-------------------------------
Semiannual Report June 30, 1999
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O P P E N H E I M E R
Multiple Strategies Fund/VA
A Series of Oppenheimer Variable Account Funds
[Graphic of Monthly Budget]
[OppenheimerFunds(R) Logo]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
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Oppenheimer Variable Account Funds--Oppenheimer Multiple Strategies Fund/VA
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Objective
Oppenheimer Multiple Strategies Fund/VA, a series of Oppenheimer Variable
Account Funds, seeks a total investment return, which includes current income
and capital appreciation, from investments in common stocks and other equity
securities, bonds and other debt securities and money market securities.
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Narrative by Richard Rubinstein, Co-Portfolio Manager
The Fund's performance during the six-month period that ended June 30, 1999, was
strong, reflecting a change in market psychology during the last quarter.
Performance improved as the stock market began to demonstrate broad-based
strength and several emerging market economies showed signs of stabilization. As
a result, for the six-month reporting period, the Fund provided a cumulative
total return of 8.47%.(1)
Until recently, the U.S. stock market's performance had been dominated
by stocks with the largest capitalizations, which continue to sell at
historically high prices relative to earnings. Most stocks in the broader
market, however, have been selling at relatively low prices relative to
earnings. We took advantage of last year's sharp market declines to upgrade our
stock portfolio. We focused on technology companies, financial services firms
and healthcare companies that, in our opinion, lead their markets. We
established these positions with the expectation that the investment environment
would be better in the future. In fact, some of these holdings quickly retraced
their declines and produced excellent returns. We have since sold some of these
holdings, redeploying assets to more attractively valued stocks.
In the U.S. stock market, one area that has not worked well is
manufacturing and industrial companies. This sector has been adversely affected
by the recession in Asia. With recession in Asia, demand has failed to
materialize, and much of the new capacity remains unutilized in the chemical,
steel, and paper industries, among others. This has created enormous pressure on
U.S. manufacturers, who have had to reduce prices to compete with overseas
producers.
However, we were seeing the beginning of an economic recovery in Asia
and conditions remain strong in the United States and Europe. As such,
manufacturing and industrial companies should benefit. Therefore, during the
period, we acquired stock in several manufacturing and industrial companies that
we believe are fundamentally sound and represent attractive values. These
include dominant companies in the industrial gases, cement and farm machinery
businesses.
Bond diversification worked for the portfolio. Treasury prices declined
as yields increased, reflecting strong U.S. economic growth. The decline in the
U.S. Treasury portion of the portfolio was offset by better performance in high
yield bonds and emerging market debts. This reflected a reversal of the trend of
the previous six months when demand for Treasuries had forced prices to
unprecedented highs compared to other bonds.
Though the period has been difficult, the Fund's diversified approach
has helped to reduce volatility. Nevertheless, we sense that many investors are
frustrated that the multi-sector approach has lagged the performance of large,
U.S. growth stocks. In our view, when the marketplace is highly stratified, as
it has been over the past several years, that is exactly when you need
diversification the most. That's why we believe maintaining a disciplined,
diversified approach under a variety of market conditions is part of what makes
Oppenheimer Multiple Strategies Fund/VA part of The Right Way to Invest.
Because the stock market can be volatile, the Fund's performance may be subject
to substantial short-term changes. For updates on the Fund's performance, please
contact your financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
1. Includes changes in net asset value per share and does not include the
charges associated with the separate account products, which offer this Fund.
Such performance is not annualized and would have been lower if such charges
were taken into account.
2 Oppenheimer Multiple Strategies Fund/VA
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Statement of Investments June 30, 1999 (Unaudited)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
<S> <C> <C>
================================================================================================================================
Common Stocks--49.0%
================================================================================================================================
Basic Materials--2.0%
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Chemicals--1.1%
Bayer AG, Sponsored ADR 34,000 $ 1,414,798
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Du Pont (E.I.) De Nemours & Co.(1) 27,000 1,844,437
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Goodrich (B.F.) Co. 19,300 820,250
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Potash Corp. of Saskatchewan, Inc.(1) 29,500 1,526,625
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Praxair, Inc. 23,000 1,125,562
-----------
6,731,672
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Metals--0.3%
De Beers Consolidated Mines Ltd., ADR 80,000 1,910,000
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Paper--0.6%
MacMillan Bloedel Ltd. 130,883 2,330,172
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Wausau-Mosinee Paper Corp. 84,000 1,512,000
-----------
3,842,172
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Capital Goods--1.4%
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Electrical Equipment--0.2%
Honeywell, Inc. 10,500 1,216,687
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Industrial Services--0.3%
Service Corp. International 100,000 1,925,000
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Manufacturing--0.9%
Deere & Co. 18,000 713,250
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Hexcel Corp.(2) 140,000 1,417,500
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Pall Corp. 115,000 2,551,562
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Tenneco, Inc. 43,000 1,026,625
-----------
5,708,937
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Communication Services--2.0%
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Telecommunications: Long Distance--1.2%
AT&T Corp. 20,000 1,116,250
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MCI WorldCom, Inc.(2) 49,195 4,233,845
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Qwest Communications International, Inc.(1)(2) 50,000 1,653,125
-----------
7,003,220
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Telephone Utilities--0.7%
GTE Corp. 15,000 1,136,250
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SBC Communications, Inc. 44,000 2,552,000
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Tele Norte Leste Participacoes SA 26,250,000 238,374
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Telesp Participacoes SA 19,200,000 243,662
-----------
4,170,286
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Telecommunications: Wireless--0.1%
Intermedia Communications, Inc.(2) 2,630 78,900
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Telesp Celular Participacoes SA 49,150,000 255,044
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333,944
</TABLE>
Oppenheimer Multiple Strategies Fund/VA 3
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Statement of Investments (Unaudited)(Continued)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
<S> <C> <C>
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Consumer Cyclicals--7.1%
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Autos & Housing--1.9%
Dana Corp. 41,500 $ 1,911,594
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IRSA Inversiones y Representaciones SA 288,877 889,854
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Lear Corp.(2) 55,000 2,736,250
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Owens Corning 68,000 2,337,500
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Southdown, Inc. 17,500 1,124,375
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Toll Brothers, Inc.(2) 61,000 1,307,687
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Wolverine Tube, Inc.(2) 48,000 1,206,000
-----------
11,513,260
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Consumer Services--0.3%
Alterra Healthcare Corp.(2) 115,000 1,581,250
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Intermedia Communications, Inc.(2)(3) 201 4,824
-----------
1,586,074
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Leisure & Entertainment--2.5%
Berjaya Sports Toto Berhad(3) 410,000 949,474
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Brunswick Corp. 56,000 1,561,000
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Callaway Golf Co. 137,000 2,003,625
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Host Marriott Corp. 125,000 1,484,375
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International Game Technology 192,500 3,561,257
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Mirage Resorts, Inc.(2) 55,000 921,250
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Nintendo Co. Ltd. 16,000 2,248,584
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Shimano, Inc. 100,000 2,367,061
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15,096,626
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Media--0.2%
South China Morning Post Holdings Ltd. 2,258,000 1,265,987
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Retail: General--1.0%
Federated Department Stores, Inc.(1)(2) 42,500 2,249,844
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Neiman Marcus Group, Inc.(2) 79,000 2,029,312
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Saks, Inc.(2) 63,000 1,819,125
-----------
6,098,281
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Retail: Specialty--0.8%
AutoZone, Inc.(2) 43,000 1,295,375
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Barnes & Noble, Inc.(2) 27,000 739,125
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Borders Group, Inc.(2) 63,000 996,187
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General Nutrition Cos., Inc.(2) 86,000 2,004,875
-----------
5,035,562
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Textile/Apparel & Home Furnishings--0.4%
Jones Apparel Group, Inc.(1)(2) 77,000 2,642,062
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Consumer Staples--5.2%
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Beverages--0.4%
Diageo plc 125,800 1,313,728
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Whitman Corp. 62,000 1,116,000
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2,429,728
</TABLE>
4 Oppenheimer Multiple Strategies Fund/VA
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Statement of Investments (Unaudited)(Continued)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
<S> <C> <C>
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Broadcasting--2.1%
CBS Corp.(1)(2) 110,000 $ 4,778,125
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MediaOne Group, Inc.(2) 35,000 2,603,125
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RCN Corp.(1)(2) 120,000 4,995,000
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12,376,250
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Entertainment--0.9%
CBRL Group, Inc. 79,500 1,376,344
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Luby's, Inc. 90,000 1,350,000
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Time Warner, Inc. 36,000 2,646,000
-----------
5,372,344
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Food--0.4%
Groupe Danone 7,500 1,933,638
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Nestle SA, Sponsored ADR 6,000 540,529
-----------
2,474,167
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Food & Drug Retailers--0.1%
Cia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR 14,000 261,625
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Household Goods--0.7%
Fort James Corp. 45,000 1,704,375
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Rexall Sundown, Inc.(2) 96,000 1,170,000
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Wella AG 2,150 1,390,208
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Wella AG, Preference 200 142,316
-----------
4,406,899
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Tobacco--0.6%
Philip Morris Cos., Inc. 95,000 3,817,812
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Energy--2.5%
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Energy Services--1.0%
Input/Output, Inc.(2) 193,000 1,459,562
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Santa Fe International Corp. 87,000 2,001,000
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Schlumberger Ltd.(1) 22,500 1,432,969
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Transocean Offshore, Inc. 39,000 1,023,750
-----------
5,917,281
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Oil: Domestic--0.8%
Comstock Resources, Inc.(2) 175,000 579,687
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Kerr-McGee Corp. 35,000 1,756,562
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Unocal Corp. 65,000 2,575,625
-----------
4,911,874
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Oil: International--0.7%
Petroleo Brasileiro SA, Preference 3,330,000 512,756
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Talisman Energy, Inc.(2) 95,510 2,584,494
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Total Fina SA, Sponsored ADR(2) 16,000 1,031,000
-----------
4,128,250
</TABLE>
Oppenheimer Multiple Strategies Fund/VA 5
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Statement of Investments (Unaudited)(Continued)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
<S> <C> <C>
================================================================================================================================
Financial--11.0%
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Banks--6.7%
ABN Amro Holding NV 62,700 $ 1,357,878
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Banco Frances del Rio de la Plata SA 95,000 631,830
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Bank of America Corp. 167,500 12,279,844
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Bank One Corp. 38,000 2,263,375
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Chase Manhattan Corp.(1) 140,500 12,170,813
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Credito Italiano SpA 414,000 1,818,795
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J.P. Morgan & Co., Inc.(1) 13,000 1,826,500
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Societe Generale 24,000 4,229,871
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UBS AG 4,175 1,246,117
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Wells Fargo Co. 70,000 2,992,500
-----------
40,817,523
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Diversified Financial--1.2%
American Express Co.(1) 10,000 1,301,250
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ICICI Ltd., GDR(4) 35,500 368,313
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Merrill Lynch & Co., Inc. 26,000 2,078,375
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Morgan Stanley Dean Witter & Co.(1) 25,000 2,562,500
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Simon Property Group, Inc. 37,500 951,563
-----------
7,262,001
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Insurance--0.6%
ACE Ltd. 55,000 1,553,750
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Skandia Forsakrings AB 115,000 2,150,735
-----------
3,704,485
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Real Estate Investment Trusts--2.5%
Archstone Communities Trust 52,000 1,140,750
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Avalonbay Communities, Inc. 30,732 1,137,084
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Brandywine Realty Trust 56,000 1,109,500
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Camden Property Trust 40,000 1,110,000
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CarrAmerica Realty Corp. 48,000 1,200,000
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Chastain Capital Corp. 134,000 887,750
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Chelsea GCA Realty, Inc. 32,000 1,188,000
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Cornerstone Properties, Inc. 68,000 1,079,500
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Developers Diversified Realty Corp. 62,000 1,030,750
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JDN Realty Corp. 60,000 1,342,500
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Manufactured Home Communities, Inc. 44,000 1,144,000
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Post Properties, Inc. 28,000 1,148,000
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Shurgard Storage Centers, Inc. 44,000 1,193,500
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Sunstone Hotel Investors, Inc. 80,000 680,000
-----------
15,391,334
</TABLE>
6 Oppenheimer Multiple Strategies Fund/VA
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Statement of Investments (Unaudited)(Continued)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
<S> <C> <C>
================================================================================================================================
Healthcare--4.2%
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Healthcare/Drugs--3.2%
Abbott Laboratories 38,000 $ 1,729,000
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American Home Products Corp. 48,500 2,788,750
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AstraZeneca Group plc 60,540 2,357,015
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Centocor, Inc.(2) 75,000 3,496,875
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Merck & Co., Inc. 20,000 1,480,000
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Mylan Laboratories, Inc. 105,000 2,782,500
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Novartis AG 1,700 2,482,328
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Pliva d.d., Sponsored GDR(4) 20,000 301,000
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SmithKline Beecham plc, Cl. A, Sponsored ADR 30,000 1,981,875
-----------
19,399,343
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Healthcare/Supplies & Services--1.0%
Acuson Corp.(2) 125,000 2,148,438
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HCR Manor Care, Inc.(2) 50,000 1,209,375
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Innovasive Devices, Inc.(2) 110,000 357,500
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United Healthcare Corp. 32,800 2,054,100
-----------
5,769,413
================================================================================================================================
Technology--11.7%
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Computer Hardware--4.1%
3Com Corp.(2) 63,000 1,681,313
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Canon, Inc. 50,000 1,437,587
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Cognex Corp.(2) 70,000 2,209,375
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Compaq Computer Corp. 22,500 532,969
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Hewlett-Packard Co.(1) 36,000 3,618,000
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International Business Machines Corp.(1) 118,000 15,251,500
-----------
24,730,744
- --------------------------------------------------------------------------------------------------------------------------------
Computer Services--0.3%
First Data Corp.(1) 35,000 1,712,813
- --------------------------------------------------------------------------------------------------------------------------------
Computer Software--2.3%
Computer Associates International, Inc. 53,999 2,969,973
- --------------------------------------------------------------------------------------------------------------------------------
Compuware Corp.(2) 49,100 1,561,994
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Electronic Arts, Inc.(1)(2) 25,000 1,356,250
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Novell, Inc.(1)(2) 126,000 3,339,000
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Peoplesoft, Inc.(2) 51,000 879,750
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Rational Software Corp.(1)(2) 44,000 1,449,250
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Sabre Group Holdings, Inc.(1)(2) 34,500 2,371,875
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Structural Dynamics Research Corp.(2) 167 3,100
-----------
13,931,192
</TABLE>
Oppenheimer Multiple Strategies Fund/VA 7
<PAGE>
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Statement of Investments (Unaudited)(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares Note 1
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Communications Equipment--0.4%
Cisco Systems, Inc.(1)(2) 41,000 $ 2,641,938
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Electronics--4.1%
Analog Devices, Inc.(1)(2) 84,000 4,215,750
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ASM Lithography Holding NV(1)(2) 23,400 1,389,375
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Coherent, Inc.(2) 70,000 1,303,750
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General Motors Corp., Cl. H(2) 30,200 1,698,750
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Intel Corp.(1) 156,000 9,282,000
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Keyence Corp. 8,000 1,399,912
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Methode Electronics, Inc., Cl. A 104,000 2,379,000
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STMicroelectronics NV, NY Shares 26,400 1,831,500
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Teradyne, Inc.(2) 14,000 1,004,500
------------
24,504,537
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Photography--0.5%
Xerox Corp.(1) 48,000 2,835,000
================================================================================================================================
Transportation--0.9%
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Air Transportation--0.4%
Alaska Air Group, Inc.(1)(2) 29,500 1,231,625
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AMR Corp.(2) 16,000 1,092,000
------------
2,323,625
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Railroads & Truckers--0.3%
Burlington Northern Santa Fe Corp. 67,000 2,077,000
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Shipping--0.2%
Stolt-Nielsen SA 73,000 1,113,250
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Stolt-Nielsen SA, Sponsored ADR 17,650 302,256
------------
1,415,506
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Utilities--1.0%
- --------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--1.0%
Allegheny Energy, Inc. 50,500 1,619,156
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Reliant Energy, Inc. 80,000 2,210,000
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Southern Co. 90,000 2,385,000
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6,214,156
------------
Total Common Stocks (Cost $197,582,459) 296,906,610
================================================================================================================================
Preferred Stocks--0.7%
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Budget Group, Inc., 6.25% Cum. Cv., Non-Vtg.(2)(4) 20,000 695,000
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ICG Communications, Inc., 6.75% Cum. Cv., Non-Vtg.(2) 45,000 2,368,125
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Intermedia Communications, Inc.:
Depositary Shares Representing one one-hundredth 7% Cum. Cv. Jr. Preferred Stock,
Series D, Non-Vtg. 30,000 1,233,750
7% Cv. Preferred Securities(4) 5,000 118,125
------------
Total Preferred Stocks (Cost $5,472,031) 4,415,000
================================================================================================================================
Other Securities--0.2%
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Monsanto Co., 6.50% Cv. Adjustable Conversion-rate Equity Security (Cost $1,400,000) 35,000 1,404,375
</TABLE>
8 Oppenheimer Multiple Strategies Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited)(Continued)
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<TABLE>
<CAPTION>
Market Value
Units Note 1
<S> <C> <C>
================================================================================================================================
Rights, Warrants and Certificates--0.0%
- --------------------------------------------------------------------------------------------------------------------------------
Banco Frances del Rio de la Plata SA Rts., Exp. 7/99 95,000 $ 190
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Covergent Communications, Inc. Wts., Exp. 4/08(3) 2,000 15,250
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Gaylord Container Corp. Wts., Exp. 11/02 9,232 69,240
- --------------------------------------------------------------------------------------------------------------------------------
IHF Capital, Inc. Series I Wts., Exp. 11/99(3) 1,000 10
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PE Corp. Wts., Cl. G, Exp. 9/03 249 3,237
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Terex Corp. Rts., Exp. 5/02(3) 4,000 56,500
-----------
Total Rights, Warrants and Certificates (Cost $20,772) 144,427
<CAPTION>
Principal
Amount(5)
================================================================================================================================
Mortgage-Backed Obligations--2.0%
- --------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation
Certificates, 7%, 5/1/29 $ 4,999,502 4,949,058
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Federal National Mortgage Assn., 6.50%, 11/1/27-12/1/27 4,324,490 4,173,307
- --------------------------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., 8%, 7/15/22-4/15/23 2,340,542 2,411,765
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Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates,
Series 1994-C2, Cl. E, 8%, 4/25/25 645,042 634,308
-----------
Total Mortgage-Backed Obligations (Cost $12,215,245) 12,168,438
================================================================================================================================
U.S. Government Obligations--11.5%
- --------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
8.875%, 8/15/17 2,900,000 3,694,783
STRIPS, 6.30%, 8/15/25(6) 12,900,000 2,637,237
STRIPS, 6.53%, 8/15/15(6) 7,100,000 2,571,017
STRIPS, 7.10%, 11/15/18(6) 16,000,000 4,721,808
STRIPS, 7.26%, 11/15/18(6) 10,000,000 2,951,130
STRIPS, 7.31%, 8/15/19(6) 18,000,000 5,076,162
- --------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
5.875%, 9/30/02 15,000,000 15,093,750
6.125%, 9/30/00 15,000,000 15,121,875
6.25%, 2/15/07 8,800,000 8,967,754
6.375%, 8/15/02 5,000,000 5,096,875
6.50%, 10/15/06 3,710,000 3,829,417
-----------
Total U.S. Government Obligations (Cost $67,611,608) 69,761,808
================================================================================================================================
Foreign Government Obligations--22.8%
- --------------------------------------------------------------------------------------------------------------------------------
Argentina--6.0%
Argentina (Republic of) Bonds:
Series BT06, 11.25%, 5/24/04 1,178,000 1,101,724
Series L, 6.04%, 3/31/05(7) 8,556,000 7,293,990
- --------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Nts., 14.25%, 11/30/02(7) 13,125,000 12,796,875
- --------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Par Bonds, 6%, 3/31/23(7) 23,750,000 15,140,625
-----------
36,333,214
- --------------------------------------------------------------------------------------------------------------------------------
Australia--0.6%
New South Wales Treasury Corp. Gtd. Bonds, 7%, 4/1/04(AUD) 3,160,000 2,157,782
- --------------------------------------------------------------------------------------------------------------------------------
Queensland Treasury Corp. Exchangeable Gtd. Nts., 10.50%, 5/15/03(AUD) 1,800,000 1,374,267
-----------
3,532,049
</TABLE>
Oppenheimer Multiple Strategies Fund/VA 9
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited)(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Amount (5) Note 1
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Brazil--4.3%
Brazil (Federal Republic of) Capitalization Bonds, 8%, 4/15/14 $21,395,512 $ 13,933,827
- --------------------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Eligible Interest Bonds, 5.97%, 4/15/06(7) 15,627,500 12,208,984
------------
26,142,811
- --------------------------------------------------------------------------------------------------------------------------------
Canada--2.8%
Canada (Government of) Bonds:
8.50%, 4/1/02(CAD) 1,500,000 1,095,492
8.75%, 12/1/05(CAD) 12,200,000 9,691,761
9.75%, 12/1/01(CAD) 3,000,000 2,230,772
9.75%, 6/1/01(CAD) 2,000,000 1,462,196
Series WL43, 5.75%, 6/1/29(CAD) 3,670,000 2,546,054
------------
17,026,275
- --------------------------------------------------------------------------------------------------------------------------------
Denmark--0.9%
Denmark (Kingdom of) Bonds, 8%, 3/15/06(DKK) 32,100,000 5,328,443
- --------------------------------------------------------------------------------------------------------------------------------
Great Britain--1.2%
United Kingdom Treasury Bonds, 6.75%, 11/26/04(GBP) 2,680,000 4,492,739
- --------------------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 13%, 7/14/00(GBP) 1,590,000 2,701,810
------------
7,194,549
- --------------------------------------------------------------------------------------------------------------------------------
Ireland--0.3%
Ireland (Government of) Bonds, 9.25%, 7/11/03(EUR) 1,409,409 1,756,538
- --------------------------------------------------------------------------------------------------------------------------------
Mexico--0.5%
United Mexican States Collateralized Fixed Rate Par Bonds, Series W-A, 6.25%, 12/31/19 4,450,000 3,248,500
- --------------------------------------------------------------------------------------------------------------------------------
New Zealand--5.1%
New Zealand (Government of) Bonds:
10%, 3/15/02(NZD) 16,800,000 9,848,585
8%, 2/15/01(NZD) 19,440,000 10,728,429
- --------------------------------------------------------------------------------------------------------------------------------
New Zealand (Government of) Nts., 6.50%, 2/15/00(NZD) 18,600,000 9,968,851
------------
30,545,865
- --------------------------------------------------------------------------------------------------------------------------------
Philippines--0.4%
Philippines (Republic of) Bonds, 8.60%, 6/15/27 1,500,000 1,222,500
- --------------------------------------------------------------------------------------------------------------------------------
Philippines (Republic of) Par Bonds, Series B, 6.50%, 12/1/17(3)(8) 1,675,000 1,444,688
------------
2,667,188
- --------------------------------------------------------------------------------------------------------------------------------
Poland--0.4%
Poland (Republic of) Bonds, 15%, 10/12/99(PLZ) 9,000,000 2,303,206
- --------------------------------------------------------------------------------------------------------------------------------
South Africa--0.3%
Eskom Depositary Receipts, Series E168, 11%, 6/1/08(ZAR) 12,570,000 1,634,453
------------
Total Foreign Government Obligations (Cost $141,295,441) 137,713,091
================================================================================================================================
Non-Convertible Corporate Bonds and Notes--5.9%
================================================================================================================================
Basic Materials--1.1%
- --------------------------------------------------------------------------------------------------------------------------------
Chemicals--0.4%
Lyondell Chemical Co., 10.875% Sr. Sub. Nts., 5/1/09(4) 700,000 731,500
- --------------------------------------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 85,000 89,675
- --------------------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 500,000 487,500
- --------------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc., 11.75% Sr. Unsec. Sub. Nts., 8/15/06 535,000 409,275
- --------------------------------------------------------------------------------------------------------------------------------
ZSC Specialty Chemical plc, 11% Sr. Nts., 7/1/09(4) 500,000 506,875
------------
2,224,825
</TABLE>
10 Oppenheimer Multiple Strategies Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited)(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Amount(5) Note 1
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Metals--0.4%
AK Steel Corp., 9.125% Sr. Nts., 12/15/06 $1,015,000 $1,050,525
- --------------------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 1,000,000 1,025,000
- --------------------------------------------------------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts., 12/1/07 450,000 434,250
----------
2,509,775
- --------------------------------------------------------------------------------------------------------------------------------
Paper--0.3%
Aracruz Celulose SA, 10.375% Debs., 1/31/02(3) 430,000 414,950
- --------------------------------------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 500,000 515,000
- --------------------------------------------------------------------------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 750,000 806,250
----------
1,736,200
================================================================================================================================
Capital Goods--0.2%
- --------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--0.1%
Amtran, Inc., 10.50% Sr. Nts., 8/1/04 500,000 502,500
- --------------------------------------------------------------------------------------------------------------------------------
Manufacturing--0.1%
International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 500,000 521,250
================================================================================================================================
Communication Services--1.6%
- --------------------------------------------------------------------------------------------------------------------------------
Telecommunications: Long Distance--1.1%
Convergent Communications, Inc., 13% Sr. Nts., 4/1/08 500,000 438,125
- --------------------------------------------------------------------------------------------------------------------------------
Global Crossing Ltd., 9.625% Sr. Nts., 5/15/08 750,000 768,750
- --------------------------------------------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(9) 415,000 342,375
- --------------------------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc., 8.50% Sr. Nts., Series B, 1/15/08 500,000 460,000
- --------------------------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts., Series B, 11/15/08 750,000 774,375
- --------------------------------------------------------------------------------------------------------------------------------
NTL, Inc., 0%/9.75% Sr. Deferred Coupon Nts., Series B, 4/1/08(9) 500,000 345,000
- --------------------------------------------------------------------------------------------------------------------------------
PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 1,250,000 1,262,500
- --------------------------------------------------------------------------------------------------------------------------------
Telewest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(9) 1,000,000 895,000
9.625% Sr. Debs., 10/1/06 500,000 517,500
- --------------------------------------------------------------------------------------------------------------------------------
Verio, Inc., 11.25% Sr. Nts., 12/1/08 600,000 631,500
----------
6,435,125
- --------------------------------------------------------------------------------------------------------------------------------
Telecommunications: Wireless--0.5%
Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(9) 750,000 555,000
- --------------------------------------------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 535,000 548,375
11.625% Sr. Nts., Series A, 8/15/06 90,000 92,250
- --------------------------------------------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 200,000 195,000
- --------------------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 750,000 757,500
- --------------------------------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 1,000,000 815,000
----------
2,963,125
</TABLE>
Oppenheimer Multiple Strategies Fund/VA 11
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited)(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Amount(5) Note 1
<S> <C> <C>
================================================================================================================================
Consumer Cyclicals--0.8%
- --------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--0.4%
Building Materials Corp. of America, 8.625% Sr. Nts., Series B, 12/15/06 $ 100,000 $ 98,000
- --------------------------------------------------------------------------------------------------------------------------------
Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 300,000 246,000
- --------------------------------------------------------------------------------------------------------------------------------
Chrysler Financial LLC, 13.25% Debs., 10/15/99 500,000 509,927
- --------------------------------------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 500,000 543,750
- --------------------------------------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 610,000 460,550
- --------------------------------------------------------------------------------------------------------------------------------
Kaufman & Broad Home Corp., 7.75% Sr. Nts., 10/15/04 400,000 390,000
----------
2,248,227
- --------------------------------------------------------------------------------------------------------------------------------
Consumer Services--0.0%
Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 150,000 155,250
- --------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--0.2%
Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05 500,000 473,750
- --------------------------------------------------------------------------------------------------------------------------------
Meristar Hospitality Corp., 8.75% Sr. Sub. Nts., 8/15/07(4) 500,000 477,500
- --------------------------------------------------------------------------------------------------------------------------------
Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07 500,000 507,500
----------
1,458,750
- --------------------------------------------------------------------------------------------------------------------------------
Media--0.2%
Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 500,000 613,381
- --------------------------------------------------------------------------------------------------------------------------------
Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 571,060
----------
1,184,441
================================================================================================================================
Consumer Staples--1.4%
- --------------------------------------------------------------------------------------------------------------------------------
Broadcasting--1.1%
American Telecasting, Inc., 14.50% Sr. Disc. Nts., 6/15/04 129,908 137,053
- --------------------------------------------------------------------------------------------------------------------------------
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 400,000 408,000
- --------------------------------------------------------------------------------------------------------------------------------
Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,000,000 1,001,250
- --------------------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 9.875% Sr. Sub. Nts., 5/15/06 250,000 266,250
- --------------------------------------------------------------------------------------------------------------------------------
Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs., Series B, 4/15/10(9) 600,000 423,000
- --------------------------------------------------------------------------------------------------------------------------------
Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03(7) 550,000 577,500
- --------------------------------------------------------------------------------------------------------------------------------
Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 1,000,000 1,076,250
- --------------------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
8.75% Sr. Sub. Nts., 12/15/07 500,000 487,500
9% Sr. Unsec. Sub. Nts., 7/15/07 375,000 372,188
- --------------------------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,000,000 1,063,732
- --------------------------------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 900,000 877,500
----------
6,690,223
- --------------------------------------------------------------------------------------------------------------------------------
Food & Drug Retailers--0.2%
Fleming Cos., Inc.:
10.50% Sr. Sub. Nts., Series B, 12/1/04 300,000 283,500
10.625% Sr. Sub. Nts., Series B, 7/31/07 560,000 522,200
- --------------------------------------------------------------------------------------------------------------------------------
Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 500,000 527,500
----------
1,333,200
</TABLE>
12 Oppenheimer Multiple Strategies Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited)(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Amount(5) Note 1
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Household Goods--0.1%
Revlon Consumer Products Corp.:
8.625% Sr. Unsec. Sub. Nts., 2/1/08 $ 500,000 $ 470,000
9% Sr. Nts., 11/1/06 70,000 69,300
- --------------------------------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., Series B, 10.09%, 3/15/01(6) 260,000 170,300
------------
709,600
================================================================================================================================
Energy--0.1%
- --------------------------------------------------------------------------------------------------------------------------------
Energy Services--0.1%
Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05(4) 950,000 840,750
================================================================================================================================
Financial--0.1%
- --------------------------------------------------------------------------------------------------------------------------------
Banks--0.1%
First Chicago Corp., 11.25% Sub. Nts., 2/20/01 250,000 269,285
================================================================================================================================
Healthcare--0.0%
- --------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--0.0%
Integrated Health Services, Inc., 9.50% Sr. Sub. Nts., 9/15/07 170,000 124,950
- --------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies & Services--0.0%
Sun Healthcare Group, Inc., 9.375% Sr. Sub. Nts., 5/1/08(4)(10) 1,000,000 180,000
================================================================================================================================
Transportation--0.2%
- --------------------------------------------------------------------------------------------------------------------------------
Air Transportation--0.2%
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 1,000,000 886,250
- --------------------------------------------------------------------------------------------------------------------------------
Shipping--0.0%
Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07(4) 500,000 247,500
================================================================================================================================
Utilities--0.4%
- --------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--0.2%
Calpine Corp.:
8.75% Sr. Nts., 7/15/07 400,000 396,000
10.50% Sr. Nts., 5/15/06 800,000 856,000
------------
1,252,000
- --------------------------------------------------------------------------------------------------------------------------------
Gas Utilities--0.2%
Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 989,000 1,033,505
------------
Total Non-Convertible Corporate Bonds and Notes (Cost $37,483,215) 35,506,731
================================================================================================================================
Repurchase Agreements--7.4%
- --------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.80%, dated 6/30/99,
to be repurchased at $44,705,960 on 7/1/99, collateralized by U.S. Treasury Nts.,
5.50%-8%, 11/30/99-7/15/06, with a value of $37,735,795, U.S. Treasury Bonds,
6%-9.25%, 2/15/16-2/15/26, with a value of $7,902,182 (Cost $44,700,000) 44,700,000 44,700,000
- --------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $507,780,770) 99.5% 602,720,480
- --------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.5 3,082,238
---------- ------------
Net Assets 100.0% $605,802,718
========== ============
</TABLE>
Oppenheimer Multiple Strategies Fund/VA 13
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited)(Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. A sufficient amount of liquid assets has been designated to cover outstanding
written options, as follows:
<TABLE>
<CAPTION>
Shares Expiration Exercise Premium Market Value
Subject to Call Date Price Received Note 1
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
ASM Lithography Holding NV 10,000 10/99 $ 55.00 $ 37,128 $ 92,500
Alaska Air Group, Inc. 14,500 10/99 55.00 66,625 9,063
American Express Co. 4,000 10/99 140.00 52,378 31,500
American Express Co. 6,000 10/99 145.00 57,568 33,000
Analog Devices, Inc. 16,800 9/99 45.00 21,545 121,800
CBS Corp. 33,000 10/99 50.00 114,506 53,625
Chase Manhattan Corp. 21,000 9/99 95.00 117,491 57,750
Cisco Systems, Inc. 6,000 10/99 65.00 28,784 36,750
Cisco Systems, Inc. 5,000 10/99 67.50 24,299 20,625
Du Pont (E. I.) De Nemours & Co. 7,000 7/99 65.00 44,415 31,500
Electronic Arts, Inc. 17,400 9/99 55.00 87,050 87,000
Federated Department Stores, Inc. 13,500 8/99 55.00 31,656 31,219
First Data Corp. 13,500 11/99 45.00 48,531 96,187
Hewlett-Packard Co. 5,000 8/99 100.00 29,850 30,000
Hewlett-Packard Co. 10,000 8/99 90.00 26,699 120,000
Intel Corp. 34,000 10/99 75.00 126,477 42,500
International Business Machines Corp. 4,000 10/99 100.00 23,439 124,000
International Business Machines Corp. 40,000 10/99 115.00 33,939 80,500
International Business Machines Corp. 10,000 7/99 115.00 39,099 150,000
J.P. Morgan & Co., Inc. 6,000 9/99 135.00 64,050 78,750
Jones Apparel Group, Inc. 25,000 8/99 35.00 49,248 56,250
Morgan Stanley Dean Witter & Co. 5,000 10/99 120.00 38,600 25,000
Novell, Inc. 37,000 11/99 30.00 105,262 83,250
Potash Corp. of Saskatchewan, Inc. 5,800 9/99 75.00 5,142 363
Qwest Communications International, Inc. 20,000 7/99 37.50 90,947 8,750
Qwest Communications International, Inc. 30,000 10/99 50.00 198,293 22,500
RCN Corp. 16,000 9/99 50.00 91,520 40,000
Rational Software Corp. 22,300 10/99 35.00 117,028 97,562
Sabre Group Holdings, Inc. 10,800 11/99 60.00 109,404 144,450
Schlumberger Ltd. 11,000 11/99 70.00 45,043 46,750
Xerox Corp. 8,000 10/99 65.00 40,759 24,000
---------- ----------
$1,966,775 $1,877,144
========== ==========
</TABLE>
2. Non-income producing security.
3. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
4. 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 $4,466,563 or 0.74% of the Fund's net
assets as of June 30, 1999.
5. Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
AUD -- Australian Dollar GBP -- British Pound Sterling
CAD -- Canadian Dollar NZD -- New Zealand Dollar
DKK -- Danish Krone PLZ -- Polish Zloty
EUR -- Euro ZAR -- South African Rand
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 a variable rate security.
8. Represents the current interest rate for an increasing rate security.
9. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
10. Non-income producing--issuer is in default.
See accompanying Notes to Financial Statements.
14 Oppenheimer Multiple Strategies Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
=================================================================================================
<S> <C>
Assets
Investments, at value (cost $507,780,770)--see accompanying statement $602,720,480
- -------------------------------------------------------------------------------------------------
Cash 14,720
- -------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest 4,838,221
Investments sold 1,789,637
Shares of beneficial interest sold 61,770
Other 3,648
------------
Total assets 609,428,476
=================================================================================================
Liabilities
Options written, at value (premiums received $1,966,775)--see accompanying
statement--Note 5 1,877,144
- -------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,106,962
Investments purchased 601,638
Shareholder reports 14,596
Custodian fees 12,094
Trustees' compensation 1,009
Transfer and shareholder servicing agent fees 179
Other 12,136
------------
Total liabilities 3,625,758
=================================================================================================
Net Assets $605,802,718
============
=================================================================================================
Composition of Net Assets
Paid-in capital $475,821,319
- -------------------------------------------------------------------------------------------------
Undistributed net investment income 13,291,371
- -------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 21,700,792
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 94,989,236
------------
Net assets--applicable to 35,760,827 shares of beneficial interest outstanding $605,802,718
============
=================================================================================================
Net Asset Value, Redemption Price Per Share and Offering Price Per Share $16.94
</TABLE>
See accompanying Notes to Financial Statements.
Oppenheimer Multiple Strategies Fund/VA 15
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
=============================================================================================
<S> <C>
Investment Income
Interest $12,912,665
- ---------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $7,319) 2,634,175
-----------
Total income 15,546,840
=============================================================================================
Expenses
Management fees--Note 4 2,170,040
- ---------------------------------------------------------------------------------------------
Custodian fees and expenses 44,114
- ---------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 13,707
- ---------------------------------------------------------------------------------------------
Trustees' compensation 4,315
- ---------------------------------------------------------------------------------------------
Registration and filing fees 3,678
- ---------------------------------------------------------------------------------------------
Insurance expenses 2,414
- ---------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 1,051
- ---------------------------------------------------------------------------------------------
Other 995
-----------
Total expenses 2,240,314
Less expenses paid indirectly--Note 1 (2,136)
-----------
Net expenses 2,238,178
=============================================================================================
Net Investment Income 13,308,662
=============================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 22,953,159
Closing and expiration of option contracts written--Note 5 (459,293)
-----------
Net realized gain 22,493,866
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 15,446,834
Translation of assets and liabilities denominated in foreign currencies (1,968,902)
-----------
Net change 13,477,932
-----------
Net realized and unrealized gain 35,971,798
=============================================================================================
Net Increase in Net Assets Resulting from Operations $49,280,460
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Multiple Strategies Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1999 December 31,
(Unaudited) 1998
<S> <C> <C>
================================================================================================================================
Operations
Net investment income $ 13,308,662 $ 25,911,095
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain 22,493,866 29,540,227
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 13,477,932 (15,895,873)
------------ ------------
Net increase in net assets resulting from operations 49,280,460 39,555,449
================================================================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income (20,765,472) (5,964,037)
- --------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (30,037,334) (34,591,414)
================================================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions--Note 2 (15,008,237) (14,211,527)
================================================================================================================================
Net Assets
Total decrease (16,530,583) (15,211,529)
- --------------------------------------------------------------------------------------------------------------------------------
Beginning of period 622,333,301 637,544,830
------------ ------------
End of period (including undistributed net investment
income of $13,291,371 and $20,748,181, respectively) $605,802,718 $622,333,301
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
Oppenheimer Multiple Strategies Fund/VA 17
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 1999 Year Ended December 31,
(Unaudited) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
==================================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $17.05 $17.01 $15.63 $14.55 $12.91 $13.88
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .39 .71 .62 .72 .66 .63
Net realized and unrealized gain (loss) .95 .42 1.95 1.45 2.00 (.90)
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment operations 1.34 1.13 2.57 2.17 2.66 (.27)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.59) (.16) (.61) (.74) (.65) (.60)
Distributions from net realized gain (.86) (.93) (.58) (.35) (.37) (.10)
- ----------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (1.45) (1.09) (1.19) (1.09) (1.02) (.70)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.94 $17.05 $17.01 $15.63 $14.55 $12.91
====== ====== ====== ====== ====== ======
==================================================================================================================================
Total Return, at Net Asset Value(1) 8.47% 6.66% 17.22% 15.50% 21.36% (1.95)%
==================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $605,803 $622,333 $637,545 $484,285 $381,263 $292,067
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $608,451 $640,131 $564,369 $428,277 $344,745 $279,949
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 4.41% 4.05% 3.86% 4.89% 4.81% 4.90%
Expenses(3) 0.74% 0.76% 0.75% 0.77% 0.77% 0.56%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 8% 43% 42% 40% 39% 31%
</TABLE>
1. Assumes a $1,000 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 for periods less than one full year.
3. Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
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, 1999, were $45,249,469 and $77,316,061, respectively.
See accompanying Notes to Financial Statements.
18 Oppenheimer Multiple Strategies Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer Multiple Strategies Fund/VA (the Fund) is a 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 Fund operated under the name Oppenheimer Multiple
Strategies Fund through April 30, 1999. The Fund's investment objective is to
seek a high total investment return, which includes current income and capital
appreciation in the value of its shares. The Trust's investment advisor is
OppenheimerFunds, Inc. (the Manager). The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Portfolio securities 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. 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.
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities 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.
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 Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires 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 Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends 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.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Distributions to shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date.
- --------------------------------------------------------------------------------
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 the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of 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 Fund.
Oppenheimer Multiple Strategies Fund/VA 19
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)(Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Realized gains and losses on
investments and options written and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
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 Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1999 Year Ended December 31, 1998
---------------------------------- --------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 697,552 $ 11,730,045 3,352,415 $ 56,547,384
Dividends and distributions reinvested 3,209,274 50,802,806 2,387,019 40,555,451
Redeemed (4,643,548) (77,541,088) (6,714,957) (111,314,362)
---------- ------------ ---------- -------------
Net decrease (736,722) $(15,008,237) (975,523) $ (14,211,527)
========== ============ ========== =============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of June 30, 1999, net unrealized appreciation on investments and options
written of $95,029,341 was composed of gross appreciation of $117,281,001, and
gross depreciation of $22,251,660.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 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 $800 million. The Fund's management fee for the six
months ended June 30, 1999 was 0.71% of average annual net assets.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer agent for the Fund and is responsible for maintaining the shareholder
registry and shareholder accounting records for the Fund. OFS provides these
services at cost.
20 Oppenheimer Multiple Strategies Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
5. Option Activity
The Fund 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 Fund generally purchases put options or writes covered call options
to hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes 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 Fund 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 Statement of Investments where applicable. Shares subject to call,
expiration date, exercise price, premium received and market value are detailed
in a note to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives 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 Fund 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 Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the six months ended June 30, 1999, was as follows:
<TABLE>
<CAPTION>
Call Options
------------------------------------
Number of Amount of
Options Premiums
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding as of December 31, 1998 5,871 $1,686,387
Options written 5,036 2,154,702
Options closed or expired (3,911) (893,057)
Options exercised (2,680) (981,257)
------ ----------
Options outstanding as of June 30, 1999 4,316 $1,966,775
====== ==========
</TABLE>
================================================================================
6. Illiquid or Restricted Securities
As of June 30, 1999, 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 also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
15% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of June 30, 1999, was $2,885,696, which
represents 0.48% of the Fund's net assets, of which $4,824 is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation Per
Acquisition Cost Per Unit as of
Security Date Unit June 30, 1999
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Intermedia Communications, Inc. 9/29/98 $21.69 $24.00
</TABLE>
Oppenheimer Multiple Strategies Fund/VA 21
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer Multiple Strategies Fund/VA
- --------------------------------------------------------------------------------
A Series of Oppenheimer Variable Account Fund
<TABLE>
<CAPTION>
=================================================================================================================================
<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
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
John P. Doney, Vice President
Michael S. Levine, Vice President
Richard H. Rubinstein, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Vice President and Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
=================================================================================================================================
Investment Advisor OppenheimerFunds, Inc.
=================================================================================================================================
Transfer Agent OppenheimerFunds Services
=================================================================================================================================
Custodian of Portfolio Securities The Bank of New York
=================================================================================================================================
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 Fund
without examination of the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Multiple Strategies Fund/VA.
This report must be preceded or accompanied by a Prospectus of Oppenheimer Multiple
Strategies Fund/VA. For material information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the FDIC or any other agency, and involve
investment risks, including the possible loss of the principal amount invested.
</TABLE>
22 Oppenheimer Multiple Strategies Fund/VA
