Zealand Dollar Put Opt. 8/97 1.465 NZD 240,000 2,448
------------
Total Put Options Purchased (Cost
$63,574) 9,599
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(1)
- --------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS - 1.4%
- --------------------------------------------------------------------------
Repurchase agreement with J.P.
Morgan Securities, Inc., 5.95%,
dated 6/30/97, to be repurchased at
$6,101,008 on 7/1/97,
collateralized by U.S. Treasury
Bonds, 8.875%-12%, 8/15/13-2/15/19,
with a value of $5,723,935 and U.S.
Treasury Nts., 7.875%, 11/15/04,
with a value of $521,946 (Cost
$6,100,000) $ 6,100,000 6,100,000
- --------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$559,878,159) 127.0% 562,612,583
- --------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (27.0) (119,602,786)
---------------- ----------------
NET ASSETS 100.0% $ 443,009,797
---------------- ----------------
---------------- ----------------
</TABLE>
1. Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C> <C> <C>
ARP - Argentine Peso IEP - Irish Punt
AUD - Australian Dollar INR - Indian Rupee
CAD - Canadian Dollar ITL - Italian Lira
CHF - Swiss Franc JPY - Japanese Yen
CLP - Chilean Peso MXP - Mexican Peso
CZK - Czech Koruna MYR - Malaysian Ringgit
DEM - German Deutsche Mark NLG - Netherlands Guilder
DKK - Danish Krone NOK - Norwegian Krone
ESP - Spanish Peseta NZD - New Zealand Dollar
FIM - Finnish Markka PLZ - Polish Zloty
FRF - French Franc PTE - Portuguese Escudo
GBP - British Pound Sterling SEK - Swedish Krona
GRD - Greek Drachma SGD - Singapore Dollar
HKD - Hong Kong Dollar SKK - Slovakia Koruna
HUF - Hungarian Forint THB - Thai Baht
IDR - Indonesian Rupiah ZAR - South African Rand
</TABLE>
39
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
2. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
3. When-issued security to be delivered and settled after June 30, 1997.
4. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these 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. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
5. Represents the current interest rate for a variable rate security.
6. Identifies issues considered to be illiquid or restricted - See Note 8 of
Notes to Financial Statements.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $19,332,511 or 5.06% of the Fund's net
assets, at June 30, 1997.
8. A sufficient amount of liquid assets has been designated to cover outstanding
written call and put options, as follows:
<TABLE>
<CAPTION>
FACE/CONTRACTS MARKET
SUBJECT TO EXPIRATION PREMIUM VALUE NOTE
CALL DATE EXERCISE PRICE RECEIVED 1
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Australia (Commonwealth of) Bonds,
10%, 10/15/07 Call Opt. $ 280 7/21/97 114.16% AUD $ 3,741 $ 14,741
British Pound Sterling Call Option 130,000 7/17/97 .607 GBP 2,600 1,509
Federal National Mortgage Assn.,
7.50%, 7/1/27, Call Option $ 22,700 9/4/97 99.813% 159,609 159,609
New Zealand Dollar Call Option 240,000 8/25/97 1.433 NZD 1,320 204
New Zealand Dollar Call Option 605,000 8/25/97 1.449 NZD 3,933 1,252
New Zealand (Government of) Bonds,
10%, 3/15/02 Put Option $ 340 7/15/97 106.64% NZD 2,597 27
New Zealand (Government of) Bonds, 8%,
11/15/06 Put Option $ 490 8/22/97 100.76% NZD 2,762 --
----------- -----------
$176,562 $ 177,342
----------- -----------
----------- -----------
</TABLE>
9. A sufficient amount of securities has been designated to cover outstanding
forward foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
10. Securities with an aggregate market value of $2,071,876 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
11. Interest or dividend is paid in kind.
12. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
13. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
See accompanying Notes to Financial Statements.
40
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS AND
NOTES - 0.6%
- ---------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 0.1%
- ---------------------------------------------------------------------
Danka Business Systems plc, 6.75%
Cv. Sub. Nts., 4/1/02(1) $ 800,000 $ 1,188,000
- ---------------------------------------------------------------------
Southern Pacific Funding Corp.,
6.75% Cv. Sub. Nts., 10/15/06 1,000,000 938,750
- ---------------------------------------------------------------------
United Waste Systems, Inc., 4.50%
Cv. Sub. Nts., 6/1/01(2) 2,000,000 2,747,500
-------------
Total Convertible Corporate Bonds
and Notes (Cost $3,800,000) 4,874,250
SHARES
- ---------------------------------------------------------------------
COMMON STOCKS - 84.0%
- ---------------------------------------------------------------------
CONSUMER CYCLICALS - 11.1%
- ---------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 3.8%
Applebee's International, Inc. 170,000 4,547,500
- ---------------------------------------------------------------------
Callaway Golf Co. 100,000 3,550,000
- ---------------------------------------------------------------------
CKE Restaurants, Inc. 273,500 8,649,437
- ---------------------------------------------------------------------
HFS, Inc.(3) 100,000 5,800,000
- ---------------------------------------------------------------------
Landry's Seafood Restaurants,
Inc.(3) 280,000 6,440,000
-------------
28,986,937
- ---------------------------------------------------------------------
RETAIL: GENERAL - 2.9%
Meyer (Fred), Inc.(3) 70,000 3,618,125
- ---------------------------------------------------------------------
Nautica Enterprises, Inc.(3) 230,000 6,080,625
- ---------------------------------------------------------------------
North Face, Inc. (The)(3) 165,000 3,011,250
- ---------------------------------------------------------------------
Vans, Inc.(3) 350,000 5,293,750
- ---------------------------------------------------------------------
Wolverine World Wide, Inc. 127,750 3,880,406
-------------
21,884,156
- ---------------------------------------------------------------------
RETAIL: SPECIALTY - 4.4%
Central Garden & Pet Co.(3) 110,000 2,750,000
- ---------------------------------------------------------------------
General Nutrition Cos., Inc.(3) 330,000 9,240,000
- ---------------------------------------------------------------------
Hollywood Entertainment Corp.(3) 217,500 4,975,312
- ---------------------------------------------------------------------
Linens 'N Things, Inc.(3) 230,500 6,828,562
- ---------------------------------------------------------------------
Petco Animal Supplies, Inc.(3) 160,000 4,800,000
- ---------------------------------------------------------------------
TJX Cos., Inc. 180,000 4,747,500
-------------
33,341,374
- ---------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 17.6%
- ---------------------------------------------------------------------
FOOD - 0.3%
Disco SA, Sponsored ADR(3) 60,800 2,409,200
- ---------------------------------------------------------------------
HEALTHCARE/DRUGS - 4.0%
Alpha-Beta Technology, Inc.(3) 126,900 1,157,962
- ---------------------------------------------------------------------
BioChem Pharma, Inc.(3) 180,000 4,005,000
- ---------------------------------------------------------------------
Biogen, Inc.(3) 100,000 3,387,500
- ---------------------------------------------------------------------
Dura Pharmaceuticals, Inc.(3) 160,000 6,380,000
</TABLE>
41
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
HEALTHCARE/DRUGS (CONTINUED)
<S> <C> <C>
Human Genome Sciences, Inc.(3) 100,000 $ 3,325,000
- ---------------------------------------------------------------------
Incyte Pharmaceuticals, Inc.(3) 45,000 3,015,000
- ---------------------------------------------------------------------
Millennium Pharmaceuticals, Inc.(3) 100,000 1,612,500
- ---------------------------------------------------------------------
Nuerocrine Biosciences, Inc.(3) 105,000 945,000
- ---------------------------------------------------------------------
Parexel International Corp.(3) 200,000 6,350,000
-------------
30,177,962
- ---------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
10.7%
AmeriSource Health Corp., Cl. A(3) 164,700 8,214,413
- ---------------------------------------------------------------------
Cardinal Health, Inc. 57,500 3,291,875
- ---------------------------------------------------------------------
Covance, Inc.(3) 300,000 5,793,750
- ---------------------------------------------------------------------
ESC Medical Systems Ltd.(3) 122,100 3,113,550
- ---------------------------------------------------------------------
FPA Medical Management, Inc.(3) 360,000 8,527,500
- ---------------------------------------------------------------------
HEALTHSOUTH Corp.(3) 340,000 8,478,750
- ---------------------------------------------------------------------
IMPATH, Inc.(3) 150,000 4,087,500
- ---------------------------------------------------------------------
Integ, Inc.(3) 111,500 864,125
- ---------------------------------------------------------------------
MedPartners, Inc.(3) 135,000 2,919,375
- ---------------------------------------------------------------------
Omnicare, Inc. 98,600 3,093,575
- ---------------------------------------------------------------------
Pediatrix Medical Group, Inc.(3) 150,000 6,871,875
- ---------------------------------------------------------------------
PhyCor, Inc.(3) 127,500 4,390,781
- ---------------------------------------------------------------------
Quintiles Transnational Corp.(3) 30,000 2,088,750
- ---------------------------------------------------------------------
Renal Treatment Centers, Inc.(3) 300,000 8,062,500
- ---------------------------------------------------------------------
Total Renal Care Holdings, Inc.(3) 302,600 12,160,738
-------------
81,959,057
- ---------------------------------------------------------------------
HOUSEHOLD GOODS - 1.6%
Blyth Industries, Inc.(3) 352,500 11,896,875
- ---------------------------------------------------------------------
TOBACCO - 1.0%
General Cigar Holdings, Inc.(3) 133,600 3,932,850
- ---------------------------------------------------------------------
Swisher International Group, Inc.,
Cl. A(3) 225,000 3,881,250
-------------
7,814,100
- ---------------------------------------------------------------------
ENERGY - 4.9%
- ---------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 4.9%
Calpine Corp.(3) 245,000 4,655,000
- ---------------------------------------------------------------------
Diamond Offshore Drilling, Inc.(3) 76,900 6,007,813
- ---------------------------------------------------------------------
EVI, Inc.(3) 180,400 7,576,800
- ---------------------------------------------------------------------
Halliburton Co. 100,000 7,925,000
- ---------------------------------------------------------------------
Nabors Industries, Inc.(3) 150,000 3,750,000
- ---------------------------------------------------------------------
Santa Fe International Corp.(3) 230,000 7,820,000
-------------
37,734,613
</TABLE>
42
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C>
FINANCIAL - 7.3%
- ---------------------------------------------------------------------
BANKS - 0.3%
Banco de Galicia y Buenos Aires SA
de CV, Sponsored ADR 100,000 $ 2,637,500
- ---------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 2.4%
Arm Financial Group, Inc., Cl. A(3) 200,000 4,000,000
- ---------------------------------------------------------------------
Associates First Capital Corp., Cl.
A 161,000 8,935,500
- ---------------------------------------------------------------------
FIRSTPLUS Financial Group, Inc.(3) 150,000 5,100,000
-------------
18,035,500
- ---------------------------------------------------------------------
INSURANCE - 4.6%
CapMAC Holdings, Inc. 100,600 3,382,675
- ---------------------------------------------------------------------
Conseco, Inc. 230,000 8,510,000
- ---------------------------------------------------------------------
Everest Reinsurance Holdings, Inc. 200,000 7,925,000
- ---------------------------------------------------------------------
Executive Risk, Inc. 135,000 7,020,000
- ---------------------------------------------------------------------
Travelers Property Casualty Corp.,
Cl. A 200,000 7,975,000
-------------
34,812,675
- ---------------------------------------------------------------------
INDUSTRIAL - 13.0%
- ---------------------------------------------------------------------
INDUSTRIAL MATERIALS - 0.4%
Corning, Inc. 60,000 3,337,500
- ---------------------------------------------------------------------
INDUSTRIAL SERVICES - 11.4%
AccuStaff, Inc.(3) 250,000 5,921,875
- ---------------------------------------------------------------------
Affiliated Computer Services, Inc.,
Cl. A(3) 200,000 5,600,000
- ---------------------------------------------------------------------
CIBER, Inc.(3) 201,300 6,881,944
- ---------------------------------------------------------------------
Computer Horizons Corp.(3) 90,000 3,082,500
- ---------------------------------------------------------------------
Corrections Corp. of America(3) 210,000 8,347,500
- ---------------------------------------------------------------------
CORT Business Services Corp.(3) 50,300 1,483,850
- ---------------------------------------------------------------------
CUC International, Inc.(3) 330,000 8,518,125
- ---------------------------------------------------------------------
Danka Business Systems plc,
Sponsored ADR 150,000 6,131,250
- ---------------------------------------------------------------------
National Data Corp. 150,000 6,496,875
- ---------------------------------------------------------------------
Newpark Resources, Inc.(3) 143,400 4,839,750
- ---------------------------------------------------------------------
Precision Response Corp.(3) 308,100 5,083,650
- ---------------------------------------------------------------------
SITEL Corp.(3) 342,200 7,057,875
- ---------------------------------------------------------------------
Tetra Technologies, Inc.(3) 125,000 3,093,750
- ---------------------------------------------------------------------
U.S. Rentals, Inc.(3) 181,500 4,594,219
- ---------------------------------------------------------------------
United Waste Systems, Inc.(3) 84,000 3,444,000
- ---------------------------------------------------------------------
USA Waste Services, Inc.(3) 106,300 4,105,838
- ---------------------------------------------------------------------
West TeleServices Corp.(3) 150,200 2,215,450
-------------
86,898,451
- ---------------------------------------------------------------------
MANUFACTURING - 1.2%
Cognex Corp.(3) 130,000 3,445,000
- ---------------------------------------------------------------------
U.S. Filter Corp.(3) 208,600 5,684,350
-------------
9,129,350
</TABLE>
43
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY - 29.4%
- ---------------------------------------------------------------------
AEROSPACE/DEFENSE - 1.0%
REMEC, Inc.(3) 337,500 $ 7,931,250
- ---------------------------------------------------------------------
COMPUTER HARDWARE - 0.5%
MicroTouch Systems, Inc.(3) 180,000 4,140,000
- ---------------------------------------------------------------------
COMPUTER SOFTWARE - 11.5%
Aspen Technologies, Inc.(3) 136,000 5,117,000
- ---------------------------------------------------------------------
Cambridge Technology Partners,
Inc.(3) 226,600 7,251,200
- ---------------------------------------------------------------------
Compuware Corp.(3) 100,000 4,775,000
- ---------------------------------------------------------------------
Dr. Solomon's Group plc, ADR(3) 150,000 3,806,250
- ---------------------------------------------------------------------
Eidos plc, Sponsored ADR(3) 225,000 2,756,250
- ---------------------------------------------------------------------
Harbinger Corp.(3) 260,000 7,280,000
- ---------------------------------------------------------------------
HBO & Co. 100,000 6,887,500
- ---------------------------------------------------------------------
IONA Technologies plc, ADR(3) 120,000 2,370,000
- ---------------------------------------------------------------------
JDA Software Group, Inc.(3) 260,000 8,872,500
- ---------------------------------------------------------------------
McAfee Associates, Inc.(3) 120,000 7,575,000
- ---------------------------------------------------------------------
Rational Software Corp.(3) 82,500 1,387,031
- ---------------------------------------------------------------------
Remedy Corp.(3) 95,000 3,800,000
- ---------------------------------------------------------------------
Rogue Wave Software, Inc.(3) 200,000 2,500,000
- ---------------------------------------------------------------------
SELECT Software Tools Ltd., ADR(3) 220,000 2,915,000
- ---------------------------------------------------------------------
Template Software, Inc.(3) 225,000 3,262,500
- ---------------------------------------------------------------------
Versant Object Technology Corp.(3) 225,000 1,350,000
- ---------------------------------------------------------------------
Viasoft, Inc.(3) 80,000 4,060,000
- ---------------------------------------------------------------------
Visigenic Software, Inc.(3) 235,000 1,997,500
- ---------------------------------------------------------------------
Visio Corp.(3) 140,000 9,870,000
-------------
87,832,731
- ---------------------------------------------------------------------
ELECTRONICS - 3.0%
Altera Corp.(3) 80,000 4,040,000
- ---------------------------------------------------------------------
BENCHMARQ Microelectronics, Inc.(3) 150,000 2,587,500
- ---------------------------------------------------------------------
Photronics, Inc.(3) 100,000 4,775,000
- ---------------------------------------------------------------------
Sawtek, Inc.(3) 50,100 1,690,875
- ---------------------------------------------------------------------
Vitesse Semiconductor Corp.(3) 125,000 4,085,938
- ---------------------------------------------------------------------
Waters Corp.(3) 150,000 5,381,250
-------------
22,560,563
- ---------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
13.4%
Advanced Fibre Communications,
Inc.(3) 80,000 4,830,000
- ---------------------------------------------------------------------
Allen Telecom, Inc.(3) 300,000 6,225,000
- ---------------------------------------------------------------------
Ascend Communications, Inc.(3) 175,000 6,890,625
- ---------------------------------------------------------------------
Comverse Technology, Inc.(3) 170,000 8,840,000
- ---------------------------------------------------------------------
Davox Corp.(3) 187,500 6,703,125
- ---------------------------------------------------------------------
Gilat Satellite Networks Ltd.(3) 115,000 3,823,750
</TABLE>
44
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY
(CONTINUED)
<S> <C> <C>
Lucent Technologies, Inc. 80,000 $ 5,765,000
- ---------------------------------------------------------------------
Newbridge Networks Corp.(3) 210,000 9,135,000
- ---------------------------------------------------------------------
Periphonics Corp.(3) 190,800 4,102,200
- ---------------------------------------------------------------------
QUALCOMM, Inc.(3) 120,000 6,105,000
- ---------------------------------------------------------------------
Saville Systems Ireland plc,
Sponsored ADR(3) 170,000 8,840,000
- ---------------------------------------------------------------------
Scientific-Atlanta, Inc. 100,000 2,187,500
- ---------------------------------------------------------------------
Tel-Save Holdings, Inc.(3) 130,000 1,982,500
- ---------------------------------------------------------------------
Teledata Communications Ltd.(3) 270,000 9,281,250
- ---------------------------------------------------------------------
Tellabs, Inc.(3) 160,000 8,940,000
- ---------------------------------------------------------------------
Uniphase Corp.(3) 140,000 8,155,000
-------------
101,805,950
- ---------------------------------------------------------------------
UTILITIES - 0.7%
- ---------------------------------------------------------------------
TELEPHONE UTILITIES - 0.7%
Telecomunicacoes Brasileiras SA,
Sponsored ADR 35,000 5,311,250
-------------
Total Common Stocks (Cost
$495,214,163) 640,636,994
UNITS
- ---------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ---------------------------------------------------------------------
PerSeptive Biosystems, Inc. Wts.,
Exp. 9/03 (Cost $0) 961 --
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------------
REPURCHASE AGREEMENTS - 15.7%
- ---------------------------------------------------------------------
Repurchase agreement with J.P.
Morgan Securities, Inc., 5.95%,
dated 6/30/97, to be repurchased at
$119,619,767 on 7/1/97,
collateralized by U.S. Treasury
Bonds, 8.875%-12%, 8/15/13-2/15/19,
with a value of $112,226,655 and
U.S. Treasury Nts., 7.875%,
11/15/04, with a value of
$10,233,573 (Cost $119,600,000) $ 119,600,000 119,600,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$618,614,163) 100.3% 765,111,244
- ---------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (0.3) (2,604,611 )
-------------- -------------
NET ASSETS 100.0% $762,506,633
-------------- -------------
-------------- -------------
</TABLE>
1. Identifies issues considered to be illiquid or restricted - See Note 5 of
Notes to Financial Statements.
2. Represents securities sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended. These securities have been
determined to be liquid under guidelines established by the Board of Trustees.
These securities amount to $2,747,500 or 0.36% of the Fund's net assets, at June
30, 1997.
3. Non-income producing security.
See accompanying Notes to Financial Statements.
45
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 79.6%
- ------------------------------------------------------------------------
BASIC MATERIALS - 2.9%
- ------------------------------------------------------------------------
CHEMICALS - 2.2%
Du Pont (E.I.) De Nemours & Co. 34,000 $ 2,137,750
- ------------------------------------------------------------------------
Goodrich (B.F.) Co. 19,000 822,937
- ------------------------------------------------------------------------
IMC Global, Inc. 19,000 665,000
- ------------------------------------------------------------------------
Morton International, Inc. 29,000 875,437
- ------------------------------------------------------------------------
Potash Corp. of Saskatchewan, Inc. 5,000 375,312
- ------------------------------------------------------------------------
Praxair, Inc. 38,600 2,161,600
- ------------------------------------------------------------------------
Scotts Co. (The), Cl. A((1)) 48,000 1,392,000
--------------
8,430,036
- ------------------------------------------------------------------------
METALS - 0.7%
Oregon Steel Mills, Inc. 70,000 1,395,625
- ------------------------------------------------------------------------
USX-U.S. Steel Group, Inc. 37,000 1,297,312
--------------
2,692,937
- ------------------------------------------------------------------------
PAPER - 0.0%
Bowater, Inc. 4,000 185,000
- ------------------------------------------------------------------------
CONSUMER CYCLICALS - 12.6%
- ------------------------------------------------------------------------
AUTOS & HOUSING - 2.6%
Arvin Industries, Inc. 49,300 1,343,425
- ------------------------------------------------------------------------
Autoliv, Inc.((1)) 49,889 1,951,907
- ------------------------------------------------------------------------
Centex Corp. 34,000 1,381,250
- ------------------------------------------------------------------------
Champion Enterprises, Inc.((1)) 64,000 960,000
- ------------------------------------------------------------------------
Furniture Brands International,
Inc.((1)) 78,100 1,513,187
- ------------------------------------------------------------------------
Magna International, Inc., Cl. A 22,000 1,324,125
- ------------------------------------------------------------------------
Pulte Corp. 22,000 760,375
- ------------------------------------------------------------------------
Toll Brothers, Inc.((1)) 46,000 845,250
--------------
10,079,519
- ------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 2.0%
AMR Corp.((1)) 3,000 277,500
- ------------------------------------------------------------------------
Applebee's International, Inc. 19,500 521,625
- ------------------------------------------------------------------------
Callaway Golf Co. 76,200 2,705,100
- ------------------------------------------------------------------------
CKE Restaurants, Inc. 26,700 844,387
- ------------------------------------------------------------------------
Disney (Walt) Co. 13,000 1,043,250
- ------------------------------------------------------------------------
ITT Corp. (New)((1)) 8,000 488,500
- ------------------------------------------------------------------------
Lone Star Steakhouse & Saloon,
Inc.((1)) 50,000 1,300,000
- ------------------------------------------------------------------------
West Marine, Inc.((1)) 20,000 515,000
--------------
7,695,362
- ------------------------------------------------------------------------
MEDIA - 0.3%
Reuters Holdings plc, Sponsored ADR 19,000 1,197,000
</TABLE>
46
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
<S> <C> <C>
RETAIL: GENERAL - 2.2%
Federated Department Stores,
Inc.((1)) 57,000 $ 1,980,750
- ------------------------------------------------------------------------
Fruit of the Loom, Inc., Cl. A((1)) 20,000 620,000
- ------------------------------------------------------------------------
Jones Apparel Group, Inc.((1)) 25,200 1,203,300
- ------------------------------------------------------------------------
Liz Claiborne, Inc. 5,000 233,125
- ------------------------------------------------------------------------
Nautica Enterprises, Inc.((1)) 77,000 2,035,687
- ------------------------------------------------------------------------
Tommy Hilfiger Corp.((1)) 59,800 2,403,212
--------------
8,476,074
- ------------------------------------------------------------------------
RETAIL: SPECIALTY - 5.5%
American Pad & Paper Co.((1)) 13,500 227,812
- ------------------------------------------------------------------------
Ann Taylor Stores Corp.((1)) 37,000 721,500
- ------------------------------------------------------------------------
Bed Bath & Beyond, Inc.((1)) 26,000 789,750
- ------------------------------------------------------------------------
Brown Group, Inc. 42,000 784,875
- ------------------------------------------------------------------------
Consolidated Stores Corp.((1)) 18,750 651,562
- ------------------------------------------------------------------------
CVS Corp. 60,000 3,075,000
- ------------------------------------------------------------------------
Ethan Allen Interiors, Inc. 40,000 2,280,000
- ------------------------------------------------------------------------
Gap, Inc. (The)((1)) 17,000 660,875
- ------------------------------------------------------------------------
Nine West Group, Inc.((1)) 65,600 2,505,100
- ------------------------------------------------------------------------
Ross Stores, Inc. 51,000 1,667,062
- ------------------------------------------------------------------------
Samsonite Corp.((1)) 43,500 1,919,437
- ------------------------------------------------------------------------
Tiffany & Co. 17,000 785,187
- ------------------------------------------------------------------------
TJX Cos., Inc. 92,000 2,426,500
- ------------------------------------------------------------------------
Williams-Sonoma, Inc.((1)) 62,500 2,671,875
--------------
21,166,535
- ------------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 11.2%
- ------------------------------------------------------------------------
FOOD - 2.2%
Hershey Foods Corp. 20,000 1,106,250
- ------------------------------------------------------------------------
JP Foodservice, Inc.((1)) 25,600 734,400
- ------------------------------------------------------------------------
Kroger Co.((1)) 44,000 1,276,000
- ------------------------------------------------------------------------
Morningstar Group, Inc.((1)) 35,000 1,028,125
- ------------------------------------------------------------------------
Richfood Holdings, Inc. 55,500 1,443,000
- ------------------------------------------------------------------------
Safeway, Inc.((1)) 35,000 1,614,375
- ------------------------------------------------------------------------
Sara Lee Corp. 30,000 1,248,750
--------------
8,450,900
- ------------------------------------------------------------------------
HEALTHCARE/DRUGS - 3.3%
Abbott Laboratories 4,000 267,000
- ------------------------------------------------------------------------
Amgen, Inc.((1)) 5,000 290,625
- ------------------------------------------------------------------------
Biogen, Inc.((1)) 35,000 1,185,625
- ------------------------------------------------------------------------
Bristol-Myers Squibb Co. 4,000 324,000
- ------------------------------------------------------------------------
Lilly (Eli) & Co. 32,090 3,507,838
- ------------------------------------------------------------------------
Pfizer, Inc. 37,500 4,481,250
</TABLE>
47
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
HEALTHCARE/DRUGS (CONTINUED)
<S> <C> <C>
Schering-Plough Corp. 50,800 $ 2,432,050
--------------
12,488,388
- ------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
4.6%
Guidant Corp. 27,916 2,372,860
- ------------------------------------------------------------------------
HealthCare COMPARE Corp.((1)) 35,900 1,880,262
- ------------------------------------------------------------------------
HEALTHSOUTH Corp.((1)) 84,000 2,094,750
- ------------------------------------------------------------------------
Lincare Holdings, Inc.((1)) 75,700 3,255,100
- ------------------------------------------------------------------------
Medtronic, Inc. 10,000 810,000
- ------------------------------------------------------------------------
Oxford Health Plans, Inc.((1)) 23,000 1,650,250
- ------------------------------------------------------------------------
Renal Treatment Centers, Inc.((1)) 42,000 1,128,750
- ------------------------------------------------------------------------
Sofamor Danek Group, Inc.((1)) 17,000 777,750
- ------------------------------------------------------------------------
VISX, Inc.((1)) 11,000 261,250
- ------------------------------------------------------------------------
WellPoint Health Networks,
Inc.((1)) 70,400 3,229,600
--------------
17,460,572
- ------------------------------------------------------------------------
HOUSEHOLD GOODS - 0.0%
Procter & Gamble Co. 1,000 141,250
- ------------------------------------------------------------------------
TOBACCO - 1.1%
Philip Morris Cos., Inc. 96,000 4,260,000
- ------------------------------------------------------------------------
ENERGY - 4.1%
- ------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 2.2%
BJ Services Co.((1)) 25,000 1,340,625
- ------------------------------------------------------------------------
ENSCO International, Inc.((1)) 32,000 1,688,000
- ------------------------------------------------------------------------
Global Marine, Inc.((1)) 90,000 2,092,500
- ------------------------------------------------------------------------
Smith International, Inc.((1)) 38,000 2,308,500
- ------------------------------------------------------------------------
Tidewater, Inc. 10,000 440,000
- ------------------------------------------------------------------------
Transocean Offshore, Inc. 10,000 726,250
--------------
8,595,875
- ------------------------------------------------------------------------
OIL-INTEGRATED - 1.9%
Mobil Corp. 18,200 1,271,725
- ------------------------------------------------------------------------
Phillips Petroleum Co. 33,000 1,443,750
- ------------------------------------------------------------------------
Royal Dutch Petroleum Co., NY
Shares 24,000 1,288,500
- ------------------------------------------------------------------------
Unocal Corp. 30,000 1,164,375
- ------------------------------------------------------------------------
USX-Marathon Group 69,000 1,992,375
--------------
7,160,725
- ------------------------------------------------------------------------
FINANCIAL - 15.4%
- ------------------------------------------------------------------------
BANKS - 4.3%
Banc One Corp. 107,262 5,195,503
- ------------------------------------------------------------------------
BankAmerica Corp. 15,000 968,437
- ------------------------------------------------------------------------
BankBoston Corp. 23,000 1,657,438
- ------------------------------------------------------------------------
Chase Manhattan Corp. (New) 15,640 1,518,058
</TABLE>
48
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
BANKS (CONTINUED)
<S> <C> <C>
Citicorp 8,000 $ 964,500
- ------------------------------------------------------------------------
Greenpoint Financial Corp. 12,000 798,750
- ------------------------------------------------------------------------
Societe Generale 12,500 1,396,711
- ------------------------------------------------------------------------
Star Banc Corp. 37,500 1,584,375
- ------------------------------------------------------------------------
State Street Corp. 49,200 2,275,500
--------------
16,359,272
- ------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 7.2%
Associates First Capital Corp., Cl.
A 27,000 1,498,500
- ------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 20,000 623,750
- ------------------------------------------------------------------------
Everen Capital Corp. 19,000 592,563
- ------------------------------------------------------------------------
Fannie Mae 36,000 1,570,500
- ------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 60,000 2,062,500
- ------------------------------------------------------------------------
Finova Group, Inc. 23,000 1,759,500
- ------------------------------------------------------------------------
Franklin Resources, Inc. 31,100 2,256,694
- ------------------------------------------------------------------------
Green Tree Financial Corp. 103,000 3,669,375
- ------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 30,000 1,788,750
- ------------------------------------------------------------------------
MGIC Investment Corp. 32,200 1,543,588
- ------------------------------------------------------------------------
Money Store, Inc. (The) 40,000 1,147,500
- ------------------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 60,200 2,592,363
- ------------------------------------------------------------------------
Price (T. Rowe) Associates 31,200 1,610,700
- ------------------------------------------------------------------------
Schwab (Charles) Corp. 20,000 813,750
- ------------------------------------------------------------------------
Travelers Group, Inc. 66,666 4,204,125
--------------
27,734,158
- ------------------------------------------------------------------------
INSURANCE - 3.9%
Allstate Corp. 27,500 2,007,500
- ------------------------------------------------------------------------
American International Group, Inc. 3,000 448,125
- ------------------------------------------------------------------------
Cigna Corp. 3,600 639,000
- ------------------------------------------------------------------------
Conseco, Inc. 90,000 3,330,000
- ------------------------------------------------------------------------
Equitable Cos., Inc. 84,000 2,793,000
- ------------------------------------------------------------------------
Hartford Financial Services Group,
Inc. 5,000 413,750
- ------------------------------------------------------------------------
Hartford Life, Inc., Cl. A((1)) 3,000 112,500
- ------------------------------------------------------------------------
Loews Corp. 11,000 1,101,375
- ------------------------------------------------------------------------
Progressive Corp. 15,000 1,305,000
- ------------------------------------------------------------------------
SunAmerica, Inc. 54,000 2,632,500
--------------
14,782,750
- ------------------------------------------------------------------------
INDUSTRIAL - 7.5%
- ------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.9%
Emerson Electric Co. 37,000 2,037,313
- ------------------------------------------------------------------------
General Electric Co. 20,000 1,307,500
--------------
3,344,813
</TABLE>
49
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL MATERIALS - 0.4%
Rayonier, Inc. 32,400 $ 1,362,825
- ------------------------------------------------------------------------
INDUSTRIAL SERVICES - 2.0%
Corrections Corp. of America((1)) 66,000 2,623,500
- ------------------------------------------------------------------------
Culligan Water Technologies,
Inc.((1)) 18,500 827,875
- ------------------------------------------------------------------------
Kent Electronics Corp.((1)) 98,200 3,602,713
- ------------------------------------------------------------------------
Manpower, Inc. 10,000 445,000
--------------
7,499,088
- ------------------------------------------------------------------------
MANUFACTURING - 2.5%
Aeroquip-Vickers, Inc. 35,000 1,653,750
- ------------------------------------------------------------------------
AGCO Corp. 25,200 905,625
- ------------------------------------------------------------------------
AlliedSignal, Inc. 14,000 1,176,000
- ------------------------------------------------------------------------
American Standard Cos., Inc.((1)) 35,000 1,566,250
- ------------------------------------------------------------------------
MascoTech, Inc. 65,000 1,356,875
- ------------------------------------------------------------------------
Sealed Air Corp.((1)) 38,000 1,805,000
- ------------------------------------------------------------------------
U.S. Filter Corp.((1)) 40,300 1,098,175
--------------
9,561,675
- ------------------------------------------------------------------------
TRANSPORTATION - 1.7%
Burlington Northern Santa Fe Corp. 7,000 629,125
- ------------------------------------------------------------------------
Canadian Pacific Ltd. (New) 90,000 2,559,375
- ------------------------------------------------------------------------
Illinois Central Corp. 12,500 436,719
- ------------------------------------------------------------------------
Kansas City Southern Industries,
Inc. 47,000 3,031,500
--------------
6,656,719
- ------------------------------------------------------------------------
TECHNOLOGY - 24.4%
- ------------------------------------------------------------------------
COMPUTER HARDWARE - 8.2%
Adaptec, Inc.((1)) 42,200 1,466,450
- ------------------------------------------------------------------------
Applied Magnetics Corp.((1)) 30,000 678,750
- ------------------------------------------------------------------------
Cabletron Systems, Inc.((1)) 65,000 1,840,313
- ------------------------------------------------------------------------
Cascade Communications Corp.((1)) 72,500 2,002,813
- ------------------------------------------------------------------------
Compaq Computer Corp.((1)) 62,000 6,153,500
- ------------------------------------------------------------------------
Data General Corp.((1)) 40,000 1,040,000
- ------------------------------------------------------------------------
Dell Computer Corp.((1)) 26,000 3,053,375
- ------------------------------------------------------------------------
EMC Corp.((1)) 23,000 897,000
- ------------------------------------------------------------------------
Gateway 2000, Inc.((1)) 70,600 2,290,088
- ------------------------------------------------------------------------
International Business Machines
Corp. 37,000 3,336,938
- ------------------------------------------------------------------------
Seagate Technology((1)) 80,000 2,815,000
- ------------------------------------------------------------------------
Sun Microsystems, Inc.((1)) 80,000 2,977,500
- ------------------------------------------------------------------------
Western Digital Corp.((1)) 90,000 2,846,250
--------------
31,397,977
- ------------------------------------------------------------------------
COMPUTER SOFTWARE - 7.0%
Automatic Data Processing, Inc. 4,000 188,000
</TABLE>
50
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
COMPUTER SOFTWARE (CONTINUED)
<S> <C> <C>
BMC Software, Inc.((1)) 58,400 $ 3,233,900
- ------------------------------------------------------------------------
Computer Associates International,
Inc. 9,000 501,188
- ------------------------------------------------------------------------
First Data Corp. 38,000 1,669,625
- ------------------------------------------------------------------------
HBO & Co. 30,000 2,066,250
- ------------------------------------------------------------------------
McAfee Associates, Inc.((1)) 45,000 2,840,625
- ------------------------------------------------------------------------
Microsoft Corp.((1)) 60,000 7,582,500
- ------------------------------------------------------------------------
Oracle Corp.((1)) 34,400 1,732,900
- ------------------------------------------------------------------------
Peoplesoft, Inc.((1)) 71,800 3,787,450
- ------------------------------------------------------------------------
PLATINUM Technology, Inc.((1)) 9,900 131,175
- ------------------------------------------------------------------------
SAP AG, Preference 4,000 825,235
- ------------------------------------------------------------------------
Structural Dynamics Research
Corp.((1)) 38,500 1,010,625
- ------------------------------------------------------------------------
Sungard Data Systems, Inc.((1)) 27,000 1,255,500
--------------
26,824,973
- ------------------------------------------------------------------------
ELECTRONICS - 3.6%
Advanced Micro Devices, Inc.((1)) 15,000 540,000
- ------------------------------------------------------------------------
Analog Devices, Inc.((1)) 28,333 752,595
- ------------------------------------------------------------------------
Intel Corp. 13,000 1,843,563
- ------------------------------------------------------------------------
LSI Logic Corp.((1)) 45,000 1,440,000
- ------------------------------------------------------------------------
Novellus Systems, Inc.((1)) 24,200 2,093,300
- ------------------------------------------------------------------------
SCI Systems, Inc.((1)) 43,100 2,747,625
- ------------------------------------------------------------------------
Vitesse Semiconductor Corp.((1)) 26,500 866,219
- ------------------------------------------------------------------------
Waters Corp.((1)) 95,000 3,408,125
--------------
13,691,427
- ------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
5.6%
Ascend Communications, Inc.((1)) 23,000 905,625
- ------------------------------------------------------------------------
Cisco Systems, Inc.((1)) 81,000 5,437,125
- ------------------------------------------------------------------------
Lucent Technologies, Inc. 39,000 2,810,438
- ------------------------------------------------------------------------
Newbridge Networks Corp.((1)) 41,000 1,783,500
- ------------------------------------------------------------------------
Pairgain Technologies, Inc.((1)) 70,000 1,085,000
- ------------------------------------------------------------------------
Tellabs, Inc.((1)) 96,600 5,397,525
- ------------------------------------------------------------------------
WorldCom, Inc. 125,000 4,000,000
--------------
21,419,213
- ------------------------------------------------------------------------
UTILITIES - 1.5%
- ------------------------------------------------------------------------
ELECTRIC UTILITIES - 0.9%
American Electric Power Co., Inc. 11,550 485,100
- ------------------------------------------------------------------------
CMS Energy Corp. 16,200 571,050
- ------------------------------------------------------------------------
FPL Group, Inc. 13,600 626,450
- ------------------------------------------------------------------------
PacifiCorp 31,000 682,000
- ------------------------------------------------------------------------
Pinnacle West Capital Corp. 34,000 1,022,125
--------------
3,386,725
</TABLE>
51
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
<S> <C> <C>
GAS UTILITIES - 0.2%
Sonat, Inc. 13,000 $ 666,250
- ------------------------------------------------------------------------
TELEPHONE UTILITIES - 0.4%
BellSouth Corp. 14,600 677,075
- ------------------------------------------------------------------------
Cincinnati Bell, Inc. 23,600 743,400
--------------
1,420,475
--------------
Total Common Stocks (Cost
$221,277,380) 304,588,513
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 19.5%
- ------------------------------------------------------------------------
Repurchase agreement with Zion
First National Bank, 5.95%, dated
6/30/97, to be repurchased at
$74,412,297 on 7/1/97,
collateralized by U.S. Treasury
Bonds, 12.50%, 8/15/14, with a
value of $18,835,600 and U.S.
Treasury Nts., 5.125%-7.25%,
5/31/98-8/15/04, with a value of
$57,132,975 (Cost $74,400,000) $ 74,400,000 74,400,000
- ------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$295,677,380) 99.1% 378,988,513
- ------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.9 3,394,380
-------------- --------------
NET ASSETS 100.0% $ 382,382,893
-------------- --------------
-------------- --------------
</TABLE>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
52
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS - 2.0%
- ---------------------------------------------------------------
Federal National Mortgage Assn.:
7.50%, 7/1/27(2) $ 3,000,000 $ 3,006,570
8.50%, 7/25/27(2) 3,000,000 3,112,500
- ---------------------------------------------------------------
Government National Mortgage Assn.:
8%, 4/15/23 3,031,628 3,121,001
8%, 7/15/22 1,410,936 1,453,857
- ---------------------------------------------------------------
Resolution Trust Corp., Commercial
Mtg. Pass-Through Certificates,
Series 1994-C2, Cl. E, 8%, 4/25/25 692,315 694,964
------------
Total Mortgage-Backed Obligations
(Cost $11,309,917) 11,388,892
- ---------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 5.3%
- ---------------------------------------------------------------
U.S. Treasury Bonds, STRIPS, Zero
Coupon:
7.258%, 11/15/18(3) 18,600,000 4,248,256
7.101%, 11/15/18(3) 24,500,000 5,595,822
7.313%, 8/15/19(3) 26,800,000 5,811,174
- ---------------------------------------------------------------
U.S. Treasury Nts.:
6.375%, 8/15/02(4) 5,000,000 4,998,440
9.25%, 8/15/98 9,000,000 9,323,442
------------
Total U.S. Government Obligations
(Cost $29,160,015) 29,977,134
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS -
14.4%
- ------------------------------------------------------------------
Argentina (Republic of) Bonds,
Bonos de Consolidacion de Deudas,
Series I, 5.695%, 4/1/01(5)(6) 2,418,595 2,340,985
- ------------------------------------------------------------------
Argentina (Republic of) Par Bonds,
5.50%, 3/31/23(7) 24,000,000 16,665,000
- ------------------------------------------------------------------
Argentina (Republic of) Past Due
Interest Bonds, Series L, 6.75%,
3/31/05(5) 8,730,000 8,228,025
- ------------------------------------------------------------------
Brazil (Federal Republic of) Par
Bonds, 5.25%, 4/15/24(7) 8,000,000 5,435,000
- ------------------------------------------------------------------
Canada (Government of) Bonds:
8.50%, 4/1/02 CAD 1,500,000 1,213,193
8.75%, 12/1/05 CAD 12,200,000 10,300,452
9.75%, 12/1/01 CAD 3,000,000 2,520,155
9.75%, 6/1/01 CAD 2,000,000 1,663,982
- ------------------------------------------------------------------
Denmark (Kingdom of) Bonds, 8%,
3/15/06 DKK 32,100,000 5,448,182
- ------------------------------------------------------------------
Eskom Depositary Receipts, Series
E168, 11%, 6/1/08 ZAR 12,570,000 2,235,232
- ------------------------------------------------------------------
International Bank for
Reconstruction & Development,
11.50% Medium-Term Nts., 10/9/97 CZK 72,000,000 2,176,530
- ------------------------------------------------------------------
Ireland (Government of) Bonds,
9.25%, 7/11/03 IEP 1,110,000 1,945,001
- ------------------------------------------------------------------
New Zealand (Government of) Bonds,
8%, 2/15/01 NZD 10,440,000 7,365,982
- ------------------------------------------------------------------
Poland (Republic of) Bonds, 15%,
10/12/99 PLZ 9,000,000 2,446,332
- ------------------------------------------------------------------
Queensland Treasury Corp.
Exchangeable Gtd. Nts., 10.50%,
5/15/03 AUD 1,800,000 1,605,755
- ------------------------------------------------------------------
Treasury Corp. of Victoria Gtd.
Bonds, 8.25%, 10/15/03 AUD 3,000,000 2,425,673
- ------------------------------------------------------------------
United Kingdom Treasury Bonds,
6.75%, 11/26/04 GBP 2,680,000 4,375,301
</TABLE>
53
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS
(CONTINUED)
<S> <C> <C> <C>
- ------------------------------------------------------------------
United Kingdom Treasury Nts., 13%,
7/14/00 GBP 1,590,000 $ 3,064,674
------------
Total Foreign Government
Obligations (Cost $73,775,240) 81,455,454
</TABLE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND
NOTES - 9.1%
- ---------------------------------------------------------------
BASIC MATERIALS - 1.3%
- ---------------------------------------------------------------
CHEMICALS - 0.2%
Harris Chemical North America,
Inc., 10.75% Gtd. Sr. Sub. Nts.,
10/15/03 100,000 102,500
- ---------------------------------------------------------------
NL Industries, Inc., 0%/13% Sr.
Sec. Disc. Nts., 10/15/05(8) 360,000 342,450
- ---------------------------------------------------------------
Quantum Chemical Corp., 10.375%
First Mtg. Nts., 6/1/03 500,000 534,227
- ---------------------------------------------------------------
Sterling Chemicals, Inc., 11.75%
Sr. Unsec. Sub. Nts., 8/15/06 250,000 271,250
------------
1,250,427
- ---------------------------------------------------------------
GOLD AND PLATINUM - 0.2%
Royal Oak Mines, Inc., 11% Sr. Sub.
Nts., 8/15/06 1,250,000 1,200,000
- ---------------------------------------------------------------
METALS - 0.4%
AK Steel Corp., 9.125% Sr. Nts.,
12/15/06 1,150,000 1,187,375
- ---------------------------------------------------------------
Armco, Inc., 8.50% Sinking Fund
Debs., 9/1/01 178,000 176,220
- ---------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.,
12.75% Sr. Sub. Nts., 2/1/03 1,000,000 1,090,000
------------
2,453,595
- ---------------------------------------------------------------
PAPER - 0.5%
APP International Finance Co. BV,
11.75% Gtd. Sec. Nts., 10/1/05 500,000 551,875
- ---------------------------------------------------------------
Aracruz Celulose SA, 10.375% Debs.,
1/31/02 430,000 456,337
- ---------------------------------------------------------------
Buckeye Cellulose Corp., 9.25% Sr.
Sub. Nts., 9/15/08 115,000 119,025
- ---------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr.
Nts., 3/1/03 425,000 439,875
- ---------------------------------------------------------------
Repap Wisconsin, Inc., 9.875%
Second Priority Sr. Nts., 5/1/06 500,000 507,500
- ---------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts.,
Series B, 12/15/04 750,000 838,125
------------
2,912,737
- ---------------------------------------------------------------
CONSUMER CYCLICALS - 2.9%
- ---------------------------------------------------------------
AUTOS & HOUSING - 0.8%
Chrysler Financial Corp., 13.25%
Nts., 10/15/99 500,000 570,835
- ---------------------------------------------------------------
Coleman Escrow Corp., Zero Coupon
Sr. First Priority Disc. Nts.,
11.125%, 5/15/01(3)(9) 1,000,000 637,500
- ---------------------------------------------------------------
Harman International Industries,
Inc., 12% Sr. Sub. Nts., 8/1/02 1,000,000 1,070,000
- ---------------------------------------------------------------
Hayes Wheels International, Inc.,
11% Sr. Sub. Nts., 7/15/06 500,000 551,250
- ---------------------------------------------------------------
Icon Health & Fitness, Inc., 13%
Sr. Sub. Nts., Series B, 7/15/02 1,000,000 1,130,000
- ---------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts.,
Series B, 3/1/04 250,000 251,250
- ---------------------------------------------------------------
Samsonite Corp., 11.125% Sr. Sub.
Nts., 7/15/05(10) 345,000 391,575
------------
4,602,410
- ---------------------------------------------------------------
LEISURE & ENTERTAINMENT - 0.5%
Foodmaker, Inc.:
9.25% Sr. Nts., 3/1/99 450,000 463,500
9.75% Sr. Sub. Nts., 6/1/02 350,000 363,562
</TABLE>
54
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------
LEISURE & ENTERTAINMENT (CONTINUED)
<S> <C> <C>
- ---------------------------------------------------------------
Grand Casinos, Inc., 10.125% Gtd.
First Mtg. Nts., 12/1/03 $ 655,000 $ 686,113
- ---------------------------------------------------------------
Imax Corp., 10% Sr. Nts., 3/1/01 600,000 631,500
- ---------------------------------------------------------------
Rio Hotel & Casino, Inc., 9.50%
Gtd. Sr. Sub. Nts., 4/15/07 750,000 774,375
- ---------------------------------------------------------------
Trump Atlantic City
Associates/Trump Atlantic City
Funding, Inc., 11.25% First Mtg.
Nts., 5/1/06 80,000 78,400
------------
2,997,450
- ---------------------------------------------------------------
MEDIA - 1.3%
American Telecasting, Inc.,
0%/14.50% Sr. Disc. Nts.,
6/15/04(8) 229,000 72,135
- ---------------------------------------------------------------
Cablevision Systems Corp., 9.875%
Sr. Sub. Nts., 5/15/06 250,000 268,125
- ---------------------------------------------------------------
EchoStar Communications Corp.,
0%/12.875% Sr. Disc. Nts.,
6/1/04(8) 540,000 456,300
- ---------------------------------------------------------------
Helicon Group LP/Helicon Capital
Corp., 11% Sr. Sec. Nts., Series B,
11/1/03(5) 550,000 574,750
- ---------------------------------------------------------------
Lamar Advertising Co., 9.625% Sr.
Sub. Nts., 12/1/06 150,000 154,500
- ---------------------------------------------------------------
Outlet Broadcasting, Inc., 10.875%
Sr. Sub. Nts., 7/15/03 1,000,000 1,083,743
- ---------------------------------------------------------------
Rogers Cablesystems Ltd., 10%
Second Priority Sr. Sec. Debs.,
12/1/07 1,000,000 1,075,000
- ---------------------------------------------------------------
SCI Television, Inc., 11% Sr. Sec.
Nts., 6/30/05(10) 500,000 535,000
- ---------------------------------------------------------------
TCI Satellite Entertainment, Inc.,
10.875% Sr. Sub. Nts., 2/15/07(9) 300,000 303,000
- ---------------------------------------------------------------
Time Warner Entertainment LP/Time
Warner, Inc., 10.15% Sr. Nts.,
5/1/12 500,000 609,088
- ---------------------------------------------------------------
Time Warner, Inc., 9.125% Debs.,
1/15/13 500,000 555,722
- ---------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr.
Debs., 10/30/07 1,000,000 1,100,687
- ---------------------------------------------------------------
Universal Outdoor, Inc., 9.75% Sr.
Sub. Nts., Series B, 10/15/06 500,000 520,000
------------
7,308,050
- ---------------------------------------------------------------
RETAIL: GENERAL - 0.0%
CMI Industries, Inc., 9.50% Sr.
Sub. Nts., 10/1/03(10) 70,000 70,875
- ---------------------------------------------------------------
RETAIL: SPECIALTY - 0.3%
Cole National Group, Inc., 11.25%
Sr. Nts., 10/1/01(10) 1,000,000 1,100,000
- ---------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625%
Sr. Nts., 5/1/03(10) 750,000 798,750
------------
1,898,750
- ---------------------------------------------------------------
CONSUMER NON-CYCLICALS - 0.8%
- ---------------------------------------------------------------
FOOD - 0.3%
Grand Union Co., 12% Sr. Nts.,
9/1/04 410,000 305,450
- ---------------------------------------------------------------
Jitney-Jungle Stores of America,
Inc., 12% Gtd. Sr. Nts., 3/1/06 70,000 78,313
- ---------------------------------------------------------------
Ralph's Grocery Co., 10.45% Sr.
Nts., 6/15/04 850,000 916,938
- ---------------------------------------------------------------
RJR Nabisco, Inc., 8.625%
Medium-Term Nts., 12/1/02 500,000 512,226
------------
1,812,927
- ---------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
0.4%
Genesis Health Ventures, Inc.,
9.25% Sr. Sub. Nts., 10/1/06 1,695,000 1,754,325
- ---------------------------------------------------------------
Magellan Health Services, Inc.,
11.25% Sr. Sub. Nts., Series A,
4/15/04 355,000 397,600
------------
2,151,925
- ---------------------------------------------------------------
HOUSEHOLD GOODS - 0.1%
Revlon Worldwide Corp., Zero Coupon
Sr. Sec. Disc. Nts., Series B,
13.169%, 3/15/98(3) 500,000 476,250
</TABLE>
55
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
ENERGY - 0.3%
- ---------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 0.3%
J. Ray McDermott SA, 9.375% Sr.
Sub. Bonds, 7/15/06 $ 750,000 $ 774,375
- ---------------------------------------------------------------
OPI International, Inc., 12.875%
Gtd. Sr. Nts., 7/15/02(10) 1,000,000 1,064,000
------------
1,838,375
- ---------------------------------------------------------------
FINANCIAL - 0.3%
- ---------------------------------------------------------------
BANKS - 0.1%
First Chicago Corp., 11.25% Sub.
Nts., 2/20/01 250,000 285,604
- ---------------------------------------------------------------
First Chicago Corp., 9% Sub. Nts.,
6/15/99 250,000 261,713
------------
547,317
- ---------------------------------------------------------------
DIVERSIFIED FINANCIAL - 0.2%
Saul (B.F.) Real Estate Investment
Trust, 11.625% Sr. Sec. Nts.,
Series B, 4/1/02 950,000 1,011,750
- ---------------------------------------------------------------
INDUSTRIAL - 0.8%
- ---------------------------------------------------------------
INDUSTRIAL MATERIALS - 0.4%
American Standard, Inc., 10.875%
Sr. Nts., 5/15/99(10) 500,000 536,250
- ---------------------------------------------------------------
Building Materials Corp. of
America, 8.625% Sr. Nts., 12/15/06 100,000 102,000
- ---------------------------------------------------------------
Owens-Illinois, Inc., 10% Sr. Sub.
Nts., 8/1/02 500,000 527,500
- ---------------------------------------------------------------
Triangle Pacific Corp., 10.50% Sr.
Nts., 8/1/03 850,000 913,750
------------
2,079,500
- ---------------------------------------------------------------
INDUSTRIAL SERVICES - 0.1%
Allied Waste North America, Inc.,
10.25% Sr. Sub. Nts., 12/1/06(9) 285,000 306,375
- ---------------------------------------------------------------
Neodata Services, Inc., 12% Sr.
Nts., Series B, 5/1/03 400,000 432,000
------------
738,375
- ---------------------------------------------------------------
MANUFACTURING - 0.3%
Mettler Toledo, Inc., 9.75% Gtd.
Sr. Sub. Nts., 10/1/06 500,000 527,500
- ---------------------------------------------------------------
Synthetic Industries, Inc., 9.25%
Sr. Sub. Nts., 2/15/07(9) 80,000 82,000
- ---------------------------------------------------------------
Terex Corp., 13.25% Sr. Sec. Nts.,
5/15/02 1,000,000 1,127,500
------------
1,737,000
- ---------------------------------------------------------------
TECHNOLOGY - 2.0%
- ---------------------------------------------------------------
AEROSPACE/DEFENSE - 0.4%
America West Airlines, Inc., 10.75%
Sr. Nts., 9/1/05 925,000 960,844
- ---------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd.
Nts., 12/15/98 1,000,000 1,022,500
------------
1,983,344
- ---------------------------------------------------------------
COMPUTER SOFTWARE - 0.3%
Bell & Howell Co. (New), 0%/11.50%
Sr. Disc. Debs., Series B,
3/1/05(8) 1,000,000 810,000
- ---------------------------------------------------------------
Unisys Corp., 15% Credit Sensitive
Nts., 7/1/97(5)(10) 650,000 653,250
------------
1,463,250
- ---------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
1.3%
Call-Net Enterprises, Inc.,
0%/13.25% Sr. Disc. Nts.,
12/1/04(8) 800,000 695,000
- ---------------------------------------------------------------
ICG Holdings, Inc., 0%/13.50% Sr.
Disc. Nts., 9/15/05(8) 800,000 576,000
- ---------------------------------------------------------------
NTL, Inc., 0%/10.875% Sr. Deferred
Coupon Nts., 10/15/03(8) 500,000 436,250
- ---------------------------------------------------------------
Omnipoint Corp., 11.625% Sr. Nts.,
8/15/06 850,000 820,250
</TABLE>
56
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY
(CONTINUED)
<S> <C> <C>
PriCellular Wireless Corp., 0%/14%
Sr. Sub. Disc. Nts., 11/15/01(8) $ 1,000,000 $ 1,055,000
- ---------------------------------------------------------------
Teleport Communications Group,
Inc.:
0%/11.125% Sr. Disc. Nts.,
7/1/07(8) 1,500,000 1,085,625
9.875% Sr. Nts., 7/1/06 400,000 428,000
- ---------------------------------------------------------------
Telewest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(8) 1,000,000 725,000
9.625% Sr. Debs., 10/1/06 500,000 525,000
- ---------------------------------------------------------------
USA Mobile Communications, Inc. II,
9.50% Sr. Nts., 2/1/04 1,000,000 940,000
------------
7,286,125
- ---------------------------------------------------------------
UTILITIES - 0.7%
- ---------------------------------------------------------------
ELECTRIC UTILITIES - 0.5%
California Energy, Inc., 10.25% Sr.
Disc. Nts., 1/15/04 750,000 811,875
- ---------------------------------------------------------------
Calpine Corp., 10.50% Sr. Nts.,
5/15/06 800,000 872,000
- ---------------------------------------------------------------
First PV Funding Corp.:
10.15% Lease Obligation Bonds,
Series 1986B, 1/15/16 759,000 809,284
10.15% Lease Obligation Bonds,
Series 1986B, 1/15/16 11,000 11,000
------------
2,504,159
- ---------------------------------------------------------------
GAS UTILITIES - 0.2%
Beaver Valley II Funding Corp., 9%
Second Lease Obligation Bonds,
6/1/17 989,000 1,043,395
------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $49,312,389) 51,367,986
</TABLE>
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS AND
NOTES - 0.0%
- --------------------------------------------------------------------
Castorama Dubois Investissements
SA, 3.15% Cv. Bonds, 1/1/03
(Cost $33,994) FRF 165,000 34,428
</TABLE>
<TABLE>
<CAPTION>
SHARES
- ----------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 49.4%
- ----------------------------------------------------------------------------
BASIC MATERIALS - 2.8%
- ----------------------------------------------------------------------------
CHEMICALS - 1.3%
Agrium, Inc. 141,000 1,621,500
- ----------------------------------------------------------------------------
Bayer AG, Sponsored ADR 51,000 1,961,521
- ----------------------------------------------------------------------------
Dow Chemical Co. 8,000 697,000
- ----------------------------------------------------------------------------
Ecolab, Inc.(11) 30,000 1,432,500
- ----------------------------------------------------------------------------
Monsanto Co.(11) 12,000 516,750
- ----------------------------------------------------------------------------
Potash Corp. of Saskatchewan, Inc. 13,440 1,008,840
----------------
7,238,111
- ----------------------------------------------------------------------------
METALS - 1.0%
Alumax, Inc.(11)(12) 36,919 1,400,615
- ----------------------------------------------------------------------------
Brush Wellman, Inc. 90,000 1,884,375
- ----------------------------------------------------------------------------
Custom Chrome, Inc.(12) 59,000 951,375
- ----------------------------------------------------------------------------
Inco Ltd. 15,200 456,950
- ----------------------------------------------------------------------------
Oregon Metallurgical Corp.(12) 25,500 717,187
----------------
5,410,502
</TABLE>
57
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------------
<S> <C> <C>
PAPER - 0.5%
Aracruz Celulose SA, Sponsored ADR 56,499 $ 1,151,167
- ----------------------------------------------------------------------------
MacMillan Bloedel Ltd. 103,630 1,423,491
- ----------------------------------------------------------------------------
MacMillan Bloedel Ltd. 14,200 195,250
----------------
2,769,908
- ----------------------------------------------------------------------------
CONSUMER CYCLICALS - 9.1%
- ----------------------------------------------------------------------------
AUTOS & HOUSING - 0.7%
Champion Enterprises, Inc.(12) 70,000 1,050,000
- ----------------------------------------------------------------------------
General Motors Corp. 25,000 1,392,187
- ----------------------------------------------------------------------------
IRSA Inversiones y Representaciones
SA 214,506 939,650
- ----------------------------------------------------------------------------
Toll Brothers, Inc.(12) 42,000 771,750
----------------
4,153,587
- ----------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 4.7%
Alaska Air Group, Inc.(11)(12) 55,000 1,409,375
- ----------------------------------------------------------------------------
AMR Corp.(12) 25,500 2,358,750
- ----------------------------------------------------------------------------
Boston Chicken, Inc.(12) 129,000 1,806,000
- ----------------------------------------------------------------------------
Carnival Corp., Cl. A(11) 34,100 1,406,625
- ----------------------------------------------------------------------------
Cheesecake Factory (The)(12) 52,700 1,106,700
- ----------------------------------------------------------------------------
Cracker Barrel Old Country Store,
Inc. 57,000 1,510,500
- ----------------------------------------------------------------------------
Disney (Walt) Co.(11) 16,000 1,284,000
- ----------------------------------------------------------------------------
Eastman Kodak Co.(11) 12,000 921,000
- ----------------------------------------------------------------------------
Gaylord Entertainment Co., Cl.
A(11) 71,000 1,637,437
- ----------------------------------------------------------------------------
International Game Technology 105,000 1,863,750
- ----------------------------------------------------------------------------
Mattel, Inc.(11) 39,296 1,331,160
- ----------------------------------------------------------------------------
Mirage Resorts, Inc.(12) 23,000 580,750
- ----------------------------------------------------------------------------
Nintendo Co. Ltd. 32,000 2,684,610
- ----------------------------------------------------------------------------
Outback Steakhouse, Inc.(11)(12) 50,000 1,209,375
- ----------------------------------------------------------------------------
Primadonna Resorts, Inc.(11)(12) 48,000 927,000
- ----------------------------------------------------------------------------
Shangri-La Asia Ltd. 507,000 608,614
- ----------------------------------------------------------------------------
Shimano, Inc. 85,000 1,782,749
- ----------------------------------------------------------------------------
SkyWest, Inc. 65,000 1,015,625
- ----------------------------------------------------------------------------
Time Warner, Inc. 23,000 1,109,750
----------------
26,553,770
- ----------------------------------------------------------------------------
MEDIA - 1.2%
Comcast Corp., Cl. A Special(11) 100,000 2,137,500
- ----------------------------------------------------------------------------
Dow Jones & Co., Inc.(11) 36,000 1,446,750
- ----------------------------------------------------------------------------
South China Morning Post Holdings
Ltd. 1,300,000 1,275,286
- ----------------------------------------------------------------------------
U S West Media Group(12) 90,000 1,822,500
----------------
6,682,036
- ----------------------------------------------------------------------------
RETAIL: GENERAL - 0.6%
Cone Mills Corp.(12) 231,000 1,848,000
</TABLE>
58
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------------
RETAIL: GENERAL (CONTINUED)
<S> <C> <C>
Neiman-Marcus Group, Inc. 38,000 $ 997,500
- ----------------------------------------------------------------------------
Starter Corp.(12) 80,000 360,000
----------------
3,205,500
- ----------------------------------------------------------------------------
RETAIL: SPECIALTY - 1.9%
AutoZone, Inc.(12) 55,000 1,295,937
- ----------------------------------------------------------------------------
Books-A-Million, Inc.(12) 220,000 1,045,000
- ----------------------------------------------------------------------------
Castorama Dubois Investissements SA 4,131 581,907
- ----------------------------------------------------------------------------
Costco Cos., Inc.(11)(12) 41,400 1,361,025
- ----------------------------------------------------------------------------
General Nutrition Cos.,
Inc.(11)(12) 68,000 1,904,000
- ----------------------------------------------------------------------------
Gymboree Corp.(11)(12) 61,900 1,485,600
- ----------------------------------------------------------------------------
Movie Gallery, Inc.(12) 80,000 510,000
- ----------------------------------------------------------------------------
Toys 'R' Us, Inc.(12) 66,000 2,310,000
----------------
10,493,469
- ----------------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 8.8%
- ----------------------------------------------------------------------------
BEVERAGES - 0.5%
Guinness plc 180,000 1,761,496
- ----------------------------------------------------------------------------
PepsiCo, Inc. 27,000 1,014,187
----------------
2,775,683
- ----------------------------------------------------------------------------
FOOD - 1.0%
Chiquita Brands International, Inc. 109,080 1,499,850
- ----------------------------------------------------------------------------
Groupe Danone 10,413 1,722,217
- ----------------------------------------------------------------------------
Nestle SA, Sponsored ADR 12,000 792,674
- ----------------------------------------------------------------------------
Sara Lee Corp.(11) 41,000 1,706,625
----------------
5,721,366
- ----------------------------------------------------------------------------
HEALTHCARE/DRUGS - 3.3%
Abbott Laboratories(11) 26,000 1,735,500
- ----------------------------------------------------------------------------
American Home Products Corp. 26,000 1,989,000
- ----------------------------------------------------------------------------
Amgen, Inc.(12) 13,500 784,687
- ----------------------------------------------------------------------------
Astra AB Free, Series A 60,000 1,117,379
- ----------------------------------------------------------------------------
BioChem Pharma, Inc.(12) 35,000 778,750
- ----------------------------------------------------------------------------
Bristol-Myers Squibb Co.(11) 19,000 1,539,000
- ----------------------------------------------------------------------------
Genzyme Corp. (General
Division)(12) 60,000 1,665,000
- ----------------------------------------------------------------------------
Johnson & Johnson(11) 38,000 2,446,250
- ----------------------------------------------------------------------------
Mylan Laboratories, Inc. 110,000 1,622,500
- ----------------------------------------------------------------------------
Novartis AG 2,106 3,371,680
- ----------------------------------------------------------------------------
SmithKline Beecham plc, ADR 19,600 1,795,850
----------------
18,845,596
- ----------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
2.8%
Alternative Living Services,
Inc.(12) 73,000 1,637,937
- ----------------------------------------------------------------------------
Apache Medical Systems, Inc.(12) 122,000 930,250
</TABLE>
59
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES
(CONTINUED)
<S> <C> <C>
Biomet, Inc. 80,000 $ 1,490,000
- ----------------------------------------------------------------------------
Datascope Corp.(12) 31,500 618,187
- ----------------------------------------------------------------------------
HemaSure, Inc.(12) 135,500 372,625
- ----------------------------------------------------------------------------
Innovasive Devices, Inc.(12) 85,000 998,750
- ----------------------------------------------------------------------------
Integrated Health Services,
Inc.(11) 32,500 1,251,250
- ----------------------------------------------------------------------------
Manor Care, Inc. 44,985 1,467,636
- ----------------------------------------------------------------------------
MedPartners, Inc.(12) 23,000 497,375
- ----------------------------------------------------------------------------
Nellcor Puritan Bennett, Inc.(12) 95,600 1,732,750
- ----------------------------------------------------------------------------
PerSeptive Biosystems, Inc.(12) 440 2,695
- ----------------------------------------------------------------------------
United Healthcare Corp.(11) 24,000 1,248,000
- ----------------------------------------------------------------------------
United States Surgical Corp. 28,000 1,043,000
- ----------------------------------------------------------------------------
WellPoint Health Networks,
Inc.(11)(12) 49,981 2,292,878
----------------
15,583,333
- ----------------------------------------------------------------------------
HOUSEHOLD GOODS - 0.5%
Kimberly-Clark Corp.(11) 26,200 1,303,450
- ----------------------------------------------------------------------------
Procter & Gamble Co.(11) 2,600 367,250
- ----------------------------------------------------------------------------
Wella AG 1,550 1,040,726
- ----------------------------------------------------------------------------
Wella AG, Preference 200 135,205
----------------
2,846,631
- ----------------------------------------------------------------------------
TOBACCO - 0.7%
Imperial Tobacco Group plc 190,000 1,220,598
- ----------------------------------------------------------------------------
Philip Morris Cos., Inc. 62,400 2,769,000
----------------
3,989,598
- ----------------------------------------------------------------------------
ENERGY - 3.8%
- ----------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 1.3%
Global Marine, Inc.(11)(12) 42,000 976,500
- ----------------------------------------------------------------------------
Louisiana Land & Exploration Co. 35,000 1,999,375
- ----------------------------------------------------------------------------
Transocean Offshore, Inc. 19,000 1,379,875
- ----------------------------------------------------------------------------
Weatherford Enterra, Inc.(11)(12) 29,000 1,116,500
- ----------------------------------------------------------------------------
Western Atlas, Inc.(12) 24,000 1,758,000
----------------
7,230,250
- ----------------------------------------------------------------------------
OIL-INTEGRATED - 2.5%
Atlantic Richfield Co.(11) 32,000 2,256,000
- ----------------------------------------------------------------------------
Elan Energy, Inc.(12) 154,000 1,110,718
- ----------------------------------------------------------------------------
Enterprise Oil plc 100,000 1,120,074
- ----------------------------------------------------------------------------
Kerr-McGee Corp.(11) 12,000 760,500
- ----------------------------------------------------------------------------
Occidental Petroleum Corp. 41,000 1,027,563
- ----------------------------------------------------------------------------
Royal Dutch Petroleum Co., NY
Shares(11) 34,400 1,846,850
- ----------------------------------------------------------------------------
Talisman Energy, Inc.(12) 34,000 1,046,205
- ----------------------------------------------------------------------------
Total SA, Sponsored ADR(11) 21,701 1,098,613
</TABLE>
60
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------------
OIL-INTEGRATED (CONTINUED)
<S> <C> <C>
Unocal Corp.(11) 50,000 $ 1,940,625
- ----------------------------------------------------------------------------
YPF SA, Cl. D, ADR 57,000 1,752,750
----------------
13,959,898
- ----------------------------------------------------------------------------
FINANCIAL - 6.0%
- ----------------------------------------------------------------------------
BANKS - 2.9%
Akbank T.A.S. 4,730,015 406,235
- ----------------------------------------------------------------------------
Banco Frances del Rio de la Plata
SA 100,050 1,087,675
- ----------------------------------------------------------------------------
Chase Manhattan Corp. (New)(11) 61,000 5,920,813
- ----------------------------------------------------------------------------
NationsBank Corp. 86,000 5,547,000
- ----------------------------------------------------------------------------
PNC Bank Corp. 32,000 1,332,000
- ----------------------------------------------------------------------------
Societe Generale 16,700 1,866,006
----------------
16,159,729
- ----------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 1.5%
American Express Co.(11) 38,000 2,831,000
- ----------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp.(11) 43,000 1,478,125
- ----------------------------------------------------------------------------
Merrill Lynch & Co., Inc.(11) 26,000 1,550,250
- ----------------------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co.(11) 56,000 2,411,500
----------------
8,270,875
- ----------------------------------------------------------------------------
INSURANCE - 1.6%
ACE Ltd. 31,500 2,327,063
- ----------------------------------------------------------------------------
American International Group,
Inc.(11) 10,200 1,523,625
- ----------------------------------------------------------------------------
Equitable Cos., Inc.(11) 57,000 1,895,250
- ----------------------------------------------------------------------------
Skandia Forsakrings AB 40,000 1,474,320
- ----------------------------------------------------------------------------
UNUM Corp.(11) 46,000 1,932,000
----------------
9,152,258
- ----------------------------------------------------------------------------
INDUSTRIAL - 5.8%
- ----------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 1.4%
Core Industries, Inc. 25,000 618,750
- ----------------------------------------------------------------------------
General Electric Co.(11) 34,000 2,222,750
- ----------------------------------------------------------------------------
Methode Electronics, Inc., Cl. A 95,000 1,888,125
- ----------------------------------------------------------------------------
Rockwell International Corp.(11) 25,000 1,475,000
- ----------------------------------------------------------------------------
Westinghouse Electric Corp. 70,000 1,618,750
----------------
7,823,375
- ----------------------------------------------------------------------------
INDUSTRIAL MATERIALS - 0.7%
Owens Corning(11) 44,000 1,897,500
- ----------------------------------------------------------------------------
Wolverine Tube, Inc.(12) 73,500 2,048,813
----------------
3,946,313
- ----------------------------------------------------------------------------
INDUSTRIAL SERVICES - 0.3%
Calgon Carbon Corp. 101,000 1,401,375
</TABLE>
61
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------------
INDUSTRIAL SERVICES (CONTINUED)
<S> <C> <C>
Children's Comprehensive Services,
Inc.(12) 40,000 $ 565,000
----------------
1,966,375
- ----------------------------------------------------------------------------
MANUFACTURING - 2.0%
AGCO Corp. 60,000 2,156,250
- ----------------------------------------------------------------------------
Citic Pacific Ltd. 110,000 687,209
- ----------------------------------------------------------------------------
Cognex Corp.(11)(12) 40,000 1,060,000
- ----------------------------------------------------------------------------
Eaton Corp.(11) 16,000 1,397,000
- ----------------------------------------------------------------------------
Hutchison Whampoa Ltd. 70,000 605,374
- ----------------------------------------------------------------------------
Komatsu Ltd. 48,000 390,107
- ----------------------------------------------------------------------------
Mannesmann AG 1,400 625,870
- ----------------------------------------------------------------------------
Tenneco, Inc.(11) 32,000 1,446,000
- ----------------------------------------------------------------------------
Trinity Industries, Inc. 41,000 1,301,750
- ----------------------------------------------------------------------------
Westinghouse Air Brake Co. 80,000 1,600,000
----------------
11,269,560
- ----------------------------------------------------------------------------
TRANSPORTATION - 1.4%
Airborne Freight Corp.(11) 23,600 988,250
- ----------------------------------------------------------------------------
Burlington Northern Santa Fe
Corp.(11) 26,000 2,336,750
- ----------------------------------------------------------------------------
Canadian National Railway Co. 25,500 1,112,748
- ----------------------------------------------------------------------------
Spartan Motors, Inc. 118,000 914,500
- ----------------------------------------------------------------------------
Stolt-Nielsen SA 72,100 1,360,888
- ----------------------------------------------------------------------------
Stolt-Nielsen SA, Sponsored ADR 22,050 427,219
- ----------------------------------------------------------------------------
Transportacion Maritima Mexicana SA
de CV, Sponsored ADR, L Shares 130,000 804,375
----------------
7,944,730
- ----------------------------------------------------------------------------
TECHNOLOGY - 11.3%
- ----------------------------------------------------------------------------
AEROSPACE/DEFENSE - 0.3%
Lockheed Martin Corp. 18,000 1,864,125
- ----------------------------------------------------------------------------
COMPUTER HARDWARE - 2.3%
Cabletron Systems, Inc.(11)(12) 48,000 1,359,000
- ----------------------------------------------------------------------------
Canon, Inc. 40,000 1,090,623
- ----------------------------------------------------------------------------
Hewlett-Packard Co. 25,000 1,400,000
- ----------------------------------------------------------------------------
International Business Machines
Corp.(11) 38,400 3,463,200
- ----------------------------------------------------------------------------
Komag, Inc.(11)(12) 33,000 540,375
- ----------------------------------------------------------------------------
Moore Corp. Ltd. 72,000 1,417,500
- ----------------------------------------------------------------------------
Seagate Technology(12) 14,000 492,625
- ----------------------------------------------------------------------------
Xerox Corp.(11) 43,500 3,431,063
----------------
13,194,386
- ----------------------------------------------------------------------------
COMPUTER SOFTWARE - 2.6%
America Online, Inc.(11)(12) 32,540 1,810,038
- ----------------------------------------------------------------------------
American Software, Inc.(12) 80,000 601,250
- ----------------------------------------------------------------------------
Business Objects SA, Sponsored
ADR(12) 41,700 406,575
</TABLE>
62
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------------
COMPUTER SOFTWARE (CONTINUED)
<S> <C> <C>
Computer Associates International,
Inc.(11) 50,975 $ 2,838,670
- ----------------------------------------------------------------------------
Electronic Arts, Inc.(11)(12) 55,000 1,849,375
- ----------------------------------------------------------------------------
Inference Corp., Cl. A(12) 160,000 670,000
- ----------------------------------------------------------------------------
Novell, Inc.(12) 158,000 1,096,125
- ----------------------------------------------------------------------------
Rational Software Corp.(11)(12) 73,000 1,227,313
- ----------------------------------------------------------------------------
Sabre Group Holdings, Inc.(12) 32,200 873,425
- ----------------------------------------------------------------------------
Structural Dynamics Research
Corp.(11)(12) 21,000 551,250
- ----------------------------------------------------------------------------
Symantec Corp.(11)(12) 88,364 1,723,098
- ----------------------------------------------------------------------------
Transition Systems, Inc.(12) 57,700 1,049,419
----------------
14,696,538
- ----------------------------------------------------------------------------
ELECTRONICS - 4.0%
CAE, Inc. 75,433 601,470
- ----------------------------------------------------------------------------
Dynatech Corp.(11)(12) 30,000 1,072,500
- ----------------------------------------------------------------------------
General Motors Corp., Cl. H(11) 24,000 1,386,000
- ----------------------------------------------------------------------------
Input/Output, Inc.(12) 138,000 2,501,250
- ----------------------------------------------------------------------------
Intel Corp.(11) 65,000 9,217,813
- ----------------------------------------------------------------------------
Keyence Corp. 7,700 1,143,930
- ----------------------------------------------------------------------------
Kyocera Corp. 14,000 1,113,344
- ----------------------------------------------------------------------------
LSI Logic Corp.(11)(12) 33,800 1,081,600
- ----------------------------------------------------------------------------
Nokia Corp., A Shares, Sponsored
ADR(11) 18,400 1,357,000
- ----------------------------------------------------------------------------
Novellus Systems, Inc.(11)(12) 14,200 1,228,300
- ----------------------------------------------------------------------------
SGS-Thomson Microelectronics NV(12) 13,000 1,040,000
- ----------------------------------------------------------------------------
Xilinx, Inc.(11)(12) 16,400 804,625
----------------
22,547,832
- ----------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
2.1%
Airtouch Communications, Inc.(12) 75,600 2,069,550
- ----------------------------------------------------------------------------
Cisco Systems, Inc.(11)(12) 40,000 2,685,000
- ----------------------------------------------------------------------------
ECI Telecommunications Ltd.(11) 77,000 2,290,750
- ----------------------------------------------------------------------------
Kinnevik Investments AB Free,
Series B 24,500 681,226
- ----------------------------------------------------------------------------
MCI Communications Corp.(11) 11,400 436,406
- ----------------------------------------------------------------------------
Newbridge Networks Corp.(11)(12) 39,000 1,696,500
- ----------------------------------------------------------------------------
Qwest Communications International,
Inc.(12) 34,300 934,675
- ----------------------------------------------------------------------------
SK Telecom Co. Ltd. 325 243,778
- ----------------------------------------------------------------------------
Tellabs, Inc.(11)(12) 14,000 782,250
----------------
11,820,135
- ----------------------------------------------------------------------------
UTILITIES - 1.8%
- ----------------------------------------------------------------------------
ELECTRIC UTILITIES - 1.0%
Allegheny Power System, Inc. 42,000 1,120,875
- ----------------------------------------------------------------------------
Houston Industries, Inc. 33,700 722,444
- ----------------------------------------------------------------------------
PacifiCorp 60,000 1,320,000
</TABLE>
63
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------------------
ELECTRIC UTILITIES (CONTINUED)
<S> <C> <C>
Public Service Enterprise Group,
Inc. 52,000 $ 1,300,000
- ----------------------------------------------------------------------------
Southern Co. 49,000 1,071,875
----------------
5,535,194
- ----------------------------------------------------------------------------
GAS UTILITIES - 0.0%
Southwestern Energy Co. 24,000 312,000
- ----------------------------------------------------------------------------
TELEPHONE UTILITIES - 0.8%
BCE, Inc. 47,200 1,321,600
- ----------------------------------------------------------------------------
SBC Communications, Inc. 19,000 1,175,625
- ----------------------------------------------------------------------------
U S West Communications Group(11) 62,000 2,336,625
----------------
4,833,850
----------------
Total Common Stocks (Cost
$199,016,868) 278,796,513
- ----------------------------------------------------------------------------
PREFERRED STOCKS - 0.1%
- ----------------------------------------------------------------------------
K-III Communications Corp., Sr.
Exchangeable, Series A 20,000 537,500
- ----------------------------------------------------------------------------
Time Warner, Inc., 10.25%
Exchangeable Preferred, Series
M(6)(12) 1 1,139
----------------
Total Preferred Stocks (Cost
$500,000) 538,639
- ----------------------------------------------------------------------------
OTHER SECURITIES - 0.2%
- ----------------------------------------------------------------------------
Pantry Pride, Inc., $14.875
Exchangeable, Series B (Cost
$782,000) 8,000 803,500
UNITS
- ----------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ----------------------------------------------------------------------------
American Telecasting, Inc. Wts.,
Exp. 6/99(10) 6,000 3,030
- ----------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp.
11/02 9,232 73,856
- ----------------------------------------------------------------------------
Hong Kong & China Gas Co. Ltd.
Wts., Exp. 9/97 29,376 31,472
- ----------------------------------------------------------------------------
IHF Capital, Inc., Series I Wts.,
Exp. 11/99(10) 1,000 55,000
- ----------------------------------------------------------------------------
PerSeptive Biosystems, Inc. Wts.,
Exp. 9/03 249 --
- ----------------------------------------------------------------------------
Terex Corp. Rts., Exp. 5/02(10) 4,000 61,000
----------------
Total Rights, Warrants and
Certificates (Cost $28,557) 224,358
PRINCIPAL
AMOUNT(1)
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 20.3%
- ----------------------------------------------------------------------------
Repurchase agreement with J.P.
Morgan Securities, Inc., 5.95%,
dated 6/30/97, to be repurchased at
$114,418,908 on 7/1/97,
collateralized by U.S. Treasury
Bonds, 8.875%-12%, 8/15/13-2/15/19,
with a value of $107,347,235 and
U.S. Treasury Nts., 7.875%,
11/15/04, with a value of
$9,788,635 (Cost $114,400,000) $ 114,400,000 114,400,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$478,318,980) 100.8% 568,986,904
- ----------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (0.8) (4,474,572 )
---------------- ----------------
NET ASSETS 100.0% $ 564,512,332
---------------- ----------------
---------------- ----------------
</TABLE>
64
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
1. Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
<TABLE>
<S> <C> <C> <C> <C> <C>
British Pound
AUD - Australian Dollar GBP - Sterling
CAD - Canadian Dollar IEP - Irish Punt
CZK - Czech Koruna NZD - New Zealand Dollar
DKK - Danish Krone PLZ - Polish Zloty
FRF - French Franc ZAR - South African Rand
</TABLE>
2. When-issued security to be delivered and settled after June 30, 1997.
3. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
4. Securities with an aggregate market value of $4,998,440 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
5. Represents the current interest rate for a variable rate security.
6. Interest or dividend is paid in kind.
7. Represents the current interest rate for an increasing rate security.
8. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
9. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $1,328,875 or 0.24% of the Fund's net
assets, at June 30, 1997.
10. Identifies issues considered to be illiquid or restricted - See Note 7 of
Notes to Financial Statements.
11. A sufficient amount of securities 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 NOTE 1
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Abbott Laboratories 5,200 11/97 $ 65.00 $ 13,494 $ 26,000
Airborne Freight Corp. 17,200 11/97 40.00 41,408 79,550
Airborne Freight Corp. 6,400 8/97 30.00 7,808 74,400
Alaska Air Group, Inc. 5,000 7/97 25.00 6,850 5,000
Alumax, Inc. 6,400 7/97 40.00 15,407 800
American Express Co. 7,600 10/97 75.00 16,871 49,400
American Express Co. 7,600 7/97 60.00 11,647 113,050
American International Group, Inc. 2,000 11/97 130.00 16,939 45,250
America Online, Inc. 6,400 10/97 60.00 16,808 26,400
Atlantic Richfield Co. 5,600 7/97 72.50 6,041 4,900
Bristol-Myers Squibb Co. 8,000 12/97 70.00 32,759 104,000
Burlington Northern Santa Fe Corp. 5,200 10/97 90.00 7,644 25,350
Cabletron Systems, Inc. 8,800 10/97 40.00 36,035 4,400
Carnival Corp., Cl. A 5,000 10/97 40.00 10,475 18,125
Carnival Corp., Cl. A 1,900 7/97 35.00 2,793 11,875
Chase Manhattan Corp. (New) 9,000 9/97 115.00 15,479 5,625
Cisco Systems, Inc. 8,000 10/97 75.00 23,759 27,000
Cisco Systems, Inc. 2,600 7/97 85.00 10,322 325
Cognex Corp. 8,000 11/97 30.00 16,259 13,000
Comcast Corp., Cl. A Special 20,000 1/98 20.00 17,099 62,500
Computer Associates International, Inc. 10,000 10/97 55.00 44,699 51,250
Costco Cos., Inc. 11,600 7/97 30.00 11,644 34,800
Costco Cos., Inc. 15,000 10/97 35.00 19,424 32,813
Disney (Walt) Co. 5,000 10/97 85.00 15,474 10,000
</TABLE>
65
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
SHARES
11. Outstanding written call options SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE
(continued) TO CALL DATE PRICE RECEIVED NOTE 1
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Disney (Walt) Co. 4,000 7/97 $ 80.00 $ 9,880 $ 5,500
Dow Jones & Co., Inc. 14,400 12/97 45.00 29,717 27,000
Dow Jones & Co., Inc. 7,200 9/97 50.00 17,333 2,700
Dynatech Corp. 6,000 10/97 40.00 25,319 20,250
ECI Telecommunications Ltd. 7,400 8/97 25.00 13,653 37,925
Eastman Kodak Co. 12,000 7/97 90.00 35,139 750
Eaton Corp. 3,200 7/97 75.00 5,504 38,000
Ecolab, Inc. 6,000 10/97 45.00 10,320 29,250
Electronic Arts, Inc. 16,500 12/97 35.00 61,378 74,250
Equitable Cos., Inc. 11,000 1/98 35.00 21,669 27,500
Federal Home Loan Mortgage Corp. 7,200 7/97 30.00 10,521 36,900
Gaylord Entertainment Co., Cl. A 10,000 9/97 30.00 18,496 625
General Electric Co. 6,800 12/97 60.00 17,322 56,100
General Motors Corp., Cl. H 3,100 12/97 60.00 6,882 10,850
General Nutrition Cos., Inc. 13,000 10/97 25.00 15,859 55,250
Global Marine, Inc. 8,400 1/98 25.00 20,747 21,000
Gymboree Corp. 12,000 10/97 30.00 13,890 7,500
Integrated Health Services, Inc. 2,000 12/97 40.00 2,815 5,625
Intel Corp. 8,500 1/98 195.00 53,931 26,563
Intel Corp. 7,000 10/97 170.00 53,163 27,125
International Business Machines Corp. 7,600 7/97 92.50 11,286 15,200
Johnson & Johnson 5,800 7/97 60.00 16,500 25,375
Kerr-McGee Corp. 2,400 7/97 75.00 4,728 450
Kimberly-Clark Corp. 5,200 7/97 50.00 12,597 7,800
Komag, Inc. 5,600 12/97 35.00 31,331 700
LSI Logic Corp. 6,600 10/97 45.00 37,751 6,600
LSI Logic Corp. 7,400 7/97 35.00 20,127 6,013
MCI Communications Corp. 11,400 7/97 32.50 23,882 65,550
Mattel, Inc. 6,400 7/97 35.00 6,608 3,200
Merrill Lynch & Co., Inc. 2,600 1/98 60.00 7,397 17,550
Monsanto Co. 3,600 10/97 45.00 6,192 7,650
Monsanto Co. 3,600 7/97 45.00 7,092 1,575
Morgan Stanley, Dean Witter, Discover &
Co. 9,200 7/97 45.00 20,998 4,025
Morgan Stanley, Dean Witter, Discover &
Co. 9,200 7/97 35.00 14,812 75,900
Newbridge Networks Corp. 7,800 12/97 45.00 33,890 36,075
Nokia Corp., A Shares, Sponsored ADR 4,000 10/97 70.00 14,880 33,000
Nokia Corp., A Shares, Sponsored ADR 4,600 7/97 70.00 27,461 23,000
Novellus Systems, Inc. 3,000 9/97 85.00 31,409 31,875
Novellus Systems, Inc. 6,000 9/97 95.00 29,819 36,000
Outback Steakhouse, Inc. 10,000 11/97 25.00 17,824 21,250
Owens Corning 6,200 12/97 45.00 17,638 17,050
Owens Corning 6,600 9/97 55.00 10,939 413
Primadonna Resorts, Inc. 9,600 10/97 22.50 28,511 6,000
Procter & Gamble Co. 2,600 7/97 115.00 8,372 65,000
Rational Software Corp. 14,600 10/97 25.00 12,483 7,300
Rockwell International Corp. 4,800 7/97 75.00 10,656 900
Royal Dutch Petroleum Co., NY Shares 7,200 7/97 43.75 11,420 64,800
Sara Lee Corp. 8,200 10/97 45.00 11,028 8,200
Structural Dynamics Research Corp. 10,000 11/97 25.00 20,324 32,500
</TABLE>
66
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
SHARES
11. Outstanding written call options SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE
(continued) TO CALL DATE PRICE RECEIVED NOTE 1
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Symantec Corp. 17,600 1/98 $ 20.00 $ 54,470 $ 52,800
Symantec Corp. 17,600 10/97 17.50 21,471 57,200
Tellabs, Inc. 5,200 12/97 55.00 23,243 39,650
Tenneco, Inc. 5,500 8/97 50.00 8,772 1,031
Total SA, Sponsored ADR 4,200 11/97 45.00 5,984 30,975
U S West Communications Group 11,000 7/97 35.00 13,419 29,562
UNUM Corp. 8,400 12/97 45.00 37,547 19,425
United Healthcare Corp. 4,800 9/97 60.00 7,356 4,800
Unocal Corp. 10,000 10/97 45.00 18,449 6,250
Weatherford Enterra, Inc. 1,500 9/97 40.00 3,986 2,906
WellPoint Health Networks, Inc. 2,300 1/98 50.00 12,580 9,487
WellPoint Health Networks, Inc. 10,000 7/97 35.00 34,699 108,750
Xerox Corp. 8,600 10/97 70.00 20,704 95,675
Xilinx, Inc. 4,000 12/97 60.00 33,379 15,500
---------- ------------
$1,664,690 $2,431,438
---------- ------------
---------- ------------
</TABLE>
12. Non-income producing security.
See accompanying Notes to Financial Statements.
67
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 9.6%
- ------------------------------------------------------------------------
U.S. Treasury Bonds, STRIPS, Zero
Coupon:
6.976%, 11/15/18(1) $ 86,770,000 $ 19,818,344
6.93%, 2/15/19(1) 87,000,000 19,527,661
6.933%, 8/15/19(1) 180,000,000 39,113,443
---------------
Total U.S. Government Obligations
(Cost $79,835,910) 78,459,448
SHARES
- ------------------------------------------------------------------------
COMMON STOCKS - 79.5%
- ------------------------------------------------------------------------
BASIC MATERIALS - 1.6%
- ------------------------------------------------------------------------
CHEMICALS - 0.5%
Minerals Technologies, Inc. 100,000 3,750,000
- ------------------------------------------------------------------------
GOLD AND PLATINUM - 0.6%
Newmont Mining Corp. 120,500 4,699,500
- ------------------------------------------------------------------------
METALS - 0.5%
Cia de Minas Buenaventura SA,
Sponsored ADR 46,000 905,625
- ------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold,
Inc., Cl. B 107,000 3,330,375
---------------
4,236,000
- ------------------------------------------------------------------------
CONSUMER CYCLICALS - 10.3%
- ------------------------------------------------------------------------
AUTOS & HOUSING - 2.9%
Brazil Realty SA, GDR(2) 60,000 1,488,084
- ------------------------------------------------------------------------
IRSA Inversiones y Representaciones
SA 1,028,807 4,506,720
- ------------------------------------------------------------------------
Mahindra & Mahindra Ltd., GDR(2) 200,000 2,950,000
- ------------------------------------------------------------------------
Porsche AG, Preference 9,750 12,701,330
- ------------------------------------------------------------------------
Solidere, GDR(3) 110,000 1,955,250
---------------
23,601,384
- ------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 5.0%
Callaway Golf Co. 220,800 7,838,400
- ------------------------------------------------------------------------
International Game Technology 500,000 8,875,000
- ------------------------------------------------------------------------
Nintendo Co. Ltd. 275,000 23,070,867
- ------------------------------------------------------------------------
Resorts World Berhad 563,000 1,695,243
---------------
41,479,510
- ------------------------------------------------------------------------
MEDIA - 0.0%
Reed International plc 33,200 320,478
- ------------------------------------------------------------------------
RETAIL: GENERAL - 1.7%
Credit Saison Co. Ltd. 290,000 7,096,039
- ------------------------------------------------------------------------
PT Matahari Putra Prima 1,000,000 2,015,217
- ------------------------------------------------------------------------
Sonae Investimentos 118,000 4,939,769
---------------
14,051,025
- ------------------------------------------------------------------------
RETAIL: SPECIALTY - 0.7%
Giordano International Ltd. 2,100,000 1,436,633
- ------------------------------------------------------------------------
Reebok International Ltd. 71,000 3,319,250
</TABLE>
68
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
RETAIL: SPECIALTY (CONTINUED)
<S> <C> <C>
Wolford AG 12,450 $ 1,208,343
---------------
5,964,226
- ------------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 14.5%
- ------------------------------------------------------------------------
BEVERAGES - 2.5%
Cia Cervejaria Brahma, Preference 4,700,000 3,601,790
- ------------------------------------------------------------------------
Guinness plc 700,000 6,850,261
- ------------------------------------------------------------------------
Hellenic Bottling Co., SA 35,000 1,294,950
- ------------------------------------------------------------------------
Panamerican Beverages, Inc., Cl. A 100,000 3,287,500
- ------------------------------------------------------------------------
South African Breweries Ltd. 178,900 5,492,582
---------------
20,527,083
- ------------------------------------------------------------------------
FOOD - 1.1%
Cresud SA, Sponsored ADR(3) 95,000 2,113,750
- ------------------------------------------------------------------------
Dairy Farm International Holdings
Ltd. 4,750,000 3,562,500
- ------------------------------------------------------------------------
Disco SA, Sponsored ADR(3) 93,200 3,693,050
---------------
9,369,300
- ------------------------------------------------------------------------
HEALTHCARE/DRUGS - 5.0%
Amgen, Inc.(3) 100,000 5,812,500
- ------------------------------------------------------------------------
BioChem Pharma, Inc.(3) 198,900 4,425,525
- ------------------------------------------------------------------------
Genzyme Corp. (General Division)(3) 220,800 6,127,200
- ------------------------------------------------------------------------
Gilead Sciences, Inc.(3) 72,700 2,008,337
- ------------------------------------------------------------------------
Glaxo Wellcome plc, Sponsored ADR 200,000 8,362,500
- ------------------------------------------------------------------------
Novartis AG 9,000 14,408,890
---------------
41,144,952
- ------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
2.3%
Gehe AG 69,990 4,819,877
- ------------------------------------------------------------------------
United States Surgical Corp. 381,500 14,210,875
---------------
19,030,752
- ------------------------------------------------------------------------
HOUSEHOLD GOODS - 2.2%
Wella AG, Preference 27,000 18,252,728
- ------------------------------------------------------------------------
TOBACCO - 1.4%
B.A.T. Industries plc 600,000 5,367,369
- ------------------------------------------------------------------------
Philip Morris Cos., Inc. 120,000 5,325,000
- ------------------------------------------------------------------------
PT Gudang Garam 79,500 333,498
- ------------------------------------------------------------------------
PT Hanjaya Mandala Sampoerna 100,000 381,452
---------------
11,407,319
- ------------------------------------------------------------------------
ENERGY - 5.6%
- ------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 2.8%
Coflexip SA, Sponsored ADR 105,000 3,163,125
- ------------------------------------------------------------------------
Global Marine, Inc.(3) 117,500 2,731,875
- ------------------------------------------------------------------------
Mosenergo, Sponsored ADR(3) 82,000 3,486,221
</TABLE>
69
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS
(CONTINUED)
<S> <C> <C>
Transocean Offshore, Inc. 135,459 $ 9,837,710
- ------------------------------------------------------------------------
Western Atlas, Inc.(3) 49,300 3,611,225
---------------
22,830,156
- ------------------------------------------------------------------------
OIL-INTEGRATED - 2.8%
British Petroleum Co. plc, ADR 51,818 3,879,873
- ------------------------------------------------------------------------
Gulf Canada Resources Ltd.(3) 565,600 4,632,846
- ------------------------------------------------------------------------
Lukoil Oil Co., Sponsored ADR 66,900 5,279,460
- ------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference 27,698,000 7,589,917
- ------------------------------------------------------------------------
Saga Petroleum AS, Cl. A 100,000 1,898,701
---------------
23,280,797
- ------------------------------------------------------------------------
FINANCIAL - 16.4%
- ------------------------------------------------------------------------
BANKS - 10.5%
ABN Amro Holding NV 280,000 5,230,381
- ------------------------------------------------------------------------
Banco Bradesco SA, Preference 455,260,951 4,567,208
- ------------------------------------------------------------------------
Banco Frances del Rio de la Plata
SA, Sponsored ADR 63,250 2,055,625
- ------------------------------------------------------------------------
Banco Latinoamericano de
Exportaciones SA, Cl. E 80,000 3,450,000
- ------------------------------------------------------------------------
Bankers Trust New York Corp. 90,000 7,830,000
- ------------------------------------------------------------------------
Banque Libanaise Pour Le Comm SAL,
GDR, Cl. B(3) 50,000 1,042,500
- ------------------------------------------------------------------------
Barclays plc 300,414 5,959,752
- ------------------------------------------------------------------------
Chase Manhattan Corp. (New) 52,000 5,047,250
- ------------------------------------------------------------------------
Cie Financiere de Paribas, Series A 250,000 17,288,555
- ------------------------------------------------------------------------
Citicorp 45,000 5,425,312
- ------------------------------------------------------------------------
HSBC Holdings plc 154,836 4,656,703
- ------------------------------------------------------------------------
Industrial Finance Corp. 1,048,000 1,335,032
- ------------------------------------------------------------------------
Merita Ltd., Cl. A 2,000,000 6,661,205
- ------------------------------------------------------------------------
Northern Trust Corp. 9,100 440,213
- ------------------------------------------------------------------------
PT Pan Indonesia Bank(3) 1,939,000 1,275,920
- ------------------------------------------------------------------------
Societe Generale 110,000 12,291,055
- ------------------------------------------------------------------------
Unibanco-Uniao de Bancos
Brasileiros SA, Sponsored GDR
Representing 500 Units of one
Preferred Share of Unibanco and one
Preferred Share of Unibanco
Holdings SA(3) 44,000 1,633,500
---------------
86,190,211
- ------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 3.7%
American Express Co. 24,500 1,825,250
- ------------------------------------------------------------------------
Associates First Capital Corp., Cl.
A 160,000 8,880,000
- ------------------------------------------------------------------------
Fannie Mae 150,000 6,543,750
- ------------------------------------------------------------------------
First NIS Regional Fund(4) 180,000 3,420,000
- ------------------------------------------------------------------------
Housing Development Finance Corp.
Ltd. 5,700 650,046
- ------------------------------------------------------------------------
Industrial Credit & Investment
Corp. of India Ltd. (The),
GDR(2)(3) 162,500 2,335,938
- ------------------------------------------------------------------------
ING Groep NV 90,432 4,177,004
</TABLE>
70
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
DIVERSIFIED FINANCIAL (CONTINUED)
<S> <C> <C>
Promise Co. Ltd. 40,000 $ 2,293,104
---------------
30,125,092
- ------------------------------------------------------------------------
INSURANCE - 2.2%
American International Group, Inc. 35,000 5,228,125
- ------------------------------------------------------------------------
Norwich Union plc(3) 850,000 4,498,604
- ------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 783,000 2,367,118
- ------------------------------------------------------------------------
Skandia Forsakrings AB 166,800 6,147,914
---------------
18,241,761
- ------------------------------------------------------------------------
INDUSTRIAL - 8.4%
- ------------------------------------------------------------------------
INDUSTRIAL SERVICES - 5.1%
Adecco SA 35,000 13,444,456
- ------------------------------------------------------------------------
Axime(3) 50,000 5,918,988
- ------------------------------------------------------------------------
Boskalis Westminster 85,500 1,680,045
- ------------------------------------------------------------------------
Grupo Elektra SA de CV, CPO(3) 146,100 1,596,086
- ------------------------------------------------------------------------
IHC Caland NV 45,000 2,464,373
- ------------------------------------------------------------------------
PT Citra Marga Nusaphala Persada 2,331,000 1,366,101
- ------------------------------------------------------------------------
VBH Holding AG 247,000 5,358,059
- ------------------------------------------------------------------------
WPP Group plc 2,520,000 10,338,302
---------------
42,166,410
- ------------------------------------------------------------------------
MANUFACTURING - 2.8%
Bic Corp. 17,966 2,940,813
- ------------------------------------------------------------------------
Bobst Bearers AG 2,000 3,402,270
- ------------------------------------------------------------------------
Bombardier, Inc., Cl. B 250,000 5,672,107
- ------------------------------------------------------------------------
Hutchison Whampoa Ltd. 375,000 3,243,073
- ------------------------------------------------------------------------
Powerscreen International plc 730,100 7,952,868
---------------
23,211,131
- ------------------------------------------------------------------------
TRANSPORTATION - 0.5%
Guangshen Railway Co. Ltd.,
Sponsored ADR 180,000 3,937,500
- ------------------------------------------------------------------------
TECHNOLOGY - 17.7%
- ------------------------------------------------------------------------
AEROSPACE/DEFENSE - 1.1%
Rolls-Royce plc 2,300,723 8,768,627
- ------------------------------------------------------------------------
COMPUTER HARDWARE - 2.5%
Accton Technology Corp., GDR(3) 100,000 875,000
- ------------------------------------------------------------------------
International Business Machines
Corp. 140,000 12,626,250
- ------------------------------------------------------------------------
Iomega Corp.(3) 350,000 6,956,250
---------------
20,457,500
- ------------------------------------------------------------------------
COMPUTER SOFTWARE - 3.6%
Cap Gemini SA 210,000 11,088,521
- ------------------------------------------------------------------------
First Data Corp. 87,000 3,822,563
- ------------------------------------------------------------------------
Konami Co. Ltd. 100,000 3,740,277
</TABLE>
71
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ------------------------------------------------------------------------
COMPUTER SOFTWARE (CONTINUED)
<S> <C> <C>
Microsoft Corp.(3) 58,000 $ 7,329,750
- ------------------------------------------------------------------------
Misys plc 151,600 3,408,681
---------------
29,389,792
- ------------------------------------------------------------------------
ELECTRONICS - 3.0%
Advanced Semiconductor Engineering,
Inc., GDR(3) 141,339 2,809,113
- ------------------------------------------------------------------------
Intel Corp. 10,000 1,418,125
- ------------------------------------------------------------------------
Keyence Corp. 27,500 4,085,466
- ------------------------------------------------------------------------
SGS-Thomson Microelectronics NV(3) 49,100 3,928,000
- ------------------------------------------------------------------------
Sony Corp. 100,000 8,730,226
- ------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing
Co.(3)(4) 768,000 3,411,794
---------------
24,382,724
- ------------------------------------------------------------------------
TELECOMMUNICATIONS - TECHNOLOGY -
7.5%
Alcatel Alsthom SA 90,000 11,282,698
- ------------------------------------------------------------------------
Ascend Communications, Inc.(3) 120,000 4,725,000
- ------------------------------------------------------------------------
Cisco Systems, Inc.(3) 41,100 2,758,838
- ------------------------------------------------------------------------
Millicom International Cellular
SA(3) 145,000 6,923,750
- ------------------------------------------------------------------------
Millicom, Inc.(3) 25,000 --
- ------------------------------------------------------------------------
NEC Corp.(3) 500,000 6,991,172
- ------------------------------------------------------------------------
Newbridge Networks Corp.(3) 160,000 6,960,000
- ------------------------------------------------------------------------
QUALCOMM, Inc.(3) 221,500 11,268,813
- ------------------------------------------------------------------------
SK Telecom Co. Ltd. 5,546 4,159,981
- ------------------------------------------------------------------------
Telecom Italia Mobile SpA 2,000,000 6,464,884
---------------
61,535,136
- ------------------------------------------------------------------------
UTILITIES - 5.0%
- ------------------------------------------------------------------------
ELECTRIC UTILITIES - 0.6%
Empresa Nacional de Electricidad SA 60,000 5,046,574
- ------------------------------------------------------------------------
GAS UTILITIES - 0.2%
Gazprom, ADR(2)(3) 118,800 2,043,360
- ------------------------------------------------------------------------
TELEPHONE UTILITIES - 4.2%
CPT Telefonica del Peru SA, Cl. B 3,400,031 8,934,207
- ------------------------------------------------------------------------
SBC Communications, Inc. 128,500 7,950,938
- ------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA,
Preference 82,500,000 12,529,632
- ------------------------------------------------------------------------
Videsh Sanchar Nigam Ltd., GDR(3) 250,000 5,187,500
---------------
34,602,277
---------------
Total Common Stocks (Cost
$519,334,232) 654,043,305
- ------------------------------------------------------------------------
PREFERRED STOCKS - 1.5%
- ------------------------------------------------------------------------
Marschollek, Lautenschlaeger und
Partner AG, Non-Vtg.
Preferred Stock (Cost $3,854,224) 50,307 12,125,410
</TABLE>
72
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
UNITS NOTE 1
<S> <C> <C>
- ------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.1%
- ------------------------------------------------------------------------
American Satellite Network, Inc.
Wts., Exp. 6/99 6,250 $ --
- ------------------------------------------------------------------------
PT Citra Marga Nusaphala Persada
Rts., Exp. 8/97 2,331,000 910,734
- ------------------------------------------------------------------------
PT Pan Indonesia Bank Rts., Exp.
7/97 969,500 25,917
- ------------------------------------------------------------------------
PT Pan Indonesia Bank Wts., Exp.
6/00 415,500 4,443
---------------
Total Rights, Warrants and
Certificates (Cost $0) 941,094
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.9%
- ------------------------------------------------------------------------
Repurchase agreement with Zion
First National Bank, 5.95%, dated
6/30/97, to be repurchased at
$73,412,131 on 7/1/97,
collateralized by U.S. Treasury
Bonds, 12.50%, 8/15/14, with a
value of $18,582,433 and U.S.
Treasury Nts., 5.125%-7.25%,
5/31/98-8/15/04, with a value of
$56,365,059 (Cost $73,400,000) $ 73,400,000 73,400,000
- ------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$676,424,366) 99.6% 818,969,257
- ------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.4 3,370,893
---------------- ---------------
NET ASSETS 100.0% $ 822,340,150
---------------- ---------------
---------------- ---------------
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $8,817,382 or 1.07% of the Fund's net
assets, at June 30, 1997.
3. Non-income producing security.
4. Identifies issues considered to be illiquid or restricted - See Note 6 of
Notes to Financial Statements.
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
COUNTRY MARKET VALUE PERCENT
- --------------------------------------------------------------
United States $ 347,296,870 42.4%
- --------------------------------------------------------------
France 67,901,756 8.3
- --------------------------------------------------------------
Great Britain 65,707,315 8.0
- --------------------------------------------------------------
Japan 56,007,151 6.8
- --------------------------------------------------------------
Germany 53,257,405 6.5
- --------------------------------------------------------------
Brazil 31,410,131 3.8
- --------------------------------------------------------------
Switzerland 31,255,616 3.8
- --------------------------------------------------------------
Canada 14,730,477 1.8
- --------------------------------------------------------------
Russia 14,229,041 1.7
- --------------------------------------------------------------
The Netherlands 13,551,803 1.7
- --------------------------------------------------------------
Argentina 12,369,145 1.5
- --------------------------------------------------------------
India 11,123,484 1.4
- --------------------------------------------------------------
Peru 9,839,832 1.2
- --------------------------------------------------------------
Hong Kong 9,336,410 1.1
- --------------------------------------------------------------
Taiwan 7,095,907 0.9
</TABLE>
73
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
Distributions of Investments By Country (Continued)
<TABLE>
<CAPTION>
COUNTRY MARKET VALUE PERCENT
- --------------------------------------------------------------
<S> <C> <C>
Finland $ 6,661,206 0.8%
- --------------------------------------------------------------
Italy 6,464,884 0.8
- --------------------------------------------------------------
Indonesia 6,313,281 0.8
- --------------------------------------------------------------
Sweden 6,147,914 0.8
- --------------------------------------------------------------
South Africa 5,492,582 0.7
- --------------------------------------------------------------
Spain 5,046,574 0.6
- --------------------------------------------------------------
Portugal 4,939,769 0.6
- --------------------------------------------------------------
Mexico 4,883,586 0.6
- --------------------------------------------------------------
Korea, Republic of (South) 4,159,981 0.5
- --------------------------------------------------------------
China 3,937,500 0.5
- --------------------------------------------------------------
Singapore 3,562,500 0.4
- --------------------------------------------------------------
Panama 3,450,000 0.4
- --------------------------------------------------------------
Lebanon 2,997,750 0.4
- --------------------------------------------------------------
Australia 2,367,118 0.3
- --------------------------------------------------------------
Norway 1,898,701 0.2
- --------------------------------------------------------------
Malaysia 1,695,243 0.2
- --------------------------------------------------------------
Thailand 1,335,032 0.2
- --------------------------------------------------------------
Greece 1,294,950 0.2
- --------------------------------------------------------------
Austria 1,208,343 0.1
- --------------------------------------------------------------
Total $ 818,969,257 100.0%
---------------- ------
---------------- ------
</TABLE>
See accompanying Notes to Financial Statements.
74
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C> <C>
MORTGAGE-BACKED OBLIGATIONS - 17.3%
- ---------------------------------------------------------------------
GOVERNMENT AGENCY - 14.4%
- ---------------------------------------------------------------------
FHLMC/FNMA/SPONSORED - 8.0%
Federal Home Loan Mortgage Corp.,
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 151, Cl. F,
9%, 5/15/21 $ 1,500,000 $ 1,617,507
- ---------------------------------------------------------------------
Federal National Mortgage Assn.:
7.50%, 7/1/27(2) 10,000,000 10,021,900
7.50%, 8/1/25 1,002,253 1,008,428
------------
12,647,835
- ---------------------------------------------------------------------
GNMA/GUARANTEED - 6.4%
Government National Mortgage Assn.:
6.875%, 11/20/25 652,549 668,556
7.50%, 2/15/27 4,705,510 4,723,674
8%, 11/15/25 2,855,970 2,926,770
8%, 5/15/26 1,841,007 1,885,523
------------
10,204,523
- ---------------------------------------------------------------------
PRIVATE - 2.9%
- ---------------------------------------------------------------------
COMMERCIAL - 0.9%
Criimi Mae Financial Corp.,
Collateralized Mtg. Obligations,
Trust I, Cl. A-2, 7.56%, 8/30/05 100,000 99,313
- ---------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates, Series 1994-C1, Cl.
2-G, 8.70%, 9/25/25(3) 153,594 153,258
- ---------------------------------------------------------------------
Merrill Lynch Mortgage Investors,
Inc., Mtg. Pass-Through
Certificates, Series 1995-C2, Cl.
D, 8.206%, 6/15/21(4) 419,027 427,310
- ---------------------------------------------------------------------
Morgan Stanley Capital I, Inc.,
Commercial Mtg. Pass-Through
Certificates, Series 1996-C1, Cl.
F, 7.51%, 2/15/28(3)(4) 162,744 118,396
- ---------------------------------------------------------------------
NationsCommercial Corp., NB
Commercial Mtg. Pass-Through
Certificates, Series-DMC, Cl. C,
8.921%, 8/12/11(5) 200,000 207,234
- ---------------------------------------------------------------------
Resolution Trust Corp., Commercial
Mtg. Pass-Through Certificates:
Series 1992-CHF, Cl. D, 8.25%,
12/25/20 122,374 123,876
Series 1993-C1, Cl. D, 9.45%,
5/25/24 91,000 93,282
Series 1994-C2, Cl. E, 8%, 4/25/25 216,348 217,176
- ---------------------------------------------------------------------
Structured Asset Securities Corp.,
Multiclass Pass-Through
Certificates, Series 1995-C4, Cl.
E, 8.837%, 6/25/26(3)(4) 46,290 45,031
------------
1,484,876
- ---------------------------------------------------------------------
MULTI-FAMILY - 1.1%
Mortgage Capital Funding, Inc.:
Commercial Mtg. Pass-Through
Certificates, Series 1997-MC1, Cl.
F, 7.452%, 5/20/07(3) 63,720 58,981
Multifamily Mtg. Pass-Through
Certificates, Series 1996-MC1, Cl.
G, 7.15%, 6/15/06(5) 800,000 734,750
- ---------------------------------------------------------------------
Resolution Trust Corp., Commercial
Mtg. Pass-Through Certificates,
Series 1991-M6, Cl. B4, 7.089%,
6/25/21(4) 26,665 26,297
</TABLE>
75
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
MULTI-FAMILY (CONTINUED)
<S> <C> <C> <C>
Salomon Brothers Mortgage
Securities VII, Series 1996-CL, Cl.
F, 9.186%, 1/20/28(4) $ 1,000,000 $ 831,875
------------
1,651,903
- ---------------------------------------------------------------------
RESIDENTIAL - 0.9%
CS First Boston Mortgage Securities
Corp., Mtg. Pass-Through
Certificates:
Series 1997-C1, Cl. F, 7.50%,
6/20/29 100,000 92,797
Series 1997-C1, Cl. G, 7.50%,
6/20/29 100,000 89,109
Series 1997-C1, Cl. H, 7.50%,
6/20/29 60,000 44,175
- ---------------------------------------------------------------------
First Chicago/Lennar Trust 1,
Commercial Mtg. Pass-Through
Certificates:
Series 1997-CHL1, 8.13%, 2/25/11(4) 600,000 477,750
Series 1997-CHL1, 8.13%, 5/25/08(4) 350,000 337,203
- ---------------------------------------------------------------------
Morgan Stanley Capital I, Inc.,
Commercial Mtg. Pass-Through
Certificates, Series 1997-HF1, Cl.
F, 6.86%, 7/15/29 150,000 134,438
- ---------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VII, Series 1996-B, Cl.
1, 7.136%, 4/25/26 395,434 264,941
------------
1,440,413
------------
Total Mortgage-Backed Obligations
(Cost $26,833,018) 27,429,550
- ---------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 22.2%
- ---------------------------------------------------------------------
AGENCY - 1.0%
- ---------------------------------------------------------------------
Fannie Mae Sr. Unsub. Medium-Term
Nts., 6.50%, 7/10/02(2) AUD 1,720,000 1,294,257
- ---------------------------------------------------------------------
Fannie Mae, Medium-Term Nts.,
7.25%, 6/20/02 NZD 400,000 272,583
------------
1,566,840
- ---------------------------------------------------------------------
TREASURY - 21.2%
- ---------------------------------------------------------------------
U.S. Treasury Bonds:
11.25%, 2/15/15 690,000 1,002,657
11.625%, 11/15/02 300,000 370,594
11.625%, 11/15/04 765,000 990,914
13.125%, 5/15/01(6)(7) 2,800,000 3,446,626
6.50%, 11/15/26 170,000 162,988
6.875%, 8/15/25(8) 1,100,000 1,103,782
8.125%, 8/15/19(8) 163,000 185,922
- ---------------------------------------------------------------------
U.S. Treasury Nts.:
10.75%, 5/15/03 2,783,000 3,363,083
6%, 2/15/26 1,330,000 1,190,351
6.25%, 10/31/01 10,135,000 10,093,831
6.25%, 2/15/03 2,355,000 2,337,340
7.50%, 10/31/99 7,130,000 7,334,994
7.50%, 5/15/02 2,020,000 2,114,057
------------
33,697,139
------------
Total U.S. Government Obligations
(Cost $35,674,790) 35,263,979
</TABLE>
76
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS -
26.7%
- ---------------------------------------------------------------------
ARGENTINA - 2.9%
Argentina (Republic of) Bonds:
5%, 12/20/02 JPY 60,000,000 $ 545,167
Bonos de Consolidacion de Deudas,
Series I, 3.242%, 4/1/01(4)(9) ARP 404,884 370,197
Bonos de Consolidacion de Deudas,
Series I, 5.695%, 4/1/01(4)(9) 1,094,732 1,059,604
- ---------------------------------------------------------------------
Argentina (Republic of) Nts.,
11.75%, 2/12/07(5) ARP 360,000 400,548
- ---------------------------------------------------------------------
Argentina (Republic of) Past Due
Interest Bonds, Series L, 6.75%,
3/31/05(4) 174,600 164,560
- ---------------------------------------------------------------------
Argentina (Republic of) Unsec.
Unsub. Medium-Term Nts., 5.50%,
3/27/01 JPY 120,000,000 1,115,319
- ---------------------------------------------------------------------
Argentina (Republic of) Unsec.
Unsub. Nts., 5.50%, 3/27/01 JPY 50,000,000 464,716
- ---------------------------------------------------------------------
Banco Hipotecario Nacional
(Argentina) Medium-Term Nts.,
10.625%, 8/7/06 400,000 427,000
------------
4,547,111
- ---------------------------------------------------------------------
AUSTRALIA - 2.2%
Australia (Commonwealth of) Bonds:
10%, 10/15/02 AUD 900,000 783,299
Series 302, 9.75%, 3/15/02 AUD 125,000 106,842
- ---------------------------------------------------------------------
Queensland Treasury Corp.
Exchangeable Gtd. Nts.:
10.50%, 5/15/03 AUD 175,000 156,115
8%, 8/14/01 AUD 1,423,000 1,139,850
- ---------------------------------------------------------------------
Treasury Corp. of Victoria Gtd.
Bonds:
12.50%, 10/15/03 AUD 96,000 93,429
Series 999, 10.25%, 9/15/99 AUD 1,424,000 1,174,489
------------
3,454,024
- ---------------------------------------------------------------------
BRAZIL - 0.7%
Banco Estado Minas Gerais, 8.25%,
2/10/00 250,000 245,937
- ---------------------------------------------------------------------
Brazil (Federal Republic of)
Eligible Interest Bonds, 6.875%,
4/15/06(4) 881,100 815,568
- ---------------------------------------------------------------------
Telecomunicacoes Brasileiras SA
Medium-Term Nts., 11.437%,
12/9/99(4) 10,000 10,512
------------
1,072,017
- ---------------------------------------------------------------------
BULGARIA - 0.2%
Bulgaria (Republic of) Interest
Arrears Bonds, 6.688%, 7/28/11(4) 400,000 289,000
- ---------------------------------------------------------------------
CANADA - 3.2%
Canada (Government of) Bonds:
11.75%, 2/1/03 CAD 430,000 398,616
7%, 12/1/06 CAD 280,000 213,416
8.75%, 12/1/05 CAD 640,000 540,352
9.75%, 12/1/01 CAD 540,000 453,628
9.75%, 6/1/01 CAD 2,675,000 2,225,576
Series A-33, 11.50%, 9/1/00 CAD 1,100,000 940,195
- ---------------------------------------------------------------------
NAV Canada Bonds, Series 97-2,
7.56%, 3/1/27 CAD 360,000 273,087
------------
5,044,870
- ---------------------------------------------------------------------
COLOMBIA - 0.3%
Financiera Energetica Nacional SA
Nts., 9.375%, 6/15/06 500,000 536,563
</TABLE>
77
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C> <C>
FINLAND - 2.0%
Finland (Republic of) Bonds:
7.25%, 4/18/06 FIM 6,000,000 $ 1,253,192
9.50%, 3/15/04 FIM 8,000,000 1,870,701
------------
3,123,893
- ---------------------------------------------------------------------
GERMANY - 1.4%
Germany (Republic of) Bonds, Series
94, 6.25%, 1/4/24 DEM 4,200,000 2,344,964
- ---------------------------------------------------------------------
GREAT BRITAIN - 1.7%
United Kingdom Treasury Bonds, 10%,
9/8/03 GBP 1,020,000 1,933,657
- ---------------------------------------------------------------------
United Kingdom Treasury Nts.:
12.50%, 11/21/05 GBP 158,000 333,630
13%, 7/14/00 GBP 200,000 385,494
9.75%, 8/27/02 GBP 30,000 55,437
------------
2,708,218
- ---------------------------------------------------------------------
INDONESIA - 0.3%
Bank Tabugan Negara Negotiable CD,
Zero Coupon, 13.151%, 2/3/98(10) IDR 1,178,876,000 448,398
- ---------------------------------------------------------------------
ITALY - 2.1%
Italy (Republic of) Treasury Bonds,
Buoni del Tesoro Poliennali:
10.50%, 4/1/00 ITL 550,000,000 356,797
10.50%, 7/15/00 ITL 1,160,000,000 762,198
10.50%, 7/15/98 ITL 380,000,000 231,908
9%, 10/1/03 ITL 450,000,000 295,574
9.50%, 2/1/01 ITL 2,215,000,000 1,435,096
9.50%, 5/1/01 ITL 450,000,000 293,168
------------
3,374,741
- ---------------------------------------------------------------------
JORDAN - 0.2%
Hashemite (Kingdom of) Jordan Disc.
Bonds, 6.75%, 12/23/23(4) 500,000 413,750
- ---------------------------------------------------------------------
MEXICO - 2.1%
Banco Nacional de Comercio Exterior
SNC International Finance BV Gtd.
Registered Bonds, 11.25%, 5/30/06 265,000 298,788
- ---------------------------------------------------------------------
Bonos de la Tesoreria de la
Federacion, Zero Coupon, 23.149%,
12/31/97(10) MXP 13,278,140 1,505,421
- ---------------------------------------------------------------------
United Mexican States Bonds:
10.375%, 1/29/03 DEM 725,000 478,262
11.50%, 5/15/26 300,000 342,375
16.50%, 9/1/08(3) GBP 20,000 50,262
- ---------------------------------------------------------------------
United Mexican States:
Collateralized Fixed Rate Par
Bonds, Series B, 6.25%, 12/31/19 600,000 465,000
Petroleos Mexicanos Gtd. Unsec.
Unsub. Nts., 7.875%, 3/2/99 CAD 200,000 148,961
------------
3,289,069
- ---------------------------------------------------------------------
NEW ZEALAND - 2.0%
New Zealand (Government of) Bonds:
10%, 3/15/02 NZD 1,635,000 1,249,150
10%, 7/15/97 NZD 1,154,000 782,693
8%, 11/15/06 NZD 675,000 490,793
- ---------------------------------------------------------------------
New Zealand (Government of) Index
Linked Bonds, 4.628%, 2/15/16 NZD 640,000 422,068
</TABLE>
78
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
NEW ZEALAND (CONTINUED)
<S> <C> <C> <C>
Transpower Finance Ltd. Gtd. Unsec.
Unsub. Bonds:
8%, 2/15/01(3) NZD $ 125,000 $ $87,254
8%, 3/15/02 NZD 125,000 87,456
------------
3,119,414
- ---------------------------------------------------------------------
NORWAY - 0.2%
Norway (Government of) Bonds,
9.50%, 10/31/02 NOK 1,980,000 323,798
- ---------------------------------------------------------------------
PANAMA - 0.2%
Panama (Government of) Past Due
Interest Debs., 6.191%, 7/17/16(4) 405,624 357,077
- ---------------------------------------------------------------------
PHILIPPINES - 0.0%
Philippines (Republic of) Bonds,
8.60%, 6/15/27 100,000 99,000
- ---------------------------------------------------------------------
POLAND - 0.5%
Poland (Republic of) Bonds:
16%, 2/12/99 PLZ 2,150,000 604,520
16%, 6/12/98 PLZ 650,000 187,212
------------
791,732
- ---------------------------------------------------------------------
RUSSIA - 0.9%
City of St. Petersburg Sr. Unsub.
Nts., 9.50%, 6/18/02(5) 400,000 400,250
- ---------------------------------------------------------------------
Ministry of Finance (Russian
Government) Unsec. Unsub. Bonds,
10%, 6/26/07(5) 320,000 318,920
- ---------------------------------------------------------------------
Russia (Government of) Principal
Loans Debs., 5.80%, 12/29/49(2)(4) 1,000,000 667,500
------------
1,386,670
- ---------------------------------------------------------------------
SOUTH AFRICA - 0.6%
South Africa (Republic of) Bonds:
12.50%, 12/21/06 ZAR 1,900,000 378,331
Series 162, 12.50%, 1/15/02 ZAR 1,100,000 228,341
- ---------------------------------------------------------------------
Telkom SA Ltd. Bonds, Series TK05,
12%, 3/31/98 ZAR 1,648,000 354,978
------------
961,650
- ---------------------------------------------------------------------
SPAIN - 2.2%
Spain (Kingdom of) Debs., Bonos y
Obligacion del Estado, 10.10%,
2/28/01 ESP 186,000,000 1,462,629
- ---------------------------------------------------------------------
Spain (Kingdom of) Gtd. Bonds,
Bonos y Obligacion del Estado:
10.30%, 6/15/02 ESP 21,500,000 175,251
10.50%, 10/30/03 ESP 59,550,000 502,371
11.45%, 8/30/98 ESP 12,000,000 87,273
12.25%, 3/25/00 ESP 155,000,000 1,239,409
------------
3,466,933
- ---------------------------------------------------------------------
SUPRANATIONAL - 0.1%
International Bank for
Reconstruction & Development Bonds,
12.50%, 7/25/97(3) NZD 325,000 221,363
- ---------------------------------------------------------------------
VENEZUELA - 0.7%
Venezuela (Republic of)
Collateralized Par Bonds, Series
W-A, 6.75%, 3/31/20 500,000 394,688
- ---------------------------------------------------------------------
Venezuela (Republic of) Disc.
Bonds, Series DL, 6.75%,
12/18/07(4) 500,000 465,000
</TABLE>
79
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
VENEZUELA (CONTINUED)
<S> <C> <C> <C>
Venezuela (Republic of) New Money
Bonds, Series A, 6.875%,
12/18/05(4) $ 250,000 $ 233,984
------------
1,093,672
------------
Total Foreign Government
Obligations (Cost $42,556,703) 42,467,927
- ---------------------------------------------------------------------
LOAN PARTICIPATIONS - 0.6%
- ---------------------------------------------------------------------
Colombia (Republic of) 1989-1990
Integrated Loan Facility Bonds,
6.937%, 7/1/01(3)(4) 174,502 168,831
- ---------------------------------------------------------------------
Jamaica (Government of) 1990
Refinancing Agreement Nts.:
Tranche A, 6.625%, 10/16/00(3)(4) 50,000 48,375
Tranche B, 6.625%, 11/15/04(3)(4) 150,000 136,875
- ---------------------------------------------------------------------
Morocco (Kingdom of) Loan
Participation Agreement:
Tranche A, 6.812%, 1/1/09(4) 571,000 522,287
Tranche B, 6.812%, 1/1/04(4) 41,176 42,064
- ---------------------------------------------------------------------
United Mexican States, Combined
Facility 3, Loan Participation
Agreement, Tranche A, 1.019%,
9/20/97(3)(4) 9,600 8,928
------------
Total Loan Participations (Cost
$887,364) 927,360
- ---------------------------------------------------------------------
CORPORATE BONDS AND NOTES - 28.5%
- ---------------------------------------------------------------------
BASIC INDUSTRY - 3.9%
- ---------------------------------------------------------------------
CHEMICALS - 0.7%
Harris Chemical North America,
Inc., 10.75% Gtd. Sr. Sub. Nts.,
10/15/03 100,000 102,500
- ---------------------------------------------------------------------
ICO, Inc., 10.375% Sr. Nts.,
6/1/07(5) 50,000 51,625
- ---------------------------------------------------------------------
ISP Holdings, Inc., 9% Sr. Nts.,
10/15/03 150,000 156,187
- ---------------------------------------------------------------------
NL Industries, Inc., 0%/13% Sr.
Sec. Disc. Nts., 10/15/05(11) 250,000 237,812
- ---------------------------------------------------------------------
Pioneer Americas Acquisition Corp.,
9.25% Sr. Nts., 6/15/07(5) 200,000 198,000
- ---------------------------------------------------------------------
Polytama International, 11.25% Gtd.
Sec. Nts., 6/15/07 100,000 103,750
- ---------------------------------------------------------------------
Sterling Chemicals, Inc., 11.75%
Sr. Unsec. Sub. Nts., 8/15/06 150,000 162,750
- ---------------------------------------------------------------------
Tri Polyta Finance BV, 11.375% Gtd.
Sec. Nts., 12/1/03 150,000 151,125
------------
1,163,749
- ---------------------------------------------------------------------
CONTAINERS - 0.3%
Consumers International, Inc.,
10.25% Sr. Sec. Nts., 4/1/05(5) 250,000 270,000
- ---------------------------------------------------------------------
IVEX Holdings Corp., 0%/13% Sr.
Disc. Debs., Series B, 3/15/05(11) 150,000 121,500
------------
391,500
- ---------------------------------------------------------------------
METALS/MINING - 0.3%
Carbide/Graphite Group, Inc. (The),
11.50% Sr. Nts., 9/1/03 200,000 219,000
- ---------------------------------------------------------------------
Royal Oak Mines, Inc., 11% Sr. Sub.
Nts., 8/15/06 250,000 240,000
------------
459,000
- ---------------------------------------------------------------------
PAPER - 2.3%
APP International Finance Co. BV,
11.75% Gtd. Sec. Nts., 10/1/05 200,000 220,750
- ---------------------------------------------------------------------
Asia Pulp & Paper International
Finance Co., Zero Coupon Asian
Currency Nts.:
14.463%, 1/23/98(10) IDR 200,000,000 75,702
8.473%, 10/24/97(10) MYR 500,000 192,182
</TABLE>
80
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
PAPER (CONTINUED)
Asia Pulp & Paper International
Finance Co., Zero Coupon Asian
Currency Nts.:
<S> <C> <C> <C>
15.146%, 12/4/97(10) IDR 1,400,000,000 $ 541,158
14.712%, 12/8/97(10) IDR 400,000,000 154,371
- ---------------------------------------------------------------------
Buckeye Cellulose Corp., 9.25% Sr.
Sub. Nts., 9/15/08 110,000 113,850
- ---------------------------------------------------------------------
Fletcher Challenge Ltd.:
10% Cv. Unsec. Sub. Nts., 4/30/05 NZD 60,000 44,136
10.75% Cv. Sub. Nts., 12/15/97 NZD 80,000 54,928
14.50% Cv. Sub. Nts., 9/30/00 NZD 60,000 47,932
- ---------------------------------------------------------------------
Florida Coast Paper Co. LLC, 12.75%
First Mtg. Nts., 6/1/03 130,000 134,875
- ---------------------------------------------------------------------
Four M Corp., 12% Sr. Nts., Series
B, 6/1/06 75,000 77,625
- ---------------------------------------------------------------------
Gaylord Container Corp., 9.75% Sr.
Nts., 6/15/07(5) 20,000 20,050
- ---------------------------------------------------------------------
Indah Kiat International Finance
Co. BV:
11.375% Gtd. Sec. Nts., 6/15/99 205,000 217,300
11.875% Gtd. Sr. Sec. Nts., 6/15/02 100,000 110,625
- ---------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr.
Nts., 3/1/03 100,000 103,500
- ---------------------------------------------------------------------
Repap New Brunswick, Inc., 9.125%
First Priority Sr. Sec. Nts.,
7/15/00(4) 250,000 248,750
- ---------------------------------------------------------------------
Repap Wisconsin, Inc.:
9.25% First Priority Sr. Sec. Nts.,
2/1/02 300,000 303,750
9.875% Second Priority Sr. Nts.,
5/1/06 250,000 253,750
- ---------------------------------------------------------------------
Riverwood International Corp.,
10.25% Sr. Nts., 4/1/06 300,000 299,250
- ---------------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts.,
Series B, 12/15/04 200,000 223,500
- ---------------------------------------------------------------------
Stone Container Corp., 9.875% Sr.
Nts., 2/1/01 220,000 220,000
------------
3,657,984
- ---------------------------------------------------------------------
STEEL - 0.3%
AK Steel Corp., 9.125% Sr. Nts.,
12/15/06 300,000 309,750
- ---------------------------------------------------------------------
Algoma Steel, Inc., 12.375% First
Mtg. Nts., 7/15/05 50,000 55,625
- ---------------------------------------------------------------------
Bar Technologies, Inc., 13.50% Sr.
Sec. Nts., 4/1/01 50,000 51,875
------------
417,250
- ---------------------------------------------------------------------
CONSUMER RELATED - 3.6%
- ---------------------------------------------------------------------
CONSUMER PRODUCTS - 1.3%
Coleman Escrow Corp., Zero Coupon
Sr. First Priority Disc. Nts.,
11.125%, 5/15/01(5)(10) 200,000 127,500
- ---------------------------------------------------------------------
Coleman Holdings, Inc., Zero Coupon
Sr. Sec. Disc. Nts., Series B,
12.712%, 5/27/98(3)(10) 150,000 139,821
- ---------------------------------------------------------------------
Harman International Industries,
Inc., 12% Sr. Sub. Nts., 8/1/02 150,000 160,500
- ---------------------------------------------------------------------
Icon Fitness Corp., 0%/14% Sr.
Disc. Nts., 11/15/06(3)(11) 200,000 109,500
- ---------------------------------------------------------------------
Icon Health & Fitness, Inc., 13%
Sr. Sub. Nts., Series B, 7/15/02 200,000 226,000
- ---------------------------------------------------------------------
IHF Holdings, Inc., 0%/15% Sr. Sub.
Disc. Nts., Series B, 11/15/04(11) 200,000 168,000
- ---------------------------------------------------------------------
Indorayon International Finance Co.
BV, 10% Gtd. Unsec. Unsub. Nts.,
3/29/01(3) 100,000 99,750
- ---------------------------------------------------------------------
International Semi-Tech
Microelectronics, Inc., 0%/11.50%
Sr. Sec. Disc. Nts., 8/15/03(11) 315,000 187,425
</TABLE>
81
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
<S> <C> <C> <C>
Revlon Worldwide Corp., Zero Coupon
Sr. Sec. Disc. Nts., 11.28%,
3/15/01(5)(10) $ 500,000 $ 341,250
- ---------------------------------------------------------------------
Samsonite Corp., 11.125% Sr. Sub.
Nts., 7/15/05(3) 137,000 155,495
- ---------------------------------------------------------------------
TAG Heuer International SA, 12% Sr.
Sub. Nts., 12/15/05 100,000 115,000
- ---------------------------------------------------------------------
Vitro SA, 13% Nts., 12/7/99(4) MXP 438,000 112,909
- ---------------------------------------------------------------------
Williams (J. B.) Holdings, Inc.,
12% Sr. Nts., 3/1/04 100,000 101,500
------------
2,044,650
- ---------------------------------------------------------------------
FOOD/BEVERAGES/TOBACCO - 0.3%
CFP Holdings, Inc., 11.625% Gtd.
Sr. Nts., 1/15/04(5) 100,000 104,000
- ---------------------------------------------------------------------
Dr. Pepper Bottling Holdings, Inc.,
0%/11.625% Sr. Disc. Nts.,
2/15/03(11) 200,000 198,000
- ---------------------------------------------------------------------
Windy Hill Pet Food, Inc., 9.75%
Sr. Sub. Nts., 5/15/07(5) 150,000 150,750
------------
452,750
- ---------------------------------------------------------------------
HEALTHCARE - 0.3%
Genesis Health Ventures, Inc.,
9.25% Sr. Sub. Nts., 10/1/06 135,000 139,725
- ---------------------------------------------------------------------
Integrated Health Services, Inc.:
11% Sr. Sub. Nts., 4/30/06(4)(5) 15,000 16,050
9.50% Sr. Sub. Nts., 9/15/07(5) 100,000 102,750
- ---------------------------------------------------------------------
Magellan Health Services, Inc.,
11.25% Sr. Sub. Nts., Series A,
4/15/04 135,000 151,200
- ---------------------------------------------------------------------
Mariner Health Group, Inc., 9.50%
Sr. Sub. Nts., Series B, 4/1/06 100,000 101,625
------------
511,350
- ---------------------------------------------------------------------
HOTEL/GAMING - 0.9%
Boyd Gaming Corp., 9.25% Sr. Nts.,
10/1/03 100,000 100,500
- ---------------------------------------------------------------------
Grand Casinos, Inc., 10.125% Gtd.
First Mtg. Nts., 12/1/03 80,000 83,800
- ---------------------------------------------------------------------
Grupo Posadas SA de CV, 10.375%
Bonds, 2/13/02(3) 50,000 51,594
- ---------------------------------------------------------------------
HMC Acquisition Properties, Inc.,
9% Sr. Nts., Series B, 12/15/07 150,000 153,750
- ---------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Nts., 6/15/07(5) 225,000 227,812
- ---------------------------------------------------------------------
Mohegan Tribal Gaming Authority,
13.50% Sr. Sec. Nts., Series B,
11/15/02 100,000 131,500
- ---------------------------------------------------------------------
Rio Hotel & Casino, Inc., 9.50%
Gtd. Sr. Sub. Nts., 4/15/07 250,000 258,125
- ---------------------------------------------------------------------
Showboat Marina Casino
Partnership/Showboat Marina Finance
Corp., 13.50% First Mtg. Nts.,
Series B, 3/15/03 300,000 343,500
- ---------------------------------------------------------------------
Trump Atlantic City
Associates/Trump Atlantic City
Funding, Inc., 11.25% First Mtg.
Nts., 5/1/06 115,000 112,700
------------
1,463,281
- ---------------------------------------------------------------------
RESTAURANTS - 0.4%
Ameriking, Inc., 10.75% Sr. Nts.,
12/1/06 125,000 130,937
- ---------------------------------------------------------------------
Carrols Corp., 11.50% Sr. Nts.,
8/15/03 100,000 107,000
- ---------------------------------------------------------------------
Foodmaker, Inc.:
9.25% Sr. Nts., 3/1/99 100,000 103,000
9.75% Sr. Sub. Nts., 6/1/02 300,000 311,625
------------
652,562
</TABLE>
82
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C> <C>
TEXTILE/APPAREL - 0.4%
CMI Industries, Inc., 9.50% Sr.
Sub. Nts., 10/1/03(3) $ 35,000 $ 35,437
- ---------------------------------------------------------------------
GFSI, Inc., 9.625% Sr. Sub. Nts.,
3/1/07(5) 60,000 60,900
- ---------------------------------------------------------------------
PT Polysindo Eka Perkasa, Zero
Coupon Promissory Nts., 9.39%,
7/14/98(10) 100,000 90,507
- ---------------------------------------------------------------------
Tultex Corp., 9.625% Sr. Nts.,
4/15/07(5) 200,000 212,125
- ---------------------------------------------------------------------
William Carter Co., 10.375% Sr.
Sub. Nts., 12/1/06 200,000 210,500
------------
609,469
- ---------------------------------------------------------------------
ENERGY - 3.5%
- ---------------------------------------------------------------------
Belden & Blake Corp., 9.875% Sr.
Sub. Nts., 6/15/07(5) 300,000 299,250
- ---------------------------------------------------------------------
Chesapeake Energy Corp.:
12% Gtd. Sr. Exchangeable Nts.,
3/1/01 200,000 213,000
9.125% Sr. Nts., 4/15/06 200,000 201,000
- ---------------------------------------------------------------------
Clark Oil Refining & Marketing
Corp., 10.50% Sr. Nts., 12/1/01 100,000 103,750
- ---------------------------------------------------------------------
Clark R&M Holdings, Inc., Zero
Coupon Sr. Sec. Nts., Series A,
10.533%, 2/15/00(10) 550,000 419,375
- ---------------------------------------------------------------------
Cross Timbers Oil Co., 9.25% Sr.
Sub. Nts., 4/1/07 200,000 205,000
- ---------------------------------------------------------------------
DI Industries, Inc., 8.875% Sr.
Nts., 7/1/07 100,000 99,000
- ---------------------------------------------------------------------
Energy Corp. of America, 9.50% Sr.
Sub. Nts., 5/15/07(5) 250,000 248,750
- ---------------------------------------------------------------------
Forcenergy, Inc.:
8.50% Sr. Sub. Nts., 2/15/07 80,000 78,600
9.50% Sr. Sub. Nts., 11/1/06 445,000 462,800
- ---------------------------------------------------------------------
J. Ray McDermott SA, 9.375% Sr.
Sub. Bonds, 7/15/06 350,000 361,375
- ---------------------------------------------------------------------
Mariner Energy, Inc., 10.50% Sr.
Sub. Nts., 8/1/06 200,000 209,000
- ---------------------------------------------------------------------
Mesa Operating Co.:
0%/11.625% Gtd. Sr. Sub. Disc.
Nts., 7/1/06(11) 400,000 310,000
10.625% Gtd. Sr. Sub. Nts., 7/1/06 350,000 399,875
- ---------------------------------------------------------------------
National Energy Group, Inc., 10.75%
Sr. Nts., 11/1/06 425,000 439,875
- ---------------------------------------------------------------------
Parker Drilling Corp., 9.75% Gtd.
Sr. Nts., 11/15/06 300,000 317,250
- ---------------------------------------------------------------------
Petroleum Heat & Power Co., Inc.,
9.375% Sub. Debs., 2/1/06 425,000 405,875
- ---------------------------------------------------------------------
Pogo Producing Co., 8.75% Sub.
Nts., 5/15/07(5) 330,000 331,237
- ---------------------------------------------------------------------
Statia Terminals
International/Statia Terminals
(Canada), Inc., 11.75% First Mtg.,
Series B, 11/15/03 175,000 185,500
- ---------------------------------------------------------------------
Vintage Petroleum, Inc., 9% Sr.
Sub. Nts., 12/15/05 100,000 101,500
- ---------------------------------------------------------------------
Wiser Oil Co., 9.50% Sr. Sub. Nts.,
5/15/07(5) 200,000 201,000
------------
5,593,012
- ---------------------------------------------------------------------
FINANCIAL SERVICES - 2.5%
- ---------------------------------------------------------------------
BANKS & THRIFTS - 0.9%
Abbey National Treasury Services
plc, 7.625% Gtd. Nts., 12/30/02 GBP 150,000 251,361
- ---------------------------------------------------------------------
Alliance & Leicester Building
Society, 8.75% Unsec. Sub. Nts.,
12/7/06 GBP 80,000 140,467
- ---------------------------------------------------------------------
Banco de Colombia, 5.20% Cv. Jr.
Unsec. Sub. Nts., 2/1/99(3) 200,000 191,000
- ---------------------------------------------------------------------
Banco Nacional de Mexico SA, 11%
Sub. Exchangeable Capital Debs.,
7/15/03 130,000 139,263
</TABLE>
83
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
BANKS & THRIFTS (CONTINUED)
<S> <C> <C> <C>
First Nationwide Holdings, Inc.,
10.625% Sr. Sub. Nts., 10/1/03 $ 150,000 $ 166,500
- ---------------------------------------------------------------------
Ocwen Financial Corp., 11.875%
Nts., 10/1/03 150,000 164,250
- ---------------------------------------------------------------------
Ongko International Finance Co. BV,
10.50% Gtd. Nts., 3/29/04(5) 200,000 206,433
- ---------------------------------------------------------------------
Shoshone Partners Trust, 8% Sr.
Nts., 5/31/02(3)(4) 177,000 177,245
------------
1,436,519
- ---------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 1.4%
Aames Financial Corp., 9.125% Sr.
Nts., 11/1/03 250,000 256,250
- ---------------------------------------------------------------------
Americredit Corp., 9.25% Sr. Nts.,
2/1/04 100,000 98,500
- ---------------------------------------------------------------------
Amresco, Inc., 10% Sr. Sub. Nts.,
Series 97-A, 3/15/04 100,000 102,000
- ---------------------------------------------------------------------
Banco del Atlantico SA, 7.875%
Eurobonds, 11/5/98 370,000 370,237
- ---------------------------------------------------------------------
Cityscape Financial Corp., 12.75%
Sr. Nts., 6/1/04(5) 350,000 346,500
- ---------------------------------------------------------------------
General Electric Capital Corp.,
11.625% Nts., 10/29/97 SKK 16,500,000 468,334
- ---------------------------------------------------------------------
Olympic Financial Ltd., Units (each
unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07
and one warrant to purchase 6.84
shares of common stock)(12) 250,000 258,125
- ---------------------------------------------------------------------
Saul (B.F.) Real Estate Investment
Trust, 11.625% Sr. Sec. Nts.,
Series B, 4/1/02 200,000 213,000
- ---------------------------------------------------------------------
Wilshire Financial Services Group,
Inc., 13% Nts., 1/1/04 100,000 101,500
------------
2,214,446
- ---------------------------------------------------------------------
INSURANCE - 0.2%
Terra Nova Insurance (UK) Holdings
plc, 10.75% Sr. Nts., 7/1/05 100,000 111,377
- ---------------------------------------------------------------------
Veritas Holdings, Inc., 9.625% Sr.
Nts., 12/15/03(5) 200,000 207,000
------------
318,377
- ---------------------------------------------------------------------
HOUSING RELATED - 0.5%
- ---------------------------------------------------------------------
BUILDING MATERIALS - 0.3%
American Builders & Contractors
Supply, Inc., 10.625% Sr. Sub.
Nts., 5/15/07(5) 200,000 207,000
- ---------------------------------------------------------------------
Building Materials Corp. of
America, 8.625% Sr. Nts., 12/15/06 50,000 51,000
- ---------------------------------------------------------------------
Falcon Building Products, Inc.,
9.50% Sr. Sub. Nts., 6/15/07(5) 175,000 175,000
- ---------------------------------------------------------------------
Nortek, Inc., 9.25% Sr. Nts.,
3/15/07 50,000 51,250
------------
484,250
- ---------------------------------------------------------------------
HOMEBUILDERS/REAL ESTATE - 0.2%
Continental Homes Holding Corp.,
10% Gtd. Unsec. Bonds, 4/15/06 50,000 51,750
- ---------------------------------------------------------------------
Greystone Homes, Inc., 10.75% Sr.
Nts., 3/1/04 50,000 54,250
- ---------------------------------------------------------------------
Hovnanian K. Enterprises, Inc.,
11.25% Gtd. Sub. Nts., 4/15/02 75,000 78,375
- ---------------------------------------------------------------------
Standard Pacific Corp., 8.50% Sr.
Nts., 6/15/07 130,000 130,325
- ---------------------------------------------------------------------
U.S. Home Corp., 9.75% Sr. Nts.,
6/15/03 25,000 26,125
------------
340,825
- ---------------------------------------------------------------------
MANUFACTURING - 2.2%
- ---------------------------------------------------------------------
AEROSPACE - 1.0%
America West Airlines, Inc., 10.75%
Sr. Nts., 9/1/05 450,000 467,438
</TABLE>
84
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
AEROSPACE (CONTINUED)
<S> <C> <C> <C>
Atlas Air, Inc., 12.25%
Pass-Through Certificates,
12/1/02(3) $ 350,000 $ 388,500
- ---------------------------------------------------------------------
Continental Airlines, Inc., 9.50%
Sr. Unsec. Nts., 12/15/01 50,000 52,500
- ---------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd.
Nts., 12/15/98 300,000 306,750
- ---------------------------------------------------------------------
Northwest Airlines Corp.:
8.70% Nts., 3/15/07 125,000 128,771
8.375% Gtd. Nts., 3/15/04 50,000 50,765
- ---------------------------------------------------------------------
Pegasus Aircraft Lease
Securitization Trust, 11.76% Sr.
Nts., Cl. A, 6/15/04(3) 100,000 100,870
- ---------------------------------------------------------------------
Rohr, Inc., 11.625% Sr. Nts.,
5/15/03 100,000 111,500
------------
1,607,094
- ---------------------------------------------------------------------
AUTOMOTIVE - 0.6%
Collins & Aikman Products Co.,
11.50% Gtd. Sr. Sub. Nts., 4/15/06 300,000 341,250
- ---------------------------------------------------------------------
Hayes Wheels International, Inc.,
11% Sr. Sub. Nts., 7/15/06 250,000 275,625
- ---------------------------------------------------------------------
Hayes Wheels International, Inc.,
9.125% Sr. Sub. Nts., 7/15/07(3) 100,000 100,125
- ---------------------------------------------------------------------
Lear Corp., 9.50% Sub. Nts.,
7/15/06 200,000 213,000
- ---------------------------------------------------------------------
Oxford Automotive, Inc., 10.125%
Sr. Sub. Nts., 6/15/07(5) 50,000 50,063
- ---------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts.,
Series B, 3/1/04 45,000 45,225
------------
1,025,288
- ---------------------------------------------------------------------
CAPITAL GOODS - 0.6%
Clark-Schwebel, Inc., 10.50% Sr.
Nts., 4/15/06 100,000 107,000
- ---------------------------------------------------------------------
Communications & Power Industries,
Inc., 12% Sr. Sub. Nts., Series B,
8/1/05 250,000 272,500
- ---------------------------------------------------------------------
Consorcio Ecuatoriano Nts., 14%,
5/1/02(3) 150,000 159,375
- ---------------------------------------------------------------------
International Wire Group, Inc.,
11.75% Sr. Sub. Nts., 6/1/05(3) 100,000 108,500
- ---------------------------------------------------------------------
Mettler Toledo, Inc., 9.75% Gtd.
Sr. Sub. Nts., 10/1/06 105,000 110,775
- ---------------------------------------------------------------------
Roller Bearing Co. (America),
9.625% Sr. Sub. Nts., 6/15/07(5) 40,000 40,600
- ---------------------------------------------------------------------
Synthetic Industries, Inc., 9.25%
Sr. Sub. Nts., 2/15/07(5) 45,000 46,125
- ---------------------------------------------------------------------
Titan Wheel International, Inc.,
8.75% Sr. Sub. Nts., 4/1/07 100,000 102,500
- ---------------------------------------------------------------------
Unifrax Investment Corp., 10.50%
Sr. Nts., 11/1/03(3) 50,000 51,750
------------
999,125
- ---------------------------------------------------------------------
MEDIA - 3.2%
- ---------------------------------------------------------------------
BROADCASTING - 1.0%
Argyle Television, Inc., 9.75% Sr.
Sub. Nts., 11/1/05 100,000 105,000
- ---------------------------------------------------------------------
Capstar Broadcasting Partners,
Inc., 9.25% Sr. Sub. Nts.,
7/1/07(5) 200,000 194,500
- ---------------------------------------------------------------------
Chancellor Radio Broadcasting Co.,
8.75% Sr. Sub. Nts., 6/15/07(5) 100,000 99,500
- ---------------------------------------------------------------------
Jacor Communications Co., 8.75%
Gtd. Sr. Sub. Nts., 6/15/07(5) 100,000 99,500
- ---------------------------------------------------------------------
Paxson Communications Corp.,
11.625% Sr. Sub. Nts., 10/1/02 95,000 103,313
- ---------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts.,
5/15/04(5)(13) 100,000 89,500
- ---------------------------------------------------------------------
SFX Broadcasting, Inc., 10.75% Sr.
Sub. Nts., Series B, 5/15/06 150,000 162,000
</TABLE>
85
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
BROADCASTING (CONTINUED)
<S> <C> <C> <C>
Sinclair Broadcast Group, Inc.:
10% Sr. Sub. Nts., 9/30/05 $ 100,000 $ 103,500
9% Sr. Sub. Nts., 7/15/07(5) 100,000 97,125
- ---------------------------------------------------------------------
Spanish Broadcasting System, Inc.,
11% Sr. Nts., 3/15/04(5) 100,000 105,500
- ---------------------------------------------------------------------
TV Azteca SA de CV:
10.125% Sr. Nts., 2/15/04(5) 100,000 102,750
10.50% Sr. Nts., 2/15/07(5) 150,000 154,125
- ---------------------------------------------------------------------
Young Broadcasting, Inc.:
8.75% Sr. Sub. Debs., 6/15/07(5) 100,000 95,750
9% Sr. Sub. Nts., Series B, 1/15/06 100,000 98,500
------------
1,610,563
- ---------------------------------------------------------------------
CABLE TELEVISION - 1.3%
American Telecasting, Inc.,
0%/14.50% Sr. Disc. Nts.,
6/15/04(11) 72,000 22,680
- ---------------------------------------------------------------------
Cablevision Systems Corp.:
10.75% Sr. Sub. Debs., 4/1/04 100,000 103,071
9.875% Sr. Sub. Nts., 5/15/06 250,000 268,125
- ---------------------------------------------------------------------
EchoStar Communications Corp.,
0%/12.875% Sr. Disc. Nts.,
6/1/04(11) 40,000 33,800
- ---------------------------------------------------------------------
EchoStar DBS Corp., 12.50% Gtd.
Nts., 7/1/02(5) 300,000 298,500
- ---------------------------------------------------------------------
EchoStar I, 8.25% Bonds, 2/26/01(3) 71,649 70,933
- ---------------------------------------------------------------------
EchoStar II, 8.25% Bonds,
11/9/01(3) 65,169 64,518
- ---------------------------------------------------------------------
EchoStar Satellite Broadcasting
Corp., 0%/13.125% Sr. Sec. Disc.
Nts., 3/15/04(11) 150,000 107,625
- ---------------------------------------------------------------------
Fundy Cable Ltd./Ltee, 11% Sr. Sec.
Second Priority Nts., 11/15/05(3) 100,000 108,500
- ---------------------------------------------------------------------
Helicon Group LP/Helicon Capital
Corp., 11% Sr. Sec. Nts., Series B,
11/1/03 175,000 182,875
- ---------------------------------------------------------------------
Marcus Cable Operating Co.
LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts.,
Series II, 8/1/04(11) 200,000 174,500
- ---------------------------------------------------------------------
Optel, Inc., Units (each unit
consists of $1,000 principal amount
of 13% sr. nts., 2/15/05 and one
warrant to purchase one share of
non-vtg. common stock)(5)(12) 85,000 81,600
- ---------------------------------------------------------------------
Rogers Cablesystems Ltd., 10%
Second Priority Sr. Sec. Debs.,
12/1/07 200,000 215,000
- ---------------------------------------------------------------------
TCI Satellite Entertainment, Inc.:
0%/10.875% Sr. Sub. Nts.,
2/15/07(5)(11) 200,000 119,000
10.875% Sr. Sub. Nts., 2/15/07(5) 130,000 131,300
------------
1,982,027
- ---------------------------------------------------------------------
DIVERSIFIED MEDIA - 0.6%
Ackerley Communications, Inc.,
10.75% Sr. Sec. Nts., Series A,
10/1/03 200,000 215,000
- ---------------------------------------------------------------------
Katz Media Corp., 10.50% Sr. Sub.
Nts., 1/15/07 100,000 98,500
- ---------------------------------------------------------------------
Lamar Advertising Co., 9.625% Sr.
Sub. Nts., 12/1/06 50,000 51,500
- ---------------------------------------------------------------------
Outdoor Systems, Inc., 8.875% Sr.
Sub. Nts., 6/15/07(5) 150,000 146,438
- ---------------------------------------------------------------------
Time Warner Entertainment LP/Time
Warner, Inc., 8.375% Sr. Debs.,
3/15/23 300,000 308,307
</TABLE>
86
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
DIVERSIFIED MEDIA (CONTINUED)
<S> <C> <C> <C>
Universal Outdoor, Inc.:
9.75% Sr. Sub. Nts., 10/15/06 $ 80,000 $ 83,200
9.75% Sr. Sub. Nts., Series B,
10/15/06 70,000 72,800
------------
975,745
- ---------------------------------------------------------------------
ENTERTAINMENT/FILM - 0.2%
Azteca Holdings SA, 11% Sr. Nts.,
6/15/02(5) 155,000 157,325
- ---------------------------------------------------------------------
Imax Corp., 10% Sr. Nts., 3/1/01 200,000 210,500
------------
367,825
- ---------------------------------------------------------------------
PUBLISHING/PRINTING - 0.1%
Sun Media Corp., 9.50% Sr. Sub.
Nts., 2/15/07(5) 150,000 152,250
- ---------------------------------------------------------------------
OTHER - 0.9%
- ---------------------------------------------------------------------
CONGLOMERATES - 0.2%
Cia Latino Americana de
Infraestructura & Servicios SA -
CLISA, 11.625% Gtd. Sr. Nts.,
6/1/04(5) 30,000 31,800
- ---------------------------------------------------------------------
Empresas ICA Sociedad Controladora
SA de CV, 11.875% Nts., 5/30/01 60,000 65,475
- ---------------------------------------------------------------------
MacAndrews & Forbes Holdings, Inc.,
13% Sub. Debs., 3/1/99(3) 131,000 131,983
- ---------------------------------------------------------------------
Mechala Group Jamaica Ltd., 12.75%
Bonds, 12/30/99 85,000 89,118
------------
318,376
- ---------------------------------------------------------------------
ENVIRONMENTAL - 0.3%
Allied Waste Industries, Inc.,
0%/11.30% Sr. Disc. Nts.,
6/1/07(5)(11) 300,000 189,000
- ---------------------------------------------------------------------
Allied Waste North America, Inc.,
10.25% Sr. Sub. Nts., 12/1/06(5) 250,000 268,750
------------
457,750
- ---------------------------------------------------------------------
SERVICES - 0.4%
Borg-Warner Security Corp.:
9.125% Sr. Sub. Nts., 5/1/03 100,000 102,000
9.625% Sr. Sub. Nts., 3/15/07(5) 100,000 101,250
- ---------------------------------------------------------------------
Coinstar, Inc., 0%/13% Sr. Disc.
Nts., 10/1/06(3)(11) 100,000 69,000
- ---------------------------------------------------------------------
Kindercare Learning Centers, Inc.,
9.50% Sr. Sub. Nts., 2/15/09 50,000 49,000
- ---------------------------------------------------------------------
Neodata Services, Inc., 12% Sr.
Nts., Series B, 5/1/03 100,000 108,000
- ---------------------------------------------------------------------
Protection One Alarm Monitoring,
Inc., 6.75% Cv. Gtd. Sr. Sub. Nts.,
9/15/03 125,000 127,344
------------
556,594
- ---------------------------------------------------------------------
RETAIL - 0.8%
- ---------------------------------------------------------------------
SPECIALTY RETAILING - 0.3%
Central Termica Guemes, 12% Bonds,
11/26/01(3) 100,000 104,750
- ---------------------------------------------------------------------
Eye Care Centers of America, Inc.,
12% Sr. Nts., 10/1/03 70,000 77,350
- ---------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625%
Sr. Nts., 5/1/03(3) 100,000 106,500
- ---------------------------------------------------------------------
Profitt's, Inc., 8.125% Sr. Nts.,
5/15/04(5) 150,000 151,125
- ---------------------------------------------------------------------
Specialty Retailers, Inc., 8.50%
Gtd. Sr. Nts., 7/15/05(5) 100,000 101,250
------------
540,975
- ---------------------------------------------------------------------
SUPERMARKETS - 0.5%
Grand Union Co., 12% Sr. Nts.,
9/1/04 75,000 55,875
</TABLE>
87
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
SUPERMARKETS (CONTINUED)
<S> <C> <C> <C>
Jitney-Jungle Stores of America,
Inc., 12% Gtd. Sr. Nts., 3/1/06 $ 200,000 $ 223,750
- ---------------------------------------------------------------------
Ralph's Grocery Co.
(New), 11% Sr. Sub. Nts.,
6/15/05(5) 50,000 54,500
10.45% Sr. Nts., 6/15/04 125,000 134,844
10.45% Sr. Nts., 6/15/04 200,000 215,750
- ---------------------------------------------------------------------
Randall's Food Markets, 9.375% Sr.
Sub. Nts., 7/1/07(5) 50,000 49,750
------------
734,469
- ---------------------------------------------------------------------
TECHNOLOGY - 5.7%
- ---------------------------------------------------------------------
INFORMATION TECHNOLOGY - 3.0%
Amphenol Corp., 9.875% Sr. Sub.
Nts., 5/15/07 75,000 77,813
- ---------------------------------------------------------------------
Call-Net Enterprises, Inc.,
0%/13.25% Sr. Disc. Nts.,
12/1/04(11) 200,000 173,750
- ---------------------------------------------------------------------
Cellular Communications
International, Inc., Zero Coupon
Sr. Disc. Nts., 11.409%,
8/15/00(10) 600,000 460,500
- ---------------------------------------------------------------------
Cellular, Inc., 0%/11.75% Sr. Sub.
Disc. Nts., 9/1/03(11) 50,000 48,750
- ---------------------------------------------------------------------
Comcast Cellular Communications,
Inc., 9.50% Sr. Nts., 5/1/07(5) 150,000 151,125
- ---------------------------------------------------------------------
Comunicacion Celular SA, 0%/13.125%
Sr. Deferred Coupon Bonds,
11/15/03(11) 350,000 251,125
- ---------------------------------------------------------------------
Dobson Communications Corp., 11.75%
Sr. Nts., 4/15/07 225,000 219,375
- ---------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts.,
3/1/07(5) 350,000 354,375
- ---------------------------------------------------------------------
Geotek Communications, Inc.:
0%/15% Sr. Sec. Disc. Nts.,
7/15/05(11) 250,000 156,250
12% Cv. Sr. Sub. Nts., 2/15/01(3) 250,000 250,000
- ---------------------------------------------------------------------
Globalstar LP/Globalstar Capital
Corp., 11.25% Sr. Nts., 6/15/04(5) 100,000 94,250
- ---------------------------------------------------------------------
McCaw International Ltd., Units
(each unit consists of $1,000
principal amount of 0%/13% sr.
disc. nts., 4/15/07 and one warrant
to purchase 0.10616 shares of
common stock)(5)(11)(12) 50,000 24,250
- ---------------------------------------------------------------------
Millicom International Cellular SA,
0%/13.50% Sr. Disc. Nts.,
6/1/06(11) 300,000 217,500
- ---------------------------------------------------------------------
Occidente y Caribe Celular SA,
0%/14% Sr. Disc. Nts., Series B,
3/15/04(11) 200,000 151,000
- ---------------------------------------------------------------------
Omnipoint Corp., 11.625% Sr. Nts.,
8/15/06 250,000 241,250
- ---------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital
Corp., 14% Sr. Nts., 8/15/04 200,000 203,000
- ---------------------------------------------------------------------
PriCellular Wireless Corp.:
0%/12.25% Sr. Sub. Disc. Nts.,
10/1/03(11) 150,000 141,750
0%/14% Sr. Sub. Disc. Nts.,
11/15/01(11) 300,000 316,500
10.75% Sr. Nts., 11/1/04 50,000 52,750
- ---------------------------------------------------------------------
Real Time Data, Inc., Units (each
unit consists of $1,000 principal
amount of 0%/13.50% sub. disc.
nts., 8/15/06 and one warrant to
purchase six ordinary
shares)(3)(11)(12) 300,000 171,000
- ---------------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum
Finance Corp., 0%/12.50% Sr. Disc.
Nts., 8/15/06(11) 220,000 160,050
- ---------------------------------------------------------------------
Unisys Corp.:
11.75% Sr. Nts., 10/15/04 150,000 162,750
15% Credit Sensitive Nts.,
7/1/97(3)(4) 50,000 50,250
</TABLE>
88
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
INFORMATION TECHNOLOGY (CONTINUED)
<S> <C> <C> <C>
USA Mobile Communications, Inc. II:
14% Sr. Nts., 11/1/04 $ 300,000 $ 333,000
9.50% Sr. Nts., 2/1/04 100,000 94,000
- ---------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub.
Nts., 6/15/07(5) 175,000 180,469
------------
4,736,832
- ---------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
2.7%
American Communications Services,
Inc., 0%/12.75% Sr. Disc. Nts.,
4/1/06(11) 185,000 101,750
- ---------------------------------------------------------------------
Bell Cablemedia plc:
0%/11.875% Sr. Disc. Nts.,
9/15/05(11) 100,000 84,000
0%/11.95% Sr. Disc. Nts.,
7/15/04(11) 300,000 273,000
- ---------------------------------------------------------------------
Brooks Fiber Properties, Inc.:
0%/10.875% Sr. Disc. Nts.,
3/1/06(11) 300,000 205,875
0%/11.875% Sr. Disc. Nts.,
11/1/06(11) 250,000 163,750
10% Sr. Nts., 6/1/07(5) 250,000 254,375
- ---------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec.
Nts., 3/15/04(3)(11) 150,000 137,250
- ---------------------------------------------------------------------
Colt Telecom Group plc, Units (each
unit consists of $1,000 principal
amount of 0%/12% sr. disc. nts.,
12/15/06 and one warrant to
purchase 7.8 ordinary
shares)(11)(12) 200,000 131,000
- ---------------------------------------------------------------------
Comcast UK Cable Partner Ltd.,
0%/11.20% Sr. Disc. Debs.,
11/15/07(11) 250,000 190,625
- ---------------------------------------------------------------------
Diamond Cable Communications plc,
0%/11.75% Sr. Disc. Nts.,
12/15/05(11) 475,000 323,000
- ---------------------------------------------------------------------
GST Telecommunications, Inc.,
0%/13.875% Cv. Sr. Sub. Disc. Nts.,
12/15/05(5)(11) 25,000 14,906
- ---------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Bonds,
12/15/05(11) 90,000 56,025
- ---------------------------------------------------------------------
Hyperion Telecommunications, Inc.,
0%/13% Sr. Disc. Nts., Series B,
4/15/03(11) 60,000 30,450
- ---------------------------------------------------------------------
ICG Holdings, Inc.:
0%/12.50% Gtd. Sr. Disc. Nts.,
5/1/06(11) 145,000 95,700
0%/13.50% Sr. Disc. Nts.,
9/15/05(11) 310,000 223,200
- ---------------------------------------------------------------------
International CableTel, Inc.,
0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(11) 300,000 209,250
- ---------------------------------------------------------------------
McLeod, Inc., 0%/10.50% Sr. Disc.
Nts., 3/1/07(5)(11) 285,000 183,113
- ---------------------------------------------------------------------
MFS Communications Co., Inc.:
0%/8.875% Sr. Disc. Nts.,
1/15/06(11) 150,000 119,250
0%/9.375% Sr. Disc. Nts.,
1/15/04(11) 375,000 350,625
- ---------------------------------------------------------------------
NTL, Inc., 10% Sr. Nts., 2/15/07(5) 100,000 102,250
- ---------------------------------------------------------------------
Petersburg Long Distance, Inc.,
Units (each unit consists of $1,000
principal amount of 0%/14% sr.
disc. nts., 6/1/04 and one warrant
to purchase 34 ordinary
shares)(3)(11)(12) 300,000 253,500
- ---------------------------------------------------------------------
PTC International Finance BV,
0%/10.75% Gtd. Sr. Sub. Unsec.
Bonds, 7/1/07(3)(11) 110,000 67,100
- ---------------------------------------------------------------------
Teleport Communications Group,
Inc.:
0%/11.125% Sr. Disc. Nts.,
7/1/07(11) 475,000 343,781
9.875% Sr. Nts., 7/1/06 100,000 107,000
</TABLE>
89
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY
(CONTINUED)
<S> <C> <C> <C>
Telesystem International Wireless,
Inc., 0%/13.25% Sr. Disc. Nts.,
6/30/07(5)(11) $ 25,000 $ 13,375
- ---------------------------------------------------------------------
Telewest Communications plc, 0%/11%
Sr. Disc. Debs., 10/1/07(11) 200,000 145,000
- ---------------------------------------------------------------------
UNIFI Communications, Inc., Units
(each unit consists of $1,000
principal amount of 14% sr. nts.,
3/1/04 and one warrant to purchase
27.52 ordinary shares)(5)(12) 25,000 24,875
------------
4,204,025
- ---------------------------------------------------------------------
TRANSPORTATION - 0.5%
- ---------------------------------------------------------------------
AIR TRANSPORTATION - 0.0%
American International Group, Inc.,
11.70% Unsec. Unsub. Bonds, 12/4/01 ITL 90,000,000 63,275
- ---------------------------------------------------------------------
RAILROADS - 0.1%
Transtar Holdings LP/Transtar
Capital Corp., 0%/13.375% Sr. Disc.
Nts., Series B, 12/15/03(11) 200,000 169,000
- ---------------------------------------------------------------------
TRUCKING - 0.4%
Coach USA, Inc., 9.375% Gtd. Sr.
Sub. Nts., 7/1/07(5) 200,000 199,000
- ---------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50%
Nts., Series 1993-A, 12/1/11(5) 250,000 207,083
- ---------------------------------------------------------------------
Western Star Truck Holdings Ltd.,
8.75% Sr. Nts., 5/1/07(5) 250,000 257,500
------------
663,583
- ---------------------------------------------------------------------
UTILITIES - 1.2%
- ---------------------------------------------------------------------
ELECTRIC UTILITIES - 1.1%
CalEnergy, Inc., 9.50% Sr. Nts.,
9/15/06 200,000 214,500
- ---------------------------------------------------------------------
California Energy, Inc., 10.25% Sr.
Disc. Nts., 1/15/04 150,000 162,375
- ---------------------------------------------------------------------
Calpine Corp., 10.50% Sr. Nts.,
5/15/06 100,000 109,000
- ---------------------------------------------------------------------
El Paso Electric Co., 9.40% First
Mtg. Bonds, Series E, 5/1/11 250,000 273,125
- ---------------------------------------------------------------------
First PV Funding Corp.:
10.30% Lease Obligation Bonds,
Series 1986A, 1/15/14 144,000 153,540
10.30% Lease Obligation Bonds,
Series 1986A, 1/15/14 5,000 5,000
- ---------------------------------------------------------------------
New Zealand Electric Corp., 10%
Debs., 10/15/01 NZD 535,000 398,430
- ---------------------------------------------------------------------
Panda Global Energy Co., 12.50% Sr.
Nts., 4/15/04(5) 400,000 392,000
------------
1,707,970
- ---------------------------------------------------------------------
GAS UTILITIES - 0.1%
Beaver Valley II Funding Corp., 9%
Second Lease Obligation Bonds,
6/1/17 199,000 209,945
------------
Total Corporate Bonds and Notes
(Cost $44,186,949) 45,293,685
SHARES
- ---------------------------------------------------------------------
COMMON STOCKS - 0.3%
- ---------------------------------------------------------------------
Celcaribe SA(3)(14) 24,390 73,170
- ---------------------------------------------------------------------
Vail Resorts, Inc.(14) 15,500 392,344
------------
Total Common Stocks (Cost $193,712) 465,514
</TABLE>
90
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------
PREFERRED STOCKS - 2.0%
- ---------------------------------------------------------------------
American Radio Systems Corp.,
11.375% Cum. Exchangeable
Preferred(5)(9) 731 $ 77,669
- ---------------------------------------------------------------------
California Federal Bank, 10.625%
Non-Cum., Series B 2,500 275,625
- ---------------------------------------------------------------------
California Federal Bank, 11.50%
Non-Cum., Non-Vtg. 1,500 166,500
- ---------------------------------------------------------------------
CGA Group Ltd., Preferred(3)(14) 16,000 400,000
- ---------------------------------------------------------------------
CRIIMI MAE, Inc., 10.875% Cum. Cv.
Preferred Stock, Series B 7,000 252,875
- ---------------------------------------------------------------------
Earthwatch, Inc., 12% Cv. Sr.
Preferred Stock, Series C(3)(14) 10,000 104,000
- ---------------------------------------------------------------------
El Paso Electric Co., 11.40% Series
A Preferred Stock(9) 1,719 193,817
- ---------------------------------------------------------------------
Fidelity Federal Bank, 12% Non-Cum.
Exchangeable Perpetual Preferred
Stock, Series A(3) 300 8,400
- ---------------------------------------------------------------------
Fresenius Medical Care Trust, 9%
Preferred Securities 450,000 468,000
- ---------------------------------------------------------------------
Glendale Federal Bank, F.S.B.,
8.75% Non-Cum. Cv., Series E 1,000 65,000
- ---------------------------------------------------------------------
Kelley Oil & Gas Corp., $2.625 Cv. 1,800 43,650
- ---------------------------------------------------------------------
NEXTLINK Communications, Inc., 14%
Sr. Exchangeable Preferred(9)(14) 4,209 222,025
- ---------------------------------------------------------------------
Panamsat Corp., 12.75% Sr.
Preferred Exchangeable(9) 372 456,165
- ---------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv.,
Series B 6,000 142,500
- ---------------------------------------------------------------------
Time Warner, Inc., 10.25%
Exchangeable Preferred, Series
M(9)(14) 1 1,139
- ---------------------------------------------------------------------
Walden Residential Properties, Inc.
Preferred Stock 1,000 26,000
- ---------------------------------------------------------------------
Walden Residential Properties,
Inc., 9.16% Cv. Preferred Stock,
Series B 10,000 290,000
------------
Total Preferred Stocks (Cost
$2,958,670) 3,193,365
- ---------------------------------------------------------------------
OTHER SECURITIES - 0.4%
- ---------------------------------------------------------------------
BankUnited Capital Trust, 10.25%
Redeemable Trust Preferred
Securities 100,000 99,250
- ---------------------------------------------------------------------
SD Warren Co., 14% Cum.
Exchangeable, Series B(14) 5,000 216,250
- ---------------------------------------------------------------------
SDW Holdings Corp., 15% Cum. Sr.
Exchangeable Preferred(5)(14) 3,750 135,000
- ---------------------------------------------------------------------
WorldCom, Inc., 8% Depositary Cv.
Shares each Representing 1/100
Share of Dividend Enhanced
Convertible Stock 2,000 225,500
------------
Total Other Securities (Cost
$556,617) 676,000
UNITS
- ---------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.1%
- ---------------------------------------------------------------------
American Telecasting, Inc. Wts.,
Exp. 6/99(3) 1,500 757
- ---------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49(3) 16,000 8,000
- ---------------------------------------------------------------------
Cellular Communications
International, Inc. Wts., Exp.
8/03(3) 300 4,500
- ---------------------------------------------------------------------
Coinstar, Inc. Wts., Exp. 11/03(3) 100 7,000
- ---------------------------------------------------------------------
Comunicacion Celular SA Wts., Exp.
11/03(3) 200 11,000
- ---------------------------------------------------------------------
Eye Care Centers of America, Inc.
Wts., Exp. 10/03(3) 70 350
- ---------------------------------------------------------------------
Geotek Communications, Inc. Wts.,
Exp. 7/05(3) 7,500 15,000
- ---------------------------------------------------------------------
Hyperion Telecommunications, Inc.
Wts., Exp. 4/01(3) 60 1,800
- ---------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp.
9/05(3) 825 6,600
- ---------------------------------------------------------------------
IHF Capital, Inc., Series I Wts.,
Exp. 11/99(3) 200 11,000
</TABLE>
91
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
UNITS NOTE 1
- ---------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES
(CONTINUED)
<S> <C> <C> <C>
- ---------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp.
8/02 200 $ --
- ---------------------------------------------------------------------
NEXTLINK Communications, Inc. Wts.,
Exp. 2/09(3) 4,100 41
- ---------------------------------------------------------------------
Occidente y Caribe Celular SA Wts.,
Exp. 3/04(3) 800 8,000
- ---------------------------------------------------------------------
SDW Holdings Corp., Cl. B Wts.,
Exp. 12/06(3) 375 4,875
- ---------------------------------------------------------------------
United International Holdings, Inc.
Wts., Exp. 11/99(3) 200 1,000
------------
Total Rights, Warrants and
Certificates (Cost $10,175) 79,923
PRINCIPAL
AMOUNT(1)
- ---------------------------------------------------------------------
STRUCTURED INSTRUMENTS - 6.5%
- ---------------------------------------------------------------------
Bayerische Landesbank (New York
Branch) CD, 13.75%, 8/18/97
(indexed to the cross currency
rates of Greek Drachma & Swiss
Franc) $ 150,000 143,235
- ---------------------------------------------------------------------
Bayerische Landesbank Girozentrale
(New York Branch) Nikkei 225
Equity-Linked Nts., 6.03%, 4/23/98 300,000 330,630
- ---------------------------------------------------------------------
Bayerische Landesbank Girozentrale
(New York Branch) Canada Banker's
Acceptance Indexed Yield Nts.,
8.405%, 5/22/98 400,000 397,120
- ---------------------------------------------------------------------
Bayerische Landesbank Girozentrale
(New York Branch) Lehman Brothers
High Yield Bond Index Nts., 12.50%,
7/8/97 250,000 256,900
- ---------------------------------------------------------------------
Canadian Imperial Bank of Commerce
(New York Branch) Three Month
British Pound LIBOR Forward Linked
Nts., 5.79%, 5/22/98 400,000 400,400
- ---------------------------------------------------------------------
Canadian Imperial Bank of Commerce,
U.S. Dollar/Japanese Yen Basis
Arbitrage Nts., 10.24%, 4/14/98(3) 190,000 189,050
- ---------------------------------------------------------------------
Credit Suisse First Boston (Cayman)
Ltd., City of Moscow, Credit &
Convertibility Linked Nts., Series
EM 215, Zero Coupon, 11.11%,
12/30/97(2)(10) 250,000 236,885
- ---------------------------------------------------------------------
Daiwa Finance Corp. (New York),
Daiwa Physical Commodity Excess
Return Index Linked Nts., 4.719%,
8/21/97(4) 500,000 437,450
- ---------------------------------------------------------------------
First Boston Corp. (The), Russian
GKO Linked Nts., Zero Coupon,
13.949%, 1/20/98(10) 100,000 92,984
- ---------------------------------------------------------------------
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,
11.30%, 4/1/00 and an interest rate
swap between Goldman Sachs and the
Trust](3) 156,521 161,374
- ---------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp.
South African Rand/U.S. Dollar
Linked Nts., Zero Coupon, 15.41%,
3/18/98(10) 365,000 321,627
- ---------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp.
U.S. Dollar Denominated Pass-
Through Nts. Linked to Malaysian
Ringgit, Zero Coupon, 7.119%,
10/14/97(10) 500,000 486,095
- ---------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp.
Zero Coupon Czech Koruna Linked
Promissory Nts., 10.979%,
11/17/97(10) CZK 15,775,948 451,583
- ---------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp.
Zero Coupon Czech Koruna/U.S.
Dollar Linked Nts., 11.098%,
3/4/98(10) 180,000 142,405
- ---------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp.
Zero Coupon Slovakia Koruna Linked
Nts., 12.522%, 9/4/97(10) 100,000 94,785
</TABLE>
92
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) NOTE 1
- ---------------------------------------------------------------------
STRUCTURED INSTRUMENTS (CONTINUED)
<S> <C> <C> <C>
- ---------------------------------------------------------------------
Lehman Brothers Holdings, Inc.
Greek Drachma/Swiss Franc Linked
Nts., Zero Coupon, 14.709%,
1/15/98(10) $ 100,000 $ 99,930
- ---------------------------------------------------------------------
Lehman Brothers Holdings, Inc. U.S.
Dollar Nts. Linked to the Greek
Drachma/Swiss Franc Exchange Rate,
Zero Coupon, 25.635%, 12/23/97(10) 300,000 315,870
- ---------------------------------------------------------------------
Lehman Brothers Holdings, Inc. U.S.
Dollar Nts. Linked to the Greek
Drachma/Swiss Franc Exchange Rate,
Zero Coupon, 22.869%, 12/26/97(10) 350,000 367,955
- ---------------------------------------------------------------------
Lehman Brothers Holdings, Inc. U.S.
Dollar Nts. Linked to the Greek
Drachma/Swiss Franc Exchange Rate,
Zero Coupon, 26.092%, 12/30/97(10) 700,000 732,550
- ---------------------------------------------------------------------
Morgan Guaranty Trust Co. of New
York, Japanese Government Bond 193
Currency Protected Bank Nts.,
8.14%, 4/29/98 160,000 166,128
- ---------------------------------------------------------------------
Morgan Guaranty Trust Co. of New
York, Nassau Branch, Leveraged Nts.
on Emerging Markets Bond Index
Yield, 12%, 11/14/97 1,000,000 997,400
- ---------------------------------------------------------------------
Salomon, Inc. Chilean Peso Indexed
Enhanced Access Nts., Zero Coupon,
9.177%, 6/18/98(10) 200,000 181,520
- ---------------------------------------------------------------------
Salomon, Inc. Chilean Peso-Indexed
Enhanced Access Nts., Zero Coupon,
10.636%, 9/9/97(10) 100,000 97,470
- ---------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
13.714%, 4/3/98(10) 400,000 358,912
- ---------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
14.166%, 5/22/98(10) 225,000 197,476
- ---------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
14.096%, 5/7/98(10) 700,000 617,883
- ---------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
12.071%, 8/15/97(10) 300,000 295,302
- ---------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
11.862%, 8/28/97(10) 550,000 538,840
- ---------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
12.097%, 8/7/97(10) 365,000 360,204
- ---------------------------------------------------------------------
Salomon, Inc. Russian S-Account
Credit Linked Nts., Zero Coupon,
12.068%, 8/8/97(10) 200,000 197,372
- ---------------------------------------------------------------------
SPARC EM Ltd., Russian GKO
Linked/U.S. Dollar Nts., Zero
Coupon, 12.238%, 10/15/97(10) 90,000 86,635
- ---------------------------------------------------------------------
Standard Chartered Bank, Korean
Wong Principal & Interest Linked
Deposit, 8.04%, 12/17/97 400,000 397,800
- ---------------------------------------------------------------------
Standard Chartered Bank, Korean
Wong Principal & Interest Linked
Deposit, 8.63%, 6/30/98 200,000 198,220
------------
Total Structured Instruments (Cost
$10,503,189) 10,349,990
</TABLE>
<TABLE>
<CAPTION>
DATE STRIKE CONTRACTS
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALL OPTIONS PURCHASED - 0.1%
U.S. Treasury Bonds, 6.625%,
2/15/27 Call Opt. (Cost $133,822) 8/97 95.938% 7,480 179,987
- ----------------------------------------------------------------------------
PUT OPTIONS PURCHASED - 0.0%
Italy (Republic of) Treasury Bonds,
Buoni del Tesoro Poliennali, 9.50%,
5/1/01 Put Opt.(3) (Cost $8,391) 7/97 102.30% 395 --
</TABLE>
93
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
NOTE 1
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL INVESTMENTS, AT VALUE (COST
$164,503,401) 104.7% $ 166,327,280
- -----------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (4.7) (7,396,584)
---------------- ----------------
NET ASSETS 100.0% $ 158,930,696
---------------- ----------------
---------------- ----------------
</TABLE>
1. Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP - Argentine Peso
AUD - Australian Dollar
CAD - Canadian Dollar
CZK - Czech Koruna
DEM - German Deutsche Mark
ESP - Spanish Peseta
FIM - Finnish Markka
GBP - British Pound Sterling
IDR - Indonesian Rupiah
ITL - Italian Lira
JPY - Japanese Yen
MXP - Mexican Peso
MYR - Malaysian Ringgit
NOK - Norwegian Krone
NZD - New Zealand Dollar
PLZ - Polish Zloty
SKK - Slovakia Koruna
ZAR - South African Rand
2. When-issued security to be delivered and settled after June 30, 1997.
3. Identifies issues considered to be illiquid or restricted - See Note 8 of
Notes to Financial Statements.
4. Represents the current interest rate for a variable rate security.
5. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $12,041,175 or 7.58% of the Fund's net
assets, at June 30, 1997.
6. A sufficient amount of securities has been designated to cover outstanding
written call and put options, as follows:
<TABLE>
<CAPTION>
FACE/
CONTRACTS
SUBJECT TO EXPIRATION EXERCISE PREMIUM MARKET VALUE
CALL DATE PRICE RECEIVED NOTE 1
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Banco Hipotecario Nacional (Argentina)
Medium-Term Nts., 10.625%, 8/7/06 Call
Option $ 400,000 8/7/00 100% $ 3,680 $ 36,000
Germany (Republic of) Bonds, Series 118,
5.25%, 2/21/01 Put Option $ 374,662 7/16/97 99.57% DEM 8,992 --
Japanese Yen Put Option 100,000,000 7/10/97 115.00 JPY 4,635 4,300
Japanese Yen Put Option 100,000,000 7/15/97 116.50 JPY 4,635 1,600
New Zealand Dollar Call Option 190,000 8/25/97 1.449 NZD 1,368 460
New Zealand Dollar Call Option 260,000 8/27/97 1.449 NZD 1,872 634
New Zealand Dollar Call Option 565,000 8/29/97 1.449 NZD 4,191 1,525
----------- -------------
$ 29,373 $ 44,519
----------- -------------
----------- -------------
</TABLE>
7. A sufficient amount of securities has been designated to cover outstanding
forward foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
8. Securities with an aggregate market value of $1,289,704 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
9. Interest or dividend is paid in kind.
10. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
94
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
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.
95
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 3.1%
- ---------------------------------------------------------------------
U.S. Treasury Bonds, 6.50%,
11/15/26 (Cost $2,772,706) $ 2,915,000 $ 2,794,759
- ---------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS AND
NOTES - 5.9%
- ---------------------------------------------------------------------
Adaptec, Inc., 4.75% Cv. Sub. Nts.,
2/1/04(1) 1,000,000 993,750
- ---------------------------------------------------------------------
ALZA Corp., 5% Cv. Sub. Debs.,
5/1/06 350,000 353,062
- ---------------------------------------------------------------------
Continental Airlines, Inc., 6.75%
Cv. Sub. Nts., 4/15/06(2) 500,000 653,125
- ---------------------------------------------------------------------
Corporate Express, Inc., 4.50% Cv.
Sub. Nts., 7/1/00 750,000 669,375
- ---------------------------------------------------------------------
Einstein/Noah Bagel Corp., 7.25%
Cv. Sub. Debs., 6/1/04(2) 500,000 431,875
- ---------------------------------------------------------------------
Omnicom Group, Inc., 4.25% Cv. Sub.
Debs., 1/3/07(2) 500,000 592,500
- ---------------------------------------------------------------------
Platinum Technology, Inc., 6.75%
Cv. Sub. Nts., 11/15/01 500,000 607,500
- ---------------------------------------------------------------------
Saks Holdings, Inc., 5.50% Cv. Sub.
Nts., 9/15/06 400,000 345,500
- ---------------------------------------------------------------------
Time Warner, Inc., Zero Coupon Cv.
Sr. Sub. Nts., 5.125%, 6/22/13(3) 500,000 230,625
- ---------------------------------------------------------------------
U.S. Office Products Co., 5.50% Cv.
Sub. Nts., 5/15/03(2) 500,000 445,000
-------------
Total Convertible Corporate Bonds
and Notes (Cost $5,073,001) 5,322,312
SHARES
- ---------------------------------------------------------------------
COMMON STOCKS - 78.6%
- ---------------------------------------------------------------------
BASIC MATERIALS - 3.4%
- ---------------------------------------------------------------------
CHEMICALS - 3.4%
Du Pont (E.I.) De Nemours & Co. 6,000 377,250
- ---------------------------------------------------------------------
IMC Global, Inc. 40,000 1,400,000
- ---------------------------------------------------------------------
Monsanto Co. 5,000 215,312
- ---------------------------------------------------------------------
Morton International, Inc. 2,500 75,469
- ---------------------------------------------------------------------
Olin Corp. 22,500 878,906
- ---------------------------------------------------------------------
Sigma-Aldrich Corp. 4,500 157,781
-------------
3,104,718
- ---------------------------------------------------------------------
CONSUMER CYCLICALS - 16.2%
- ---------------------------------------------------------------------
AUTOS & HOUSING - 1.6%
General Motors Corp. 7,500 417,656
- ---------------------------------------------------------------------
Lear Seating Corp.(4) 15,200 674,500
- ---------------------------------------------------------------------
Republic Industries, Inc.(4) 10,000 248,750
- ---------------------------------------------------------------------
Stanley Works (The) 3,500 140,000
-------------
1,480,906
- ---------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 6.9%
AMR Corp.(4) 2,500 231,250
- ---------------------------------------------------------------------
Brinker International, Inc.(4) 26,500 377,625
- ---------------------------------------------------------------------
Delta Air Lines, Inc. 7,500 615,000
- ---------------------------------------------------------------------
Eastman Kodak Co. 7,500 575,625
- ---------------------------------------------------------------------
Gaylord Entertainment Co., Cl. A 6,000 138,375
</TABLE>
96
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
LEISURE & ENTERTAINMENT (CONTINUED)
<S> <C> <C>
Hilton Hotels Corp. 2,500 $ 66,406
- ---------------------------------------------------------------------
ITT Corp. (New)(4) 12,500 763,281
- ---------------------------------------------------------------------
Marriott International, Inc. 5,000 306,875
- ---------------------------------------------------------------------
McDonald's Corp. 6,000 289,875
- ---------------------------------------------------------------------
Mirage Resorts, Inc.(4) 12,500 315,625
- ---------------------------------------------------------------------
Time Warner, Inc. 30,000 1,447,500
- ---------------------------------------------------------------------
Viacom, Inc., Cl. B(4) 37,500 1,125,000
-------------
6,252,437
- ---------------------------------------------------------------------
MEDIA - 2.4%
Cox Communications, Inc., Cl. A(4) 30,000 720,000
- ---------------------------------------------------------------------
Evergreen Media Corp., Cl. A(4) 10,000 446,250
- ---------------------------------------------------------------------
Jacor Communications, Inc.(4) 13,000 497,250
- ---------------------------------------------------------------------
SFX Broadcasting, Inc., Cl. A(4) 12,500 527,344
-------------
2,190,844
- ---------------------------------------------------------------------
RETAIL: GENERAL - 2.5%
Dillard's, Inc. 10,000 346,250
- ---------------------------------------------------------------------
Federated Department Stores,
Inc.(4) 55,000 1,911,250
-------------
2,257,500
- ---------------------------------------------------------------------
RETAIL: SPECIALTY - 2.8%
Abercrombie & Fitch Co., Cl. A(4) 27,500 508,750
- ---------------------------------------------------------------------
Gap, Inc. (The)(4) 27,500 1,069,062
- ---------------------------------------------------------------------
Nine West Group, Inc.(4) 25,000 954,687
-------------
2,532,499
- ---------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 9.9%
- ---------------------------------------------------------------------
BEVERAGES - 1.3%
Anheuser-Busch Cos., Inc. 22,500 943,594
- ---------------------------------------------------------------------
PepsiCo, Inc. 5,500 206,594
-------------
1,150,188
- ---------------------------------------------------------------------
FOOD - 1.5%
H.J. Heinz Co. 7,500 345,937
- ---------------------------------------------------------------------
Nabisco Holdings Corp., Cl. A 2,500 99,687
- ---------------------------------------------------------------------
Unilever NV, NY Shares 4,000 872,000
-------------
1,317,624
- ---------------------------------------------------------------------
HEALTHCARE/DRUGS - 2.4%
American Home Products Corp. 8,000 612,000
- ---------------------------------------------------------------------
Amgen, Inc.(4) 13,500 784,687
- ---------------------------------------------------------------------
Johnson & Johnson 2,500 160,937
- ---------------------------------------------------------------------
Schering-Plough Corp. 13,000 622,375
-------------
2,179,999
</TABLE>
97
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/SUPPLIES & SERVICES -
1.4%
Bard (C.R.), Inc. 2,500 $ 90,781
- ---------------------------------------------------------------------
Boston Scientific Corp.(4) 2,500 153,594
- ---------------------------------------------------------------------
Cardinal Health, Inc. 1,500 85,875
- ---------------------------------------------------------------------
Guidant Corp. 7,500 637,500
- ---------------------------------------------------------------------
HEALTHSOUTH Corp.(4) 4,000 99,750
- ---------------------------------------------------------------------
Horizon/CMS Healthcare Corp.(4) 10,000 200,625
-------------
1,268,125
- ---------------------------------------------------------------------
HOUSEHOLD GOODS - 0.8%
Kimberly-Clark Corp. 15,000 746,250
- ---------------------------------------------------------------------
TOBACCO - 2.5%
Philip Morris Cos., Inc. 35,000 1,553,125
- ---------------------------------------------------------------------
RJR Nabisco Holdings Corp. 22,500 742,500
-------------
2,295,625
- ---------------------------------------------------------------------
ENERGY - 3.0%
- ---------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 1.6%
Apache Corp. 7,500 243,750
- ---------------------------------------------------------------------
BJ Services Co.(4) 2,000 107,250
- ---------------------------------------------------------------------
Santa Fe International Corp.(4) 10,000 340,000
- ---------------------------------------------------------------------
Schlumberger Ltd. 1,200 150,000
- ---------------------------------------------------------------------
Weatherford Enterra, Inc.(4) 7,000 269,500
- ---------------------------------------------------------------------
Western Atlas, Inc.(4) 5,000 366,250
-------------
1,476,750
- ---------------------------------------------------------------------
OIL-INTEGRATED - 1.4%
Atlantic Richfield Co. 4,200 296,100
- ---------------------------------------------------------------------
Chevron Corp. 2,000 147,875
- ---------------------------------------------------------------------
Exxon Corp. 3,400 209,100
- ---------------------------------------------------------------------
Mobil Corp. 2,600 181,675
- ---------------------------------------------------------------------
Royal Dutch Petroleum Co., NY
Shares 3,200 171,800
- ---------------------------------------------------------------------
Texaco, Inc. 1,350 146,812
- ---------------------------------------------------------------------
Unocal Corp. 3,000 116,437
-------------
1,269,799
- ---------------------------------------------------------------------
FINANCIAL - 16.3%
- ---------------------------------------------------------------------
BANKS - 7.9%
BankAmerica Corp. 2,500 161,406
- ---------------------------------------------------------------------
Chase Manhattan Corp. (New) 27,500 2,669,219
- ---------------------------------------------------------------------
Citicorp 2,750 331,547
- ---------------------------------------------------------------------
Collective Bancorp, Inc. 10,000 448,750
- ---------------------------------------------------------------------
Commercial Federal Corp. 7,500 278,437
- ---------------------------------------------------------------------
First Commerce Corp. 7,500 330,000
- ---------------------------------------------------------------------
First Union Corp. 6,500 601,250
</TABLE>
98
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
BANKS (CONTINUED)
<S> <C> <C>
Fleet Financial Group, Inc. 8,500 $ 537,625
- ---------------------------------------------------------------------
J.P. Morgan & Co., Inc. 3,500 365,312
- ---------------------------------------------------------------------
Life Financial Corp.(4) 12,500 168,750
- ---------------------------------------------------------------------
Societe Generale 4,250 474,882
- ---------------------------------------------------------------------
Summit Bancorp 1,000 50,125
- ---------------------------------------------------------------------
Union Planters Corp. 13,500 700,312
-------------
7,117,615
- ---------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 5.2%
Advanta Corp., Cl. B 10,000 356,875
- ---------------------------------------------------------------------
American Express Co. 15,000 1,117,500
- ---------------------------------------------------------------------
Associates First Capital Corp., Cl.
A 5,000 277,500
- ---------------------------------------------------------------------
Fannie Mae 3,750 163,594
- ---------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 5,000 171,875
- ---------------------------------------------------------------------
MBNA Corp. 5,000 183,125
- ---------------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 17,500 753,594
- ---------------------------------------------------------------------
Student Loan Corp. 5,200 220,675
- ---------------------------------------------------------------------
Student Loan Marketing Assn. 2,250 285,750
- ---------------------------------------------------------------------
Travelers Group, Inc. 17,750 1,119,359
-------------
4,649,847
- ---------------------------------------------------------------------
INSURANCE - 3.2%
Allstate Corp. 15,250 1,113,250
- ---------------------------------------------------------------------
Everest Reinsurance Holdings, Inc. 45,000 1,783,125
-------------
2,896,375
- ---------------------------------------------------------------------
INDUSTRIAL - 8.2%
- ---------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 2.7%
Raychem Corp. 15,000 1,115,625
- ---------------------------------------------------------------------
Westinghouse Electric Corp. 55,400 1,281,125
-------------
2,396,750
- ---------------------------------------------------------------------
INDUSTRIAL MATERIALS - 1.3%
Crown Cork & Seal Co., Inc. 22,500 1,202,344
- ---------------------------------------------------------------------
INDUSTRIAL SERVICES - 1.6%
Cognizant Corp. 32,500 1,316,250
- ---------------------------------------------------------------------
Intelligroup, Inc.(4) 15,000 144,375
-------------
1,460,625
- ---------------------------------------------------------------------
MANUFACTURING - 2.6%
American Standard Cos., Inc.(4)(5) 50,000 2,237,500
- ---------------------------------------------------------------------
Avery-Dennison Corp. 1,700 68,213
-------------
2,305,713
</TABLE>
99
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
<S> <C> <C>
- ---------------------------------------------------------------------
TECHNOLOGY - 19.9%
- ---------------------------------------------------------------------
AEROSPACE/DEFENSE - 1.0%
Lockheed Martin Corp. 5,000 $ 517,813
- ---------------------------------------------------------------------
McDonnell Douglas Corp. 5,000 342,500
-------------
860,313
- ---------------------------------------------------------------------
COMPUTER HARDWARE - 8.5%
Adaptec, Inc.(4) 9,000 312,750
- ---------------------------------------------------------------------
Cabletron Systems, Inc.(4) 27,500 778,594
- ---------------------------------------------------------------------
Gateway 2000, Inc.(4) 3,000 97,313
- ---------------------------------------------------------------------
Ikon Office Solutions, Inc. 77,500 1,932,656
- ---------------------------------------------------------------------
Ingram Micro, Inc., Cl. A(4) 20,000 482,500
- ---------------------------------------------------------------------
International Business Machines
Corp. 13,000 1,172,438
- ---------------------------------------------------------------------
Seagate Technology(4) 17,500 615,781
- ---------------------------------------------------------------------
Sun Microsystems, Inc.(4) 30,000 1,116,563
- ---------------------------------------------------------------------
Xerox Corp. 15,000 1,183,125
-------------
7,691,720
- ---------------------------------------------------------------------
COMPUTER SOFTWARE - 4.5%
First Data Corp. 65,000 2,855,938
- ---------------------------------------------------------------------
Structural Dynamics Research
Corp.(4) 42,500 1,115,625
- ---------------------------------------------------------------------
Sungard Data Systems, Inc.(4) 2,500 116,250
-------------
4,087,813
- ---------------------------------------------------------------------
ELECTRONICS - 3.4%
Intel Corp. 2,000 283,625
- ---------------------------------------------------------------------
LSI Logic Corp.(4) 2,500 80,000
- ---------------------------------------------------------------------
Thermo Electron Corp. 5,250 180,469
- ---------------------------------------------------------------------
Waters Corp.(4) 70,000 2,511,250
-------------
3,055,344
- ---------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY -
2.5%
ADC Telecommunications, Inc.(4) 2,500 83,438
- ---------------------------------------------------------------------
Brooks Fiber Properties, Inc.(4) 2,500 84,375
- ---------------------------------------------------------------------
Cisco Systems, Inc.(4) 11,500 771,938
- ---------------------------------------------------------------------
LCI International, Inc.(4) 40,000 875,000
- ---------------------------------------------------------------------
QUALCOMM, Inc.(4) 3,000 152,625
- ---------------------------------------------------------------------
WorldCom, Inc. 10,000 320,000
-------------
2,287,376
- ---------------------------------------------------------------------
UTILITIES - 1.7%
- ---------------------------------------------------------------------
GAS UTILITIES - 0.4%
Sonat, Inc. 6,750 345,938
- ---------------------------------------------------------------------
TELEPHONE UTILITIES - 1.3%
GTE Corp. 11,500 504,563
</TABLE>
100
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------------
TELEPHONE UTILITIES (CONTINUED)
<S> <C> <C>
Teleport Communications Group,
Inc., Cl. A(4) 20,000 $ 682,500
-------------
1,187,063
-------------
Total Common Stocks (Cost
$61,694,226) 71,068,100
- ---------------------------------------------------------------------
PREFERRED STOCKS - 4.9%
- ---------------------------------------------------------------------
Automatic Commission Exchange
Security, 6.50% Cv. Preferred
(exchangeable to common stock of
Republic Industries, Inc. 'TRACES'
effective 5/15/00)(4) 30,000 735,000
- ---------------------------------------------------------------------
Cablevision Systems Corp., 8.50%
Cum. Cv., Series I 7,500 203,438
- ---------------------------------------------------------------------
Evergreen Media Corp., 6% Cv.
Preferred(2)(4) 20,000 1,102,500
- ---------------------------------------------------------------------
Host Marriott Financial Trust,
6.75% Cv. Preferred Stock(2) 10,000 585,000
- ---------------------------------------------------------------------
IXC Communications, Inc., 7.25% Cv.
Cum., Non-Vtg.(2)(4)(6) 5,000 592,500
- ---------------------------------------------------------------------
Microsoft Corp., $2.196 Cv., Series
A 2,500 217,500
- ---------------------------------------------------------------------
QUALCOMM Financial Trust I, 5.75%
Cum. Cv. Preferred Securities,
Non-Vtg.(2)(4) 20,000 965,000
-------------
Total Preferred Stocks (Cost
$4,066,062) 4,400,938
- ---------------------------------------------------------------------
OTHER SECURITIES - 2.7%
- ---------------------------------------------------------------------
Continental Air Finance Trust,
8.50% Cv. Trust Originated
Preferred Securities(4) 5,000 400,000
- ---------------------------------------------------------------------
Continental Airlines Finance Trust,
8.50% Cv. Trust Originated
Preferred Securities(2) 5,000 400,000
- ---------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6% Cv.
Structured Yield Product
Exchangeable for Common Stock of
Cox Communications, Inc., 6/1/99 17,500 417,813
- ---------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.25%
Structured Yield Product
Exchangeable for Stock of IMC
Global, Inc. 10,000 375,000
- ---------------------------------------------------------------------
SFX Broadcasting, Inc., 6.50% Cum.
Cv., Series D 7,500 420,000
- ---------------------------------------------------------------------
SFX Broadcasting, Inc., 6.50% Cv.
Preferred, Series D(2) 7,500 420,000
-------------
Total Other Securities (Cost
$2,161,479) 2,432,813
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------------
REPURCHASE AGREEMENTS - 4.8%
- ---------------------------------------------------------------------
Repurchase agreement with J.P.
Morgan Securities, Inc., 5.95%,
dated 6/30/97, to be repurchased at
$4,400,727 on 7/1/97,
collateralized by U.S. Treasury
Bonds, 8.875% - 12%, 8/15/13 -
2/15/19, with a value of $4,128,740
and U.S. Treasury Nts., 7.875%,
11/15/04, with a value of $376,486
(Cost $4,400,000) $ 4,400,000 4,400,000
- ---------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$80,167,474) 100.0% 90,418,922
- ---------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.0 35,090
------------ -------------
NET ASSETS 100.0% $ 90,454,012
------------ -------------
------------ -------------
</TABLE>
1. Identifies issues considered to be illiquid or restricted - See Note 6 of
Notes to Financial Statements.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $6,187,500 or 6.84% of the Fund's net
assets, at June 30, 1997.
3. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
4. Non-income producing security.
101
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
5. A sufficient amount of securities 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 NOTE 1
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
American Standard
Cos. 25 7/97 $45 $3,437 $2,656
</TABLE>
6. Interest or dividend is paid in kind.
See accompanying Notes to Financial Statements.
102
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER OPPENHEIMER
MONEY HIGH INCOME BOND
FUND FUND FUND
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost *)
(including repurchase agreements
**) - see accompanying statements $132,749,718 $227,330,762 $562,612,583
- -------------------------------------------------------------------------------------
Unrealized appreciation on forward
foreign currency exchange contracts
- -see applicable note -- -- 62,331
- -------------------------------------------------------------------------------------
Cash 5,072 -- 1,684,129
- -------------------------------------------------------------------------------------
Receivables:
Dividends, interest and principal
paydowns 538,315 3,044,370 6,716,257
Closed forward foreign currency
exchange contracts -- 99,402 265,284
Daily variation on futures
contracts - see applicable note -- 32,604 37,342
Shares of beneficial interest sold 345,145 207,037 513,129
Investments sold -- 10,411,731 40,052,794
- -------------------------------------------------------------------------------------
Other 3,070 3,545 7,028
-------------- -------------- --------------
Total assets 133,641,320 241,129,451 611,950,877
- -------------------------------------------------------------------------------------
LIABILITIES
Bank overdraft -- 3,909,188 --
- -------------------------------------------------------------------------------------
Options written, at value (premiums
received ***) - see accompanying
statements and notes -- 30,360 177,342
- -------------------------------------------------------------------------------------
Unrealized depreciation on forward
foreign exchange contracts - see
applicable note -- -- 298
- -------------------------------------------------------------------------------------
Payables and other liabilities:
Closed forward foreign currency
exchange contracts -- 56,273 152,491
Daily variation on futures
contracts - see applicable note -- 84,729 63,750
Dividends 206,860 -- --
Trustees' fees -- -- 548
Custodian fees -- -- --
Investments purchased (including
those purchased on a when-issued
basis****) - see applicable note -- 15,063,769 168,265,099
Shares of beneficial interest
redeemed 437,650 4,947,967 231,554
Other 23,875 56,492 49,998
-------------- -------------- --------------
Total liabilities 668,385 24,148,778 168,941,080
- -------------------------------------------------------------------------------------
NET ASSETS $132,972,935 $216,980,673 $443,009,797
-------------- -------------- --------------
-------------- -------------- --------------
- -------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $132,990,008 $205,521,946 $437,396,507
- -------------------------------------------------------------------------------------
Undistributed net investment income -- 1,045,478 3,111,181
- -------------------------------------------------------------------------------------
Accumulated net realized gain
(loss) from investments and foreign
currency transactions (17,073) 1,042,447 (253,627)
- -------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) on investments and
translation of assets and
liabilities denominated in foreign
currencies -- 9,370,802 2,755,736
-------------- -------------- --------------
Net assets $132,972,935 $216,980,673 $443,009,797
-------------- -------------- --------------
-------------- -------------- --------------
- -------------------------------------------------------------------------------------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 132,990,014 19,478,456 38,350,750
- -------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $ 1.00 $ 11.14 $ 11.55
* Cost $132,749,718 $217,955,147 $559,878,159
** Repurchase agreements $ -- $ -- $ --
*** Premiums received $ -- $ 21,670 $ 176,562
**** When-issued basis $ -- $ -- $160,372,702
</TABLE>
()See accompanying Notes to Financial Statements.
103
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER
CAPITAL OPPENHEIMER MULTIPLE
APPRECIATION GROWTH STRATEGIES
FUND FUND FUND
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost *)
(including repurchase agreements
**) - see accompanying statements $765,111,244 $378,988,513 $568,986,904
- --------------------------------------------------------------------------------
Unrealized appreciation on forward
foreign currency exchange contracts
- -see applicable note -- -- --
- --------------------------------------------------------------------------------
Cash -- 3,027,358 365,118
- --------------------------------------------------------------------------------
Receivables:
Dividends, interest and principal
paydowns 145,401 157,457 3,476,566
Closed forward foreign currency
exchange contracts -- -- --
Daily variation on futures
contracts - see applicable note -- -- 18,886
Shares of beneficial interest sold 944,305 725,698 576,635
Investments sold 4,587,960 471,424 723,936
- --------------------------------------------------------------------------------
Other 4,490 3,275 5,331
------------- ------------- -------------
Total assets 770,793,400 383,373,725 574,153,376
- --------------------------------------------------------------------------------
LIABILITIES
Bank overdraft 34,926 -- --
- --------------------------------------------------------------------------------
Options written, at value (premiums
received ***) - see accompanying
statements and notes -- -- 2,431,438
- --------------------------------------------------------------------------------
Unrealized depreciation on forward
foreign exchange contracts - see
applicable note -- -- --
- --------------------------------------------------------------------------------
Payables and other liabilities:
Closed forward foreign currency
exchange contracts -- -- --
Daily variation on futures
contracts - see applicable note -- -- --
Dividends -- -- --
Trustees' fees 606 -- --
Custodian fees -- -- --
Investments purchased (including
those purchased on a when-issued
basis****) - see applicable note 8,156,945 871,983 7,110,874
Shares of beneficial interest
redeemed 30,966 65,389 37,941
Other 63,324 53,460 60,791
------------- ------------- -------------
Total liabilities 8,286,767 990,832 9,641,044
- --------------------------------------------------------------------------------
NET ASSETS $762,506,633 $382,382,893 $564,512,332
------------- ------------- -------------
------------- ------------- -------------
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $609,378,841 $279,568,162 $463,045,313
- --------------------------------------------------------------------------------
Undistributed net investment income 1,437,528 2,100,161 1,707,326
- --------------------------------------------------------------------------------
Accumulated net realized gain
(loss) from investments and foreign
currency transactions 5,193,183 17,403,437 9,848,272
- --------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) on investments and
translation of assets and
liabilities denominated in foreign
currencies 146,497,081 83,311,133 89,911,421
------------- ------------- -------------
Net assets $762,506,633 $382,382,893 $564,512,332
------------- ------------- -------------
------------- ------------- -------------
- --------------------------------------------------------------------------------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 19,529,859 13,006,593 34,999,157
- --------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $ 39.04 $ 29.40 $ 16.13
* Cost $618,614,163 $295,677,380 $478,318,980
** Repurchase agreements $119,600,000 $ 74,400,000 $114,400,000
*** Premiums received $ -- $ -- $ 1,664,690
**** When-issued basis $ -- $ -- $ --
</TABLE>
()See accompanying Notes to Financial Statements.
104
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER OPPENHEIMER
GLOBAL STRATEGIC GROWTH &
SECURITIES BOND INCOME
FUND FUND FUND
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost *)
(including repurchase agreements
**) - see accompanying statements $818,969,257 $166,327,280 $ 90,418,922
- --------------------------------------------------------------------------------
Unrealized appreciation on forward
foreign currency exchange contracts
- -see applicable note 978,284 198,466 --
- --------------------------------------------------------------------------------
Cash 82,302 909,051 461,228
- --------------------------------------------------------------------------------
Receivables:
Dividends, interest and principal
paydowns 2,526,496 2,395,088 128,338
Closed forward foreign currency
exchange contracts -- 39,378 --
Daily variation on futures
contracts - see applicable note -- 35,747 --
Shares of beneficial interest sold 687,715 770,734 510,772
Investments sold 2,055,143 3,593,768 552,250
- --------------------------------------------------------------------------------
Other 4,524 2,392 2,478
------------- ------------- -------------
Total assets 825,303,721 174,271,904 92,073,988
- --------------------------------------------------------------------------------
LIABILITIES
Bank overdraft -- -- --
- --------------------------------------------------------------------------------
Options written, at value (premiums
received ***) - see accompanying
statements and notes -- 44,519 2,656
- --------------------------------------------------------------------------------
Unrealized depreciation on forward
foreign exchange contracts - see
applicable note -- 43,339 --
- --------------------------------------------------------------------------------
Payables and other liabilities:
Closed forward foreign currency
exchange contracts -- 132,584 --
Daily variation on futures
contracts - see applicable note -- 2,813 --
Dividends -- -- --
Trustees' fees -- -- 46
Custodian fees 165,104 -- --
Investments purchased (including
those purchased on a when-issued
basis****) - see applicable note 1,795,942 15,058,099 1,588,668
Shares of beneficial interest
redeemed 957,877 19,814 86
Other 44,648 40,040 28,520
------------- ------------- -------------
Total liabilities 2,963,571 15,341,208 1,619,976
- --------------------------------------------------------------------------------
NET ASSETS $822,340,150 $158,930,696 $ 90,454,012
------------- ------------- -------------
------------- ------------- -------------
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $652,162,618 $155,291,475 $ 78,572,326
- --------------------------------------------------------------------------------
Undistributed net investment income 6,335,664 853,732 43,982
- --------------------------------------------------------------------------------
Accumulated net realized gain
(loss) from investments and foreign
currency transactions 20,324,605 905,315 1,585,272
- --------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) on investments and
translation of assets and
liabilities denominated in foreign
currencies 143,517,263 1,880,174 10,252,432
------------- ------------- -------------
Net assets $822,340,150 $158,930,696 $ 90,454,012
------------- ------------- -------------
------------- ------------- -------------
- --------------------------------------------------------------------------------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 40,567,208 31,284,422 5,090,942
- --------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $ 20.27 $ 5.08 $ 17.77
* Cost $676,424,366 $164,503,401 $ 80,167,474
** Repurchase agreements $ -- $ -- $ --
*** Premiums received $ -- $ 29,373 $ 3,437
**** When-issued basis $ -- $ 12,596,675 $ --
</TABLE>
()See accompanying Notes to Financial Statements.
105
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER OPPENHEIMER
MONEY HIGH INCOME BOND
FUND FUND FUND
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest (net of withholding taxes
of *) $ 3,770,243 $ 9,581,688 $ 16,401,807
- -------------------------------------------------------------------------------------
Dividends (net of withholding taxes
of **) -- 594,489 139,316
-------------- -------------- --------------
Total income 3,770,243 10,176,177 16,541,123
- -------------------------------------------------------------------------------------
EXPENSES
Management fees - see applicable
note 303,738 748,188 1,552,002
- -------------------------------------------------------------------------------------
Custodian fees and expenses 9,028 44,780 40,858
- -------------------------------------------------------------------------------------
Legal and auditing fees 7,700 10,885 10,829
- -------------------------------------------------------------------------------------
Insurance expenses 1,683 2,083 3,020
- -------------------------------------------------------------------------------------
Trustees' fees and expenses 1,338 2,737 904
- -------------------------------------------------------------------------------------
Registration and filing fees 3,299 7,483 5,837
- -------------------------------------------------------------------------------------
Other 513 82 --
-------------- -------------- --------------
Total expenses 327,299 816,238 1,613,450
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,442,944 9,359,939 14,927,673
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) from:
Investments (including premiums on
written options exercised) 1,294 2,512,431 1,765,172
Closing of futures contracts -- (25,342) --
Closing and expiration of options
written -- (76,008) (34,811)
Foreign currency transactions -- (862,542) (1,867,789)
- -------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation:
Investments -- (1,139,533) (1,711,953)
Translation of assets and
liabilities denominated in foreign
currencies -- (55,328) (633,814)
-------------- -------------- --------------
Net realized and unrealized gain
(loss) 1,294 353,678 (2,483,195)
- -------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 3,444,238 $ 9,713,617 $ 12,444,478
-------------- -------------- --------------
-------------- -------------- --------------
* Interest $ -- $ -- $ 11,106
** Dividends $ -- $ -- $ --
</TABLE>
()See accompanying Notes to Financial Statements.
106
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER
CAPITAL OPPENHEIMER MULTIPLE
APPRECIATION GROWTH STRATEGIES
FUND FUND FUND
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest (net of withholding taxes
of *) $ 3,619,597 $ 2,268,514 $ 10,835,102
- -------------------------------------------------------------------------------------
Dividends (net of withholding taxes
of **) 277,197 1,059,555 1,786,920
-------------- -------------- --------------
Total income 3,896,794 3,328,069 12,622,022
- -------------------------------------------------------------------------------------
EXPENSES
Management fees - see applicable
note 2,319,145 1,195,315 1,854,352
- -------------------------------------------------------------------------------------
Custodian fees and expenses 27,402 230 39,928
- -------------------------------------------------------------------------------------
Legal and auditing fees 9,419 4,456 12,282
- -------------------------------------------------------------------------------------
Insurance expenses 2,493 1,978 2,983
- -------------------------------------------------------------------------------------
Trustees' fees and expenses 2,125 1,246 4,233
- -------------------------------------------------------------------------------------
Registration and filing fees 28,320 16,313 10,234
- -------------------------------------------------------------------------------------
Other 2,265 320 1,626
-------------- -------------- --------------
Total expenses 2,391,169 1,219,858 1,925,638
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,505,625 2,108,211 10,696,384
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) from:
Investments (including premiums on
written options exercised) 4,599,386 17,697,263 10,492,807
Closing of futures contracts 1,812,411 -- (492,615)
Closing and expiration of options
written -- -- 545,731
Foreign currency transactions -- (17,211) (99,835)
- -------------------------------------------------------------------------------------
Net change in unrealized
appreciation or depreciation:
Investments 41,274,621 26,205,799 27,829,357
Translation of assets and
liabilities denominated in foreign
currencies -- 49,835 (2,869,501)
-------------- -------------- --------------
Net realized and unrealized gain
(loss) 47,686,418 43,935,686 35,405,944
- -------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 49,192,043 $ 46,043,897 $ 46,102,328
-------------- -------------- --------------
-------------- -------------- --------------
* Interest $ -- $ -- $ --
** Dividends $ -- $ 8,365 $ 23,399
</TABLE>
()See accompanying Notes to Financial Statements.
107
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER OPPENHEIMER
GLOBAL STRATEGIC GROWTH &
SECURITIES BOND INCOME
FUND FUND FUND
<S> <C> <C> <C>
- --------------------------------------------------------------------------
INVESTMENT INCOME
Interest (net of withholding taxes
of *) $ 3,202,434 $6,125,519 $ 368,951
- --------------------------------------------------------------------------
Dividends (net of withholding taxes
of **) 6,247,266 153,440 311,958
------------ ----------- ----------
Total income 9,449,700 6,278,959 680,909
- --------------------------------------------------------------------------
EXPENSES
Management fees - see applicable
note 2,444,526 506,799 245,848
- --------------------------------------------------------------------------
Custodian fees and expenses 153,755 30,711 16,908
- --------------------------------------------------------------------------
Legal and auditing fees 10,170 4,070 5,999
- --------------------------------------------------------------------------
Insurance expenses 2,547 1,461 1,403
- --------------------------------------------------------------------------
Trustees' fees and expenses 2,554 444 1,136
- --------------------------------------------------------------------------
Registration and filing fees 41,796 10,086 11,161
- --------------------------------------------------------------------------
Other 973 1,462 334
------------ ----------- ----------
Total expenses 2,656,321 555,033 282,789
- --------------------------------------------------------------------------
NET INVESTMENT INCOME 6,793,379 5,723,926 398,120
- --------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) from:
Investments (including premiums on
written options exercised) 35,302,885 1,058,600 1,676,993
Closing of futures contracts -- 159,921 --
Closing and expiration of options
written -- 136,882 --
Foreign currency transactions 2,069,519 (276,229 ) (74,010 )
- --------------------------------------------------------------------------
Net change in appreciation or
depreciation:
Investments 76,037,237 (96,096 ) 7,054,814
Translation of assets and
liabilities denominated in foreign
currencies (15,473,959 ) (1,029,133 ) (5,486 )
------------ ----------- ----------
Net realized and unrealized gain
(loss) 97,935,682 (46,055 ) 8,652,311
- --------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $104,729,061 $5,677,871 $9,050,431
------------ ----------- ----------
------------ ----------- ----------
* Interest $ -- $ 27,107 $ --
** Dividends $ 93,208 $ -- $ 2,104
</TABLE>
()See accompanying Notes to Financial Statements.
108
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER
31, 1996
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER
MONEY HIGH INCOME
FUND FUND
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 3,442,944 $ 4,976,254 $ 9,359,939 $ 14,430,943
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 1,294 2,966 1,548,539 3,333,591
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation -- -- (1,194,861) 4,840,420
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 3,444,238 4,979,220 9,713,617 22,604,954
- ----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (3,445,930) (4,976,254) (9,228,407) (15,283,448)
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain -- -- (138,778) --
- ----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions - see applicable note 3,256,107 64,329,094 25,340,868 50,521,087
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 3,254,415 64,332,060 25,687,300 57,842,593
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 129,718,520 65,386,460 191,293,373 133,450,780
------------ ------------ ------------ ------------
End of period $132,972,935 $129,718,520 $216,980,673 $191,293,373
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income $ -- $ -- $ 1,045,478 $ 913,946
</TABLE>
<TABLE>
<CAPTION>
OPPENHEIMER
OPPENHEIMER CAPITAL
BOND APPRECIATION
FUND FUND
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 14,927,673 $ 19,901,086 $ 1,505,625 $ 1,496,337
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (137,428) 2,269,644 6,411,797 29,569,670
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (2,345,767) (4,742,040) 41,274,621 42,247,113
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 12,444,478 17,428,690 49,192,043 73,313,120
- ----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (13,689,894) (20,181,337) (1,547,409) (1,132,964)
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (1,447,022) (133,010) (30,466,763) (21,289,429)
- ----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions - see applicable note 19,263,290 218,092,832 127,936,490 241,097,454
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 16,570,852 215,207,175 145,114,361 291,988,181
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 426,438,945 211,231,770 617,392,272 325,404,091
------------ ------------ ------------ ------------
End of period $443,009,797 $426,438,945 $762,506,633 $617,392,272
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income $ 3,111,181 $ 1,873,402 $ 1,437,528 $ 1,479,312
</TABLE>
See accompanying Notes to Financial Statements.
109
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER
31, 1996 (CONTINUED)
<TABLE>
<CAPTION>
OPPENHEIMER
OPPENHEIMER MULTIPLE
GROWTH STRATEGIES
FUND FUND
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 2,108,211 $ 1,650,969 $ 10,696,384 $ 20,927,009
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 17,680,052 17,101,200 10,446,088 18,594,692
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 26,255,634 14,349,688 24,959,856 22,792,094
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 46,043,897 33,101,857 46,102,328 62,313,795
- ----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (1,639,463) (1,310,185) (9,950,251) (21,290,805)
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (17,220,011) (8,706,724) (18,354,350) (9,273,309)
- ----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions - see applicable note 69,278,320 145,125,312 62,429,125 71,272,635
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 96,462,743 168,210,260 80,226,852 103,022,316
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 285,920,150 117,709,890 484,285,480 381,263,164
------------ ------------ ------------ ------------
End of period $382,382,893 $285,920,150 $564,512,332 $484,285,480
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income $ 2,100,161 $ 1,631,413 $ 1,707,326 $ 961,193
</TABLE>
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER
GLOBAL STRATEGIC
SECURITIES BOND
FUND FUND
1997 1996 1997 1996
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 6,793,379 $ 5,075,730 $ 5,723,926 $ 7,004,776
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 37,372,404 11,775,734 1,079,174 1,835,670
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 60,563,278 59,143,734 (1,125,229) 1,164,352
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 104,729,061 75,995,198 5,677,871 10,004,798
- ----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (8,181,958) -- (5,621,283) (6,891,899)
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain -- -- (207,080) --
- ----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions - see applicable note 143,712,858 145,106,158 40,364,778 55,505,898
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 240,259,961 221,101,356 40,214,286 58,618,797
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 582,080,189 360,978,833 118,716,410 60,097,613
------------ ------------ ------------ ------------
End of period $822,340,150 $582,080,189 $158,930,696 $118,716,410
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income $ 6,335,664 $ 7,724,243 $ 853,732 $ 751,089
</TABLE>
See accompanying Notes to Financial Statements.
110
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER
31, 1996 (CONTINUED)
<TABLE>
<CAPTION>
OPPENHEIMER
GROWTH &
INCOME
FUND
1997 1996
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 398,120 $ 303,556
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 1,602,983 2,657,756
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 7,049,328 2,697,929
------------ ------------
Net increase in net assets resulting from operations 9,050,431 5,659,241
- -----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (366,781) (291,690)
- -----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (2,670,354) (31,219)
- -----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest transactions - see applicable note 37,431,472 37,384,461
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 43,444,768 42,720,793
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of period 47,009,244 4,288,451
------------ ------------
End of period $ 90,454,012 $ 47,009,244
------------ ------------
------------ ------------
Undistributed net investment income $ 43,982 $ 12,643
</TABLE>
See accompanying Notes to Financial Statements.
111
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Income from investment operations -
net investment income and net
realized gain .03 .05 .06 .04 .03 .04
Dividends and distributions to
shareholders (.03) (.05) (.06) (.04) (.03) (.04)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 2.55% 5.13% 5.62% 4.25% 3.09% 3.93%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $132,973 $ 129,719 $ 65,386 $ 89,671 $ 61,221 $ 58,266
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $136,148 $ 99,263 $ 75,136 $ 90,264 $ 57,654 $ 61,317
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.10%(2) 5.01% 5.52% 4.18% 3.12% 3.76%
Expenses 0.48%(2) 0.49% 0.51% 0.43% 0.43% 0.50%
</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.
2. Annualized.
See accompanying Notes to Financial Statements.
112
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 11.13 $ 10.63 $ 9.79 $ 11.02 $ 9.74 $ 9.40
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .50 .97 .98 .94 .82 1.19
Net realized and unrealized gain
(loss) .02 .58 .94 (1.27) 1.65 .43
- ------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .52 1.55 1.92 (.33) 2.47 1.62
- ------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.50) (1.05) (1.08) (.66) (1.19) (1.28)
Distributions from net realized
gain (.01) -- -- (.24) -- --
- ------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.51) (1.05) (1.08) (.90) (1.19) (1.28)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.14 $ 11.13 $ 10.63 $ 9.79 $ 11.02 $ 9.74
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 4.73% 15.26% 20.37% (3.18)% 26.34% 17.92%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $216,981 $ 191,293 $ 133,451 $ 95,698 $ 93,011 $ 40,817
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $201,563 $ 157,203 $ 115,600 $ 101,096 $ 67,000 $ 36,861
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 9.36%(2) 9.18% 9.81% 9.15% 10.50% 12.08%
Expenses 0.82%(2) 0.81% 0.81% 0.67% 0.68% 0.73%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 56.7% 125.0% 107.1% 110.1% 135.7% 144.2%
</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. Annualized.
3. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $161,345,854 and $120,496,034, respectively.
See accompanying Notes to Financial Statements.
113
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 11.63 $ 11.84 $ 10.78 $ 11.65 $ 10.99 $ 11.15
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .42 .69 .72 .76 .65 .87
Net realized and unrealized gain
(loss) (.09) (.15) 1.07 (.98) .76 (.17)
- ------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .33 .54 1.79 (.22) 1.41 .70
- ------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.37) (.74) (.73) (.62) (.75) (.86)
Distributions from net realized
gain (.04) (.01) -- (.03) -- --
- ------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.41) (.75) (.73) (.65) (.75) (.86)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.55 $ 11.63 $ 11.84 $ 10.78 $ 11.65 $ 10.99
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 2.89% 4.80% 17.00% (1.94)% 13.04% 6.50%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $442,995 $ 426,439 $ 211,232 $ 135,067 $ 111,846 $ 63,354
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $427,622 $ 296,253 $ 170,929 $ 121,884 $ 87,215 $ 45,687
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 7.04%(2) 6.72% 6.91% 7.30% 7.20% 7.81%
Expenses 0.76%(2) 0.78% 0.80% 0.57% 0.46% 0.56%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 65.0% 82.3% 79.4% 35.1% 36.3% 41.3%
</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. Annualized.
3. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $223,536,381 and $234,054,009, respectively.
See accompanying Notes to Financial Statements.
114
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 38.71 $ 34.21 $ 25.95 $ 31.64 $ 26.04 $ 23.24
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .07 .09 .11 .10 .05 .06
Net realized and unrealized gain
(loss) 2.12 6.59 8.29 (2.22) 6.71 3.43
- ------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations 2.19 6.68 8.40 (2.12) 6.76 3.49
- ------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.09) (.11) (.09) (.04) (.06) (.14)
Distributions from net realized
gain (1.77) (2.07) (.05) (3.53) (1.10) (.55)
- ------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (1.86) (2.18) (.14) (3.57) (1.16) (.69)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 39.04 $ 38.71 $ 34.21 $ 25.95 $ 31.64 $ 26.04
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 6.44% 20.22% 32.52% (7.59)% 27.32% 15.42%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $762,507 $ 617,392 $ 325,404 $ 185,774 $ 136,885 $ 83,335
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $651,675 $ 467,080 $ 240,730 $ 153,832 $ 98,228 $ 56,371
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.47%(2) 0.32% 0.47% 0.50% 0.23% 0.30%
Expenses 0.74%(2) 0.75% 0.78% 0.57% 0.47% 0.54%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 45.4% 100.1% 125.5% 96.5% 122.8% 78.9%
Average brokerage commission
rate(4) $ 0.0598 $ 0.0583 $ 0.0577 -- -- --
</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. Annualized.
3. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $356,882,852 and $239,693,270, respectively.
4. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
115
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 27.24 $ 23.55 $ 17.68 $ 17.70 $ 16.96 $ 15.17
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .15 .15 .25 .22 .46 .16
Net realized and unrealized gain
(loss) 3.68 5.46 6.10 (.05) .74 1.99
- ------------------------------------------------------------------------------------------------------
Total income from investment
operations 3.83 5.61 6.35 .17 1.20 2.15
- ------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.15) (.25) (.22) (.15) (.14) (.36)
Distributions from net realized
gain (1.52) (1.67) (.26) (.04) (.32) --
- ------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (1.67) (1.92) (.48) (.19) (.46) (.36)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.40 $ 27.24 $ 23.55 $ 17.68 $ 17.70 $ 16.96
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 14.81% 25.20% 36.65% 0.97% 7.25% 14.53%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $382,383 $ 285,920 $ 117,710 $ 63,283 $ 56,701 $ 36,494
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $326,963 $ 152,466 $ 88,803 $ 59,953 $ 46,389 $ 25,750
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.30%(2) 1.08% 1.46% 1.38% 1.13% 1.36%
Expenses, before voluntary
reimbursement by the Manager 0.75%(2) 0.81% 0.79% 0.58% 0.50% 0.61%
Expenses, net of voluntary
reimbursement by the Manager N/A 0.79% N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 34.4% 65.4% 58.2% 53.8% 12.6% 48.7%
Average brokerage commission
rate(4) $ 0.0620 $ 0.0589 $ 0.0590 -- -- --
</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. Annualized.
3. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $144,261,074 and $83,250,403, respectively.
4. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
116
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 15.63 $ 14.55 $ 12.91 $ 13.88 $ 12.47 $ 11.96
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .32 .72 .66 .63 .55 .55
Net realized and unrealized gain
(loss) 1.06 1.45 2.00 (.90) 1.41 .50
- ------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 1.38 2.17 2.66 (.27) 1.96 1.05
- ------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.30) (.74) (.65) (.60) (.55) (.54)
Distributions from net realized
gain (.58) (.35) (.37) (.10) -- --
- ------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.88) (1.09) (1.02) (.70) (.55) (.54)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.13 $ 15.63 $ 14.55 $ 12.91 $ 13.88 $ 12.47
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 9.15% 15.50% 21.36% (1.95)% 15.95% 8.99%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $564,512 $ 484,285 $ 381,263 $ 292,067 $ 250,290 $ 159,464
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $516,320 $ 428,277 $ 344,745 $ 279,949 $ 199,954 $ 139,011
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.18%(2) 4.89% 4.81% 4.90% 4.44% 4.63%
Expenses 0.75%(2) 0.77% 0.77% 0.56% 0.48% 0.55%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 21.8% 40.3% 39.0% 31.4% 32.4% 57.8%
Average brokerage commission
rate(4) $ 0.0295 $ 0.0361 $ 0.0329 -- -- --
</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. Annualized.
3. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $99,216,419 and $93,601,183, respectively.
4. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
117
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 17.67 $ 15.00 $ 15.09 $ 16.30 $ 9.57 $ 10.38
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) .15 .15 .12 .04 (.02) .07
Net realized and unrealized gain
(loss) 2.68 2.52 .19 (.96) 6.75 (.80)
- ------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations 2.83 2.67 .31 (.92) 6.73 (.73)
- ------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.23) -- -- (.04) -- (.04)
Distributions from net realized
gain -- -- (.40) (.25) -- (.04)
- ------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.23) -- (.40) (.29) -- (.08)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.27 $ 17.67 $ 15.00 $ 15.09 $ 16.30 $ 9.57
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 16.12% 17.80% 2.24% (5.72)% 70.32% (7.11)%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $822,340 $ 580,998 $ 360,979 $ 297,842 $ 96,425 $ 13,537
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $693,851 $ 466,750 $ 332,336 $ 214,545 $ 31,696 $ 11,181
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.97%(2) 1.09% 0.86% 0.54% 0.72% 1.04%
Expenses 0.77%(2) 0.81% 0.89% 0.91% 0.92% 1.06%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 26.4% 89.9% 131.3% 70.4% 65.1% 34.1%
Average brokerage commission
rate(4) $ 0.0045 $ 0.0045 $ 0.0092 -- -- --
</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. Annualized.
3. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $288,452,356 and $159,007,190, respectively.
4. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
118
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------
1997
(UNAUDITED) 1996 1995 1994 1993(1)
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 5.09 $ 4.91 $ 4.60 $ 5.12 $ 5.00
- ----------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .20 .38 .38 .35 .10
Net realized and unrealized gain
(loss) -- .19 .30 (.54) .11
- ----------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .20 .57 .68 (.19) .21
- ----------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.20) (.39) (.37) (.32) (.09)
Distributions in excess of net
realized gain (.01) -- -- (.01) --
- ----------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.21) (.39) (.37) (.33) (.09)
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.08 $ 5.09 $ 4.91 $ 4.60 $ 5.12
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
- ----------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 3.96% 12.07% 15.33% (3.78)% 4.25%
- ----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $158,931 $ 118,716 $ 60,098 $ 20,320 $ 9,887
- ----------------------------------------------------------------------------------------------
Average net assets (in thousands) $136,493 $ 82,604 $ 37,698 $ 15,389 $ 4,259
- ----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.46%(3) 8.48% 9.32% 8.36% 5.67%(3)
Expenses 0.82%(3) 0.85% 0.85% 0.87% 0.96%(3)
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 83.4% 144.3% 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. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $112,807,856 and $106,427,990, respectively.
See accompanying Notes to Financial Statements.
119
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX
MONTHS YEAR ENDED DECEMBER
ENDED 31,
JUNE 30, ---------------------
1997
(UNAUDITED) 1996 1995(1)
<S> <C> <C> <C>
- ----------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of
period $ 16.37 $ 12.51 $ 10.00
- ----------------------------------------------------------------------
Income from investment operations:
Net investment income .09 .14 .01
Net realized and unrealized gain 2.12 3.91 2.52
- ----------------------------------------------------------------------
Total income from investment
operations 2.21 4.05 2.53
- ----------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.09) (.14) (.02)
Distributions from net realized
gain (.72) (.05) --
- ----------------------------------------------------------------------
Total dividends and distributions
to shareholders (.81) (.19) (.02)
- ----------------------------------------------------------------------
Net asset value, end of period $ 17.77 $ 16.37 $ 12.51
--------- --------- ---------
--------- --------- ---------
- ----------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 13.87% 32.51% 25.25%
- ----------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $ 90,454 $ 47,009 $ 4,288
- ----------------------------------------------------------------------
Average net assets (in thousands) $ 66,341 $ 21,562 $ 1,809
- ----------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.21%(3) 1.41% 0.50%(3)
Expenses 0.86%(3) 1.00% 2.07%(3)
- ----------------------------------------------------------------------
Portfolio turnover rate(4) 39.6% 112.6% 23.7%
Average brokerage commission
rate(5) $ 0.0618 $ 0.0618 $ 0.0598
</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. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1997 were $10,024,416 and $1,868,625, respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
120
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
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 adviser is OppenheimerFunds,
Inc. (the Manager). Shares of the Oppenheimer Variable Account Funds are sold
only to separate accounts of insurance companies, principally MassMutual Life
Insurance Company, an affiliate of the Manager, Aetna Life Insurance & Annuity
Company, Merrill Lynch Insurance Group, Bankers Security Life Insurance Society,
Life Insurance Company of Virginia, Nationwide Life Insurance Company, Acacia
National Life Insurance Company, Jefferson-Pilot Life Insurance Company, CUNA
Mutual Life Insurance Company, and Protective Life Insurance Company. 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 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.
OPPENHEIMER BOND FUND seeks a high level of current income by investing
primarily in a diversified portfolio of high yield fixed-income securities.
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 high total investment return (which
includes current income as well as 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. Current
income is not an objective. In seeking this objective, the Fund will invest 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 to enhance such income by writing
covered call options on 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.
121
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
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 an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of 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. 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. 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 is used.
- --------------------------------------------------------------------------------
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities
that have been purchased by OHIF, OBF, OMSF, OSBF and OGIF 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. The Funds maintain, in segregated accounts with the custodian,
assets with a market value equal to the amount of their purchase commitments.
The purchase of securities on a when-issued or forward commitment basis may
increase the volatility of the Funds' net asset values to the extent the Funds
make such purchases while remaining substantially fully invested.
In connection with their ability to purchase securities on a when-issued or
forward commitment basis, OHIF, OBF and OSBF may enter into mortgage
"dollar-rolls" in which the Funds sell securities for delivery in the current
month and simultaneously contract with the same counterparty to repurchase
similar (same type, coupon and maturity) but not identical securities on a
specified future date. The Funds record each dollar-roll as a sale and a new
purchase transaction. As of June 30, 1997, OBF had entered into outstanding
when-issued or forward commitments for mortgage "dollar-rolls" of $160,372,702.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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 foreign 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.
122
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
- --------------------------------------------------------------------------------
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 its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Funds.
- --------------------------------------------------------------------------------
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, 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 at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF 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:
OPPENHEIMER MONEY FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Sold 177,388,085 $ 177,388,085 304,073,729 $ 304,073,729
Dividends and distributions
reinvested 3,446,642 3,446,642 4,923,661 4,923,661
Issued in connection with the
acquisition of:
Panorama Series Fund, Inc. -
Money Market Portfolio - Note 9 -- -- 63,968,818 63,968,791
Redeemed (177,578,620) (177,578,620) (308,637,087) (308,637,087)
------------ ------------- ------------ -------------
Net increase 3,256,107 $ 3,256,107 64,329,121 $ 64,329,094
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
123
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
OPPENHEIMER HIGH INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 5,832,186 $ 65,092,014 9,857,582 $107,788,590
Dividends and distributions
reinvested 844,500 9,367,185 1,412,713 15,283,448
Redeemed (4,384,245) (49,118,331) (6,635,862) (72,550,951)
---------- ------------ ---------- ------------
Net increase 2,292,441 $ 25,340,868 4,634,433 $ 50,521,087
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
OPPENHEIMER BOND FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 3,449,601 $ 39,906,129 10,037,878 $116,328,846
Dividends and distributions
reinvested 1,309,034 15,045,553 1,774,316 20,314,347
Issued in connection with the
acquisition of:
Panorama Series Fund, Inc. -
Income Portfolio - Note 9 -- -- 9,249,653 107,187,159
Panorama Series Fund, Inc. -
Government Securities Portfolio
- Note 9 -- -- 4,237 48,557
JP Investment Grade Bond Fund,
Inc. - Note 9 -- -- 2,594,896 30,151,368
Redeemed (3,083,324) (35,688,392) (4,827,959) (55,937,445)
---------- ------------ ---------- ------------
Net increase 1,675,311 $ 19,263,290 18,833,021 $218,092,832
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
OPPENHEIMER CAPITAL APPRECIATION FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 4,851,700 $176,153,127 12,247,492 $455,862,164
Dividends and distributions
reinvested 952,236 32,014,173 643,582 22,422,394
Redeemed (2,224,053) (80,230,810) (6,453,749) (237,187,104)
---------- ------------ ---------- ------------
Net increase 3,579,883 $127,936,490 6,437,325 $241,097,454
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
OPPENHEIMER GROWTH FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 4,973,284 $138,533,065 5,738,355 $144,756,556
Dividends and distributions
reinvested 720,274 18,842,365 430,280 10,016,909
Issued in connection with the
acquisition of JP Capital
Appreciation Fund, Inc. - Note 9 -- -- 3,293,050 90,009,399
Redeemed (3,182,009) (88,097,110) (3,964,366) (99,657,552)
---------- ------------ ---------- ------------
Net increase 2,511,549 $ 69,278,320 5,497,319 $145,125,312
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
124
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
OPPENHEIMER MULTIPLE STRATEGIES FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 3,075,888 $ 48,421,871 5,556,735 $ 83,206,142
Dividends and distributions
reinvested 1,850,934 28,304,601 2,062,453 30,564,114
Redeemed (920,459) (14,297,347) (2,838,629) (42,497,621)
---------- ------------ ---------- ------------
Net increase 4,006,363 $ 62,429,125 4,780,559 $ 71,272,635
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
OPPENHEIMER GLOBAL SECURITIES FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 9,979,046 $187,162,311 14,595,634 $237,535,239
Dividends and distributions
reinvested 446,370 8,181,957 -- --
Redeemed (2,804,345) (51,631,410) (5,717,318) (92,429,081)
---------- ------------ ---------- ------------
Net increase 7,621,071 $143,712,858 8,878,316 $145,106,158
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
OPPENHEIMER STRATEGIC BOND FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 8,589,506 $ 43,543,333 12,624,581 $ 63,274,177
Dividends and distributions
reinvested 1,154,948 5,828,363 1,387,256 6,891,899
Redeemed (1,776,354) (9,006,918) (2,946,444) (14,660,178)
---------- ------------ ---------- ------------
Net increase 7,968,100 $ 40,364,778 11,065,393 $ 55,505,898
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
OPPENHEIMER GROWTH & INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Sold 2,354,819 $ 39,714,921 2,942,183 $ 43,552,642
Dividends and distributions
reinvested 185,419 3,037,134 21,023 322,909
Redeemed (320,116) (5,320,583) (435,180) (6,491,090)
---------- ------------ ---------- ------------
Net increase 2,220,122 $ 37,431,472 2,528,026 $ 37,384,461
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
125
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At June 30, 1997, net unrealized appreciation or depreciation on investments and
options written consisted of the following:
<TABLE>
<CAPTION>
OPPENHEIMER
OPPENHEIMER CAPITAL
HIGH INCOME OPPENHEIMER APPRECIATION OPPENHEIMER
FUND BOND FUND FUND GROWTH FUND
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Gross appreciation $ 11,560,165 $ 5,961,635 $ 159,939,886 $89,826,432
Gross depreciation 2,193,240 3,227,991 13,442,805 6,515,299
-------------- -------------- -------------- ------------
Net unrealized appreciation $ 9,366,925 $ 2,733,644 $ 146,497,081 $83,311,133
-------------- -------------- -------------- ------------
-------------- -------------- -------------- ------------
</TABLE>
<TABLE>
<CAPTION>
OPPENHEIMER OPPENHEIMER
MULTIPLE GLOBAL OPPENHEIMER OPPENHEIMER
STRATEGIES SECURITIES STRATEGIC GROWTH &
FUND FUND BOND FUND INCOME FUND
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Gross appreciation $100,348,980 $155,318,577 $ 4,095,591 $ 11,798,429
Gross depreciation 10,447,804 12,773,686 2,286,858 1,546,200
------------- ------------- ------------- -------------
Net unrealized appreciation $ 89,901,176 $142,544,891 $ 1,808,733 $ 10,252,229
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Trust. For OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF
and OGIF, the annual fees are 0.75% of the first $200 million of average annual
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 average annual net assets over of
$800 million. In addition, management fees for OHIF, OBF and OSBF are 0.50% of
average annual net assets in excess of $1 billion. Management fees for OMF are
0.45% of the first $500 million of average annual net assets, 0.425% of the next
$500 million, 0.40% of the next $500 million and 0.375% 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. The Manager has agreed to
reimburse OGF for SEC fees incurred in connection with the acquisition of JP
Capital Appreciation Fund, Inc.
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
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.
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.
126
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS (CONTINUED)
At June 30, 1997, outstanding forward contracts to purchase and sell foreign
currencies were as follows:
OPPENHEIMER BOND FUND
<TABLE>
<CAPTION>
CONTRACT VALUATION
EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED
CONTRACTS TO PURCHASE DATES (000'S) JUNE 30, 1997 APPRECIATION DEPRECIATION
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Portugese Escudo (PTE) 6/2/98 164,816 PTE $ 942,050 $ 874 $ --
--------------- ------------ ------------
---------------
<CAPTION>
CONTRACTS TO SELL
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Canadian Dollar (CAD) 7/28/97 415 CAD $ 301,200 $ -- $ 120
Deutsche Mark (DEM) 7/16/97-6/2/98 2,768 DEM 1,611,433 16,314 --
Norwegian Krone (NOK) 7/7/97 1,423 NOK 194,380 -- 178
New Zealand Dollar (NZD) 9/22/97 725 NZD 491,550 6,380 --
Polish Zloty (PLZ) 7/1/97 10,577 PLZ 3,218,562 38,763 --
--------------- ------------ ------------
$ 5,817,125 61,457 298
--------------- ------------ ------------
---------------
Total Unrealized Appreciation and Depreciation $ 62,331 $ 298
------------ ------------
------------ ------------
</TABLE>
OPPENHEIMER GLOBAL SECURITIES FUND
<TABLE>
<CAPTION>
CONTRACT VALUATION
EXPIRATION AMOUNT AS OF UNREALIZED
CONTRACTS TO SELL DATES (000'S) JUNE 30, 1997 APPRECIATION
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Austrian Schilling (ATS) 7/7/97 172 ATS $ 14,058 $ 152
French Franc (FRF) 9/22/97 228,832 FRF 39,021,868 978,132
--------------- ------------
Total Unrealized Appreciation $39,035,926 $978,284
--------------- ------------
--------------- ------------
</TABLE>
OPPENHEIMER STRATEGIC BOND FUND
<TABLE>
<CAPTION>
CONTRACT VALUATION
EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED
CONTRACTS TO PURCHASE DATES (000'S) JUNE 30, 1997 APPRECIATION DEPRECIATION
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Deutsche Mark (DEM) 7/16/97-7/18/97 3,465 DEM $ 1,989,735 $ 10,842 $ --
South African Rand (ZAR) 7/10/97 1,036 ZAR 227,744 -- 1,210
Spanish Peseta (ESP) 7/1/97 143,224 ESP 973,851 -- 9,697
--------------- ------------ ------------
$ 3,191,330 10,842 10,907
--------------- ------------ ------------
---------------
<CAPTION>
CONTRACTS TO SELL
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
French Franc (FRF) 7/29/97 1,960 FRF $ 333,658 $ 6,213 $ --
Deutsche Mark (DEM) 7/17/97 3,478 DEM 1,997,201 7,029 --
Irish Punt (IEP) 7/7/97-11/28/97 2,560 IEP 3,871,778 12,920 7,106
Japanese Yen (JPY) 9/11/97 160,000 JPY 1,412,091 26,305 --
New Zealand Dollar (NZD) 7/15/97 3,645 NZD 2,472,640 31,160 --
Swiss Franc (CHF) 7/7/97-9/29/97 9,642 CHF 6,630,537 103,997 25,326
--------------- ------------ ------------
$16,717,905 187,624 32,432
--------------- ------------ ------------
---------------
Total Unrealized Appreciation and Depreciation $198,466 $43,339
------------ ------------
------------ ------------
</TABLE>
127
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
The Funds (except OMF) may buy and sell interest rate futures contracts in order
to gain exposure to or protect against changes in interest rates. The Funds may
also buy or write put or call options on these futures contracts.
The Funds generally sell futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Funds may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Funds are required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Funds each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Funds recognize a realized gain or loss when the contract is closed
or expires.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statements of Investments. The
Statements of Assets and Liabilities reflect a receivable or payable for the
daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At June 30, 1997, outstanding futures contracts were as follows:
OPPENHEIMER HIGH INCOME FUND
<TABLE>
<CAPTION>
VALUATION AS UNREALIZED
EXPIRATION NUMBER OF FUTURES OF JUNE 30, APPRECIATION
CONTRACTS TO PURCHASE DATE CONTRACTS 1997 (DEPRECIATION)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 10 yr. 9/97 20 $ 2,157,500 $ 1,563
U.S. Treasury Bonds, 30 yr. 9/97 110 12,216,875 (7,813)
------------- -------------
$14,374,375 (6,250)
------------- -------------
-------------
<CAPTION>
CONTRACTS TO SELL
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Standard & Poor's 9/97 5 $ 2,225,625 $ 18,800
------------- -------------
-------------
$ 12,550
-------------
-------------
</TABLE>
OPPENHEIMER BOND FUND
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION NUMBER OF FUTURES VALUATION AS OF APPRECIATION
CONTRACTS TO PURCHASE DATE CONTRACTS JUNE 30, 1997 (DEPRECIATION)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 5 yr. 9/97 144 $15,248,250 $ 42,000
U.S. Treasury Bonds, 10 yr. 9/97 58 6,256,750 (1,438)
U.S. Treasury Bonds, 30 yr. 9/97 180 19,991,250 (17,500)
--------------- --------------
$41,496,250 $ 23,062
--------------- --------------
--------------- --------------
</TABLE>
128
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS (CONTINUED)
OPPENHEIMER MULTIPLE STRATEGIES FUND
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF FUTURES VALUATION AS OF UNREALIZED
CONTRACTS TO PURCHASE DATE CONTRACTS JUNE 30, 1997 APPRECIATION
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Russell 2000 9/97 19 $ 3,789,550 $ 18,050
--------------- --------------
--------------- --------------
</TABLE>
OPPENHEIMER STRATEGIC BOND FUND
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION NUMBER OF FUTURES VALUATION AS OF APPRECIATION
CONTRACTS TO PURCHASE DATE CONTRACTS JUNE 30, 1997 (DEPRECIATION)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 30 yr. 9/97 5 $ 555,313 $ 6,406
--------------- --------------
---------------
<CAPTION>
CONTRACTS TO SELL
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 10 yr. 9/97 75 $ 8,090,625 $(65,625)
U.S. Treasury Nts., 5 yr. 9/97 6 635,344 (3,469)
French Government Bonds, 10
yr. 9/97 16 1,760,810 (11,174)
German Government Bonds, 10
yr. 9/97 5 728,035 (15,136)
Standard & Poor's 500 9/97 1 445,125 5,025
--------------- --------------
$11,659,939 (90,379)
--------------- --------------
---------------
$(83,973)
--------------
--------------
</TABLE>
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Funds (except OMF) may buy and sell put and call options, or write put and
covered 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 Statements of Investments. Options written are reported as a
liability in the Statements of Assets and Liabilities. Gains and losses are
reported in the Statements 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.
129
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY (CONTINUED)
OHIF option activity for the six months ended June 30, 1997 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
------------------------ -----------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
OPTIONS PREMIUMS OPTIONS PREMIUMS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
Options outstanding at
December 31, 1996 2,460,530 $ 42,285 -- $ --
Options written 129,562,612 391,657 4,341,125 35,421
Options closed or expired (129,568,582) (409,417) (4,341,125) (35,421)
Options exercised (382,000) (2,855) -- --
------------ ---------- ------------ ---------
Options outstanding at June
30, 1997 2,072,560 $ 21,670 -- $ --
------------ ---------- ------------ ---------
------------ ---------- ------------ ---------
</TABLE>
OBF option activity for the six months ended June 30, 1997 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
------------------------ -----------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
OPTIONS PREMIUMS OPTIONS PREMIUMS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
Options outstanding at
December 31, 1996 6,199,750 $ 80,185 -- $ --
Options written 112,223,092 826,879 8,341,000 51,353
Options closed or expired (116,764,862) (730,928) (690,170) (4,144)
Options exercised (660,000) (4,932) (7,650,000) (41,851)
------------ ---------- ------------ ---------
Options outstanding at June
30, 1997 997,980 $ 171,204 830 $ 5,358
------------ ---------- ------------ ---------
------------ ---------- ------------ ---------
</TABLE>
OMSF option activity for the six months ended June 30, 1997 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
------------------------
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
Options outstanding at
December 31, 1996 4,569 $1,235,136
Options written 6,703 1,601,570
Options closed or expired (3,449) (762,605)
Options exercised (1,266) (409,411)
------------ ----------
Options outstanding at June
30, 1997 6,557 $1,664,690
------------ ----------
------------ ----------
</TABLE>
OSBF option activity for the six months ended June 30, 1997 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
------------------------ -----------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
OPTIONS PREMIUMS OPTIONS PREMIUMS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
Options outstanding at
December 31, 1996 9,375,291 $ 111,246 375 $ 8,992
Options written 4,841,825 59,857 428,005,000 38,914
Options closed or expired (12,046,716) (147,411) (228,005,000) (29,643)
Options exercised (1,155,000) (12,582) -- --
------------ ---------- ------------ ---------
Options outstanding at June
30, 1997 1,015,400 $ 11,110 200,000,375 $ 18,263
------------ ---------- ------------ ---------
------------ ---------- ------------ ---------
</TABLE>
130
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY (CONTINUED)
OGIF option activity for the six months ended June 30, 1997 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS
------------------------
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
Options outstanding at
December 31, 1996 -- $ --
Options written 25 3,437
------------ ----------
Options outstanding at June
30, 1997 25 $ 3,437
------------ ----------
------------ ----------
</TABLE>
- --------------------------------------------------------------------------------
8. ILLIQUID AND RESTRICTED SECURITIES
At June 30, 1997, investments in securities included issues that are illiquid or
restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily-available market or if its valuation has not
changed for a certain period of time. The Funds intend to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid and restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid and restricted securities
subject to this 10% limitation at June 30, 1997 are shown below:
<TABLE>
<CAPTION>
PERCENTAGE TO
AMOUNT NET ASSETS
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund $22,097,832 10.18%
- ------------------------------------------------------------------------------------------------------
Oppenheimer Bond Fund 19,332,509 4.36
- ------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund 1,188,000 0.16
- ------------------------------------------------------------------------------------------------------
Oppenheimer Multiple Strategies Fund 5,268,730 0.93
- ------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund 6,831,794 0.83
- ------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund 5,567,717 3.50
- ------------------------------------------------------------------------------------------------------
Oppenheimer Growth & Income Fund 993,750 1.10
</TABLE>
Information concerning restricted securities is as follows:
OPPENHEIMER HIGH INCOME FUND
The aggregate value of restricted securities is $2,741,669.
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS
ACQUISITION COST PER OF
SECURITY DATE UNIT JUNE 30, 1997
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
BONDS
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 4/14/92 100.00% 110.38%
STOCKS AND WARRANTS
CGA Group Ltd., Preferred 6/17/97 $ 25.00 $ 15.79
- ------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 .00 .50
- ------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I. 4/14/92 1,000.00 1,003.75
- ------------------------------------------------------------------------------------------------------
Omnipoint Corp. 1/26/96 16.00 15.79
- ------------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 12/49 11/29/95 .00 15.79
- ------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. 5/2/94 9.50 1.00
</TABLE>
131
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
8. ILLIQUID AND RESTRICTED SECURITIES (CONTINUED)
OPPENHEIMER BOND FUND
The aggregate value of restricted securities is $1,177,600.
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS
ACQUISITION COST PER OF
SECURITY DATE UNIT JUNE 30, 1997
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
BONDS:
Merrill Lynch & Co., Inc., Units, 9.75%, 6/15/99 5/15/95 110.05% 117.76%
</TABLE>
OPPENHEIMER STRATEGIC BOND FUND
The aggregate value of restricted securities is $495,255.
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS
ACQUISITION COST PER OF
SECURITY DATE UNIT JUNE 30, 1997
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
BONDS
Transpower Finance Ltd. Gtd. Unsec. Unsub. Bonds, 8%,
2/15/01 5/17/96 66.49% 69.80%
STOCKS AND WARRANTS
CGA Group Ltd. Preferred 6/17/97 $ 25.00 $ 25.00
- ------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 .00 .50
</TABLE>
- --------------------------------------------------------------------------------
9. ACQUISITIONS
On June 3, 1996, OMF acquired a portion of the net assets of Panorama Series
Fund, Inc. - Money Market Portfolio. The Fund issued 49,302,270 shares of
beneficial interest, valued at $49,302,270, in exchange for the net assets,
resulting in combined net assets of $113,051,628 on June 3, 1996.
On December 2, 1996, OMF acquired the remaining net assets of Panorama Series
Fund, Inc. - Money Market Portfolio. The Fund issued 14,666,548 shares of
beneficial interest, valued at $14,666,521, in exchange for the net assets,
resulting in combined net assets of $124,845,270 on December 2, 1996.
On May 1, June 3 and December 2, 1996, OBF acquired all of the net assets of
Panorama Series Fund, Inc. - Income Portfolio. The Fund issued 12,999, 6,743,062
and 2,493,592 shares of beneficial interest, respectively, valued at $148,965,
$77,208,064 and $29,830,130, respectively, in exchange for the net assets,
resulting in combined net assets of $227,552,225, $308,666,225 and $396,656,585.
On May 1, 1996, OBF acquired a portion of the net assets of Panorama Series
Fund, Inc. - Government Securities Portfolio. The Fund issued 4,237 shares of
beneficial interest valued at $48,557, in exchange for the net assets, resulting
in combined net assets of $227,552,225 on May 1, 1996.
On December 20, 1996, OBF acquired all of the net assets of JP Investment Grade
Bond Fund, Inc., pursuant to an agreement and plan of reorganization approved by
the JP Investment Grade Bond Fund, Inc. shareholders on December 3, 1996. The
Fund issued 2,594,896 shares of beneficial interest valued at $30,151,368, in
exchange for the net assets, resulting in combined net assets of $426,447,902 on
December 20, 1996. The net assets acquired included net unrealized appreciation
of $1,017,069. The exchange qualifies as a tax-free reorganization for federal
income tax purposes.
On December 20, 1996, OGF acquired all of the net assets of JP Capital
Appreciation Fund, Inc., pursuant to an agreement and plan of reorganization
approved by the JP Capital Appreciation Fund, Inc. shareholders on December 3,
1996. The Fund issued 3,293,050 shares of beneficial interest, valued at
$90,009,399, in exchange for the net assets, resulting in combined net assets of
$289,484,969 on December 20, 1996. The net assets acquired included net
unrealized appreciation of $19,087,888. The exchange qualifies as a tax-free
reorganization for federal income tax purposes.
132
<PAGE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------
OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Vice President, Treasurer and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Paul LaRocco, Vice President
Robert J. Milnamow, Vice President
David P. Negri, Vice President
Jane Putnam, Vice President
Richard H. Rubinstein, Vice President
Arthur P. Steinmetz, Vice President
Dorothy G. Warmack, Vice President
William Wilby, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
- ------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER OppenheimerFunds, Inc.
- ------------------------------------------------------------------------------------------------------
TRANSFER AGENT OppenheimerFunds Services
- ------------------------------------------------------------------------------------------------------
CUSTODIAN OF PORTFOLIO The Bank of New York
SECURITIES
- ------------------------------------------------------------------------------------------------------
INDEPENDENT AUDITORS Deloitte & Touche LLP
- ------------------------------------------------------------------------------------------------------
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been taken from the records
of the Funds without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Variable Account
Funds. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Variable Account Funds. For material information concerning the
Funds, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of the
principal amount invested.
</TABLE>
133
