CENTENNIAL CALIFORNIA TAX EXEMPT TRUST, 497, 1994-10-28

CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
497, 1994-10-28

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<PAGE>

A.G. Edwards
Investments Since 1887

UltraAsset

The Preferred Account for Select Investors

Centennial California Tax Exempt Trust

1995 Prospectus

Managed and Distributed by

Centennial Asset
Management Corporation

<PAGE>

UltraAsset Account

Summary Description

The UltraAsset Account Program (UAA) of A.G. Edwards & Sons, Inc.
(AGE) offers integrated financial services by linking together four
components:

(1) the Securities Account, which is a conventional AGE securities
margin account;

(2) the Investment Fund, which consists of your choice of no-load
money market funds (the Funds);

(3) the VISA(R) Gold Account, which is a VISA Gold check/card account
maintained by Bank One, N.A., Columbus, Ohio (Bank One); and

(4) monthly portfolio valuation reports and gain and loss summary.

Free cash balances (i.e., any cash that may be withdrawn or
transferred out of the Securities Account without creating an interest
charge or a need for additional margin) held in the Securities Account of
persons establishing a UAA are invested in either Centennial Money Market
Trust, a no-load money market fund (the Money Market Trust), Centennial
Tax Exempt Trust, a no-load, short-term tax-exempt securities fund (the
Tax Exempt Trust), Centennial Government Trust, a no-load, short-term
government securities fund (the Government Trust) or in Centennial America
Fund, L.P., a no-load government securities money market fund for foreign
investors. In addition, residents of California and New York are offered
the option of investing in Centennial California Tax Exempt Trust and
Centennial New York Tax Exempt Trust, respectively (the State Tax Exempt
Funds).

AGE charges a fee for the UAA services to partially defray the costs
of maintaining and servicing the UAA, including Bank One's processing
charges that AGE will pay. AGE will make no commission or other charge
in connection with the purchase or redemption of Fund shares. The Funds
pay investment advisory fees and incur certain administrative and
operational expenses, as do other mutual funds. The client will pay AGE's
normal brokerage fees for securities transactions in the Securities
Account and will pay interest on margin loans made in the Account. In
addition, Bank One may impose certain charges in the VISA Gold Account.

An AGE client may subscribe to the UAA financial service by
depositing a minimum of $20,000 in any combination of cash and/or
securities in the Securities Account. AGE may alter or waive conditions
on which a UAA may be established, either with respect to services
generally or to special groups or limited categories of individuals. AGE
may change the annual service fee at any time upon 10 days' notice to
participants. Both AGE and Bank One have the right to reject any
application to open a UAA and to terminate a UAA for any reason. The
following pages describe the principal attributes of each UAA component.

This description of the UAA is a brochure and is not a prospectus,
and must be accompanied by the current prospectus of Centennial Money
Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust,
Centennial America Fund, L.P., or the State Tax Exempt Funds. The
prospectus describes in detail the Fund's objective, investment policies,
risks, fees and other matters of interest. Please read the attached
prospectus carefully before you invest or send money.

<PAGE>

(the phrase "This brochure is not part of the prospectus." appears at the
bottom of each of these pages)

Securities Account
The Securities Account, the primary component of the UAA, is a
conventional margin account maintained by AGE, which the client may use
to purchase and sell securities and options on margin or on a fully paid
basis. All dividends and interest accruing and paid on these securities
will be held pending use in accordance with the agreements between AGE and
the client. The interest rates charged for margin loans range from to
3/4% to 2 1/2% above the rate charged by New York City banks to brokers
to finance clients' margin transactions. The maximum loan value of
marginable common stocks is presently 50% of their current value. AGE
will maintain the Securities Account in accordance with and subject to all
then applicable federal and state laws and rules and regulations
promulgated thereunder; the constitution, rules, customs and usages of the
applicable exchange, association, market or clearinghouse; and the customs
and usages of those transacting business on such exchange, market or
clearinghouse. As in the case of a regular margin account, the client
pays AGE's normal brokerage fees for securities transactions in the
Securities Account. Each client will have the same protection with
respect to the Securities Account as any other Securities Account client,
including up to $500,000 from the Securities Investor Protection
Corporation. In addition, each client has an extra $24.5 million worth
of coverage on all securities held by AGE in a UAA, including Fund shares.

The Funds
AGE will automatically invest free cash balances in the Securities
Account in shares of the Money Market Trust, the Tax Exempt Trust, the
Government Trust, Centennial America Fund, L.P.,* or the appropriate State
Tax Exempt Fund, depending on which Fund the investor selects as the
primary investment. Free cash balances will be automatically invested no
less frequently than weekly in shares of the appropriate Fund at their net
asset value as described below. Dividends will be declared daily on Fund
shares and will be reinvested monthly in additional shares. The investor
may change the primary Fund at any time. The client understands that an
investment in the Fund is not equivalent to a deposit. Although the Fund
strives to maintain a net asset value of $1 per share, the value of a
shareholder's investment may fluctuate as with any investment in
securities. Certificates of the Fund will not be physically issued. For
further information, see "How to Buy Shares" and "Dividends, Distributions
and Tax Information" or "Distributions and Taxes" in the accompanying Fund
prospectus. The Funds' distributor partially reimburses AGE for costs
incurred in distributing Fund shares.

[FN]
________________
*Centennial America Fund, L.P. is only available to foreign investors.

The UAA permits a client to use free cash balances effectively by
having them promptly invested in Fund shares, ensuring full investment of
such funds pending other investments in the Securities Account or payments
of charges incurred in the VISA Gold check/card account. Because AGE may
advance funds on a client's behalf to purchase Fund shares and earn
dividends prior to final collection of checks deposited to the client's
account, it is understood AGE may withhold access to redemption proceeds
of Fund shares purchased with advanced funds until it is satisfied that
all checks deposited to the client's account have been collected. The
Federal Deposit Insurance Corporation, or any other governmental insurance
agency, does not insure the value of Fund shares. However, Fund shares,
like shares of any public issuer held in a brokerage account, are subject
to the Securities Investor Protection Act, which protects brokerage
clients from losses up to $500,000 arising from the insolvency of their
brokerage firm. Also AGE provides an additional $24.5 million worth of
account protection through a special policy with a major independent
insurance carrier.

Fund shares will be redeemed automatically as necessary to satisfy
debit balances in the Securities Account or amounts owing in the VISA Gold
check/card account and may also be redeemed at the client's request if not
required to satisfy such debit balances as described below.

AGE will make no commission or other charge with respect to the
purchase or redemption of Fund shares. The Funds have been created as
component parts of the UAA and other investment programs and, in view of
the service fee charged UAA participants, investors who seek solely to
invest cash in a money market fund or a short-term, tax-exempt or a
government securities fund and do not wish to use the automatic investment
and other special features of the UAA, should consider other money market,
tax-exempt or government securities funds offered directly to the public
as a more suitable investment. Centennial Asset Management Corporation,
the distributor of the Funds, may add additional investment funds as
components of the UAA in the future.

The Funds constitute only one component of the UAA. Investors should
read the prospectuses of the Funds in conjunction with the UAA Agreement,
which is available from AGE and must be signed by UAA participants.

Automatic Purchases
Once AGE and Bank One accept a UAA, free cash balances at the end of
each week will be invested automatically on the first business day of the
following week in the primary Fund selected by the investor. Free cash
balances arising from certain transactions will be invested automatically
in Fund shares prior to the previously mentioned automatic investment; the
free cash balances from those transactions are as follows: (a) free cash
balances in any amount of $1 or more arising from the sale of securities
will be invested on the next business day following receipt of the
proceeds; and (b) free cash balances arising from a cash deposit or from
other nondividend or interest entries of $500 or more on any one day will
be invested on the next business day following the deposit or entry unless
the deposit is made after the local AGE branch cashiering deadline.
Dividends and interest totaling $500 or more on any one day will be
invested on the next business day. Shares are credited with the dividend
earned on the date of purchase for shares purchased by noon Eastern time
that day. At any time, the client may withdraw any uninvested free cash
balance from the Securities Account by notifying the investment broker by
letter or telephone. For further information, see "How to Buy Shares" and
"Dividends and Distributions" or "Distributions" in the accompanying Fund
prospectus.

Redemption of Shares
Each Fund must redeem for cash all full and fractional shares of the
Fund subject to the conditions described in its prospectus. The
redemption price is the net asset value per share next determined after
receipt by the transfer agent of proper notice of redemption, in
accordance with either the automatic or manual procedures described below.
If the transfer agent receives the notice from AGE before the
determination of net asset value at noon Eastern time on any day that the
New York Stock Exchange and the Fund's custodian bank are open for
business, the redemption will be effective on such day. Payment of the
redemption proceeds will be made after noon Eastern time on the day the
redemption becomes effective. If AGE receives the notice after noon
Eastern time, the redemption in the UAA will be effective on the next
business day and payment will be made on that day. If an investor redeems
all of the Fund shares in the UAA at any time during a month, the Fund
will pay all dividends accrued to the date of redemption together with the
redemption proceeds. Dividends in UAAs are earned through the day prior
to redemption. For further information, see "How to Redeem Shares" in the
accompanying Fund prospectus.

Automatic Redemptions
Whenever a debit balance arises in the Securities Account created by
activity therein or created by VISA Gold card purchases, cash advances,
or checks written against the VISA Gold Account, AGE will automatically
effect redemptions. Daily debit balances will be satisfied first by any
free cash balances and second by the redemption of Fund shares. Margin
loans will be used to satisfy debits remaining in either the Securities
Account or the VISA Gold Account after the use of the free cash balances
and the redemption of all Fund shares, and the investor may not purchase
shares until all debits and margin loans are satisfied. If Fund shares
are redeemed to satisfy these debits, the investor earns dividends up to
the day AGE makes payment for the UAA.

Manual Redemption
Shareholders may redeem Fund shares directly by submitting a written
request for redemption to AGE, which will submit requests to the Funds'
transfer agent. AGE will ordinarily mail cash proceeds from the manual
redemption of Fund shares to the shareholder. Redemption requests should
not be sent to the Funds or their transfer agent. The redemption request
requires the signatures of all persons in whose name the Securities
Account is established, signed exactly as their names appear on their
statements. In certain instances, additional documents, such as, but not
limited to, trust instruments, death certificates, appointments as
executor or administrator, or certificates of corporate authority, may be
required before redemption may be made.

VISA Gold Account
Bank One, with which AGE has entered into an agreement for this
purpose, may issue a VISA Gold card and checks to each person who is a UAA
client other than under certain accounts described below under "Group
Plans and Special Accounts." The UAA client may use the VISA Gold card
to purchase merchandise or services at participating establishments or to
obtain cash advances (which a bank may limit to $5,000 per account per
day) from any participating bank or its branch. Any of 362,000 worldwide
bank branches in the VISA system, as well as all establishments accepting
the VISA card, will honor the VISA Gold card. Presently, more than 10
million stores, restaurants and service outlets worldwide honor the VISA
card. You may also obtain cash advances using your VISA Gold card and
personal identification number (PIN) from automated teller machines (ATMs)
displaying the VISA or PLUS(R) logos. A $1 charge is assessed for each ATM
transaction or cash advance. The UAA client may draw checks on the VISA
Gold Account for any purpose. Bank One will impose its normal charges for
stop payment orders and checks that are returned because they have
exceeded the authorization limit described below or for special,
investigative or research services. If a client wishes to stop payment
on a UAA check, verbal requests must be confirmed in writing to AGE and
the bank within 14 days, and the request will not bind AGE or the bank for
a period of four business days after the initial request. Neither AGE nor
the bank will incur any liability for honoring a check within four
business days of the client request. The client understands a stop
payment fee may be charged for this special request.

Neither the VISA Gold card nor the Bank One checks may be used to
purchase securities in the Securities Account or Fund shares. The maximum
amount available (authorization limit) for VISA Gold purchases, cash
advances and Bank One checking for a client's UAA is the total of (a) any
uninvested free cash balances in the Securities Account, (b) the net asset
value of the Fund shares held for the client's UAA, and (c) the available
margin loan value of securities in the Securities Account. Since the
authorization limit depends on the status of cleared checks deposited to
the Securities Account, securities prices, as well as changes in the debit
balance in the Securities Account and the VISA Gold Account, will
fluctuate from day to day. The authorization limit is instantaneously
reduced at the time Bank One is notified of the use of the VISA Gold card,
not at the time the applicable sales draft or cash advance draft is paid.
Fund shares are not redeemed, however, until the item is presented to Bank
One for payment and the request is submitted to AGE for redemption.

Unlike standard credit card procedures under which bills are rendered
monthly and free credit may be extended for a period of up to 25 days
thereafter, Bank One will notify AGE daily of any charges presented
against the VISA Gold Account, whether by use of the VISA Gold card or
checks. AGE will pay Bank One on behalf of its clients from the UAA on
the day AGE receives notice of the debit. AGE will pay for charges in the
following order of priority: first, from free cash balances, if any, held
in the Securities Account pending investment; second, from the proceeds
of redemption of Fund shares; and third (if those sources prove
insufficient), from margin loans made to the client by AGE within the
available margin loan value of the securities in the Securities Account.
AGE will charge interest on any such margin loans. This system provides
for an efficient use of funds since the client will not incur the cost of
a margin loan until all free cash balances and funds invested in Fund
shares are fully used. If charges in an investor's VISA Gold Account are
satisfied by redemption of Fund shares, ownership of the shares will
transfer to AGE as of the date it pays Bank One on behalf of the investor,
and AGE will retain the dividends accruing on the shares between the date
of the payment and the date of redemption. Clients have no unsecured
borrowing privileges in the VISA Gold Account. A client participating in
the UAA program must agree not to exceed the authorization limit. Any
overdraft will be immediately payable by the client to Bank One, which
will impose a charge at an annual rate not to exceed 25% for the time the
overdraft is outstanding.

At its sole discretion, AGE may return a check unpaid if there are
insufficient funds in the account to cover payment. The account will be
subject to additional charges for each returned check. The account may
also be subject to any additional fees charged by a processing bank for
excessive deposits.

Clients who subscribe to a UAA will receive a transaction statement
from AGE that will detail all UAA transactions during the preceding month.
The statement will describe securities and options bought and sold in the
Securities Account, whether on margin or on a fully paid basis, any other
type of transaction effected in the Securities Account, margin interest
charges, if any, Fund shares that were purchased or redeemed, and
dividends on Fund shares. The statement will also show purchases of
merchandise or services with the VISA Gold card, checks drawn against the
VISA Gold Account and cash advances. The Fund will not send confirmations
for automatic purchases and redemption of fund shares.

A client may subscribe to the UAA with the minimum amount of $20,000
in any combination of gross market value of securities, marginable or
nonmarginable, and/or cash. To subscribe, clients must execute a UAA
Agreement with AGE, which includes a Checking Account/VISA Account
Application. AGE, in its discretion, may waive such conditions in special
instances, certain of which are described below under "Group Plans and
Special Accounts." Both AGE and Bank One may terminate any client's UAA
for any reason at any time. AGE may terminate a client's UAA if, at the
expiration date of the client's VISA Gold card, the Securities Account
does not have a value of at least $5,000, including any Fund shares. New
York Stock Exchange rules require that margin accounts maintain a minimum
of $2,000 of equity. Clients may be prohibited from maintaining both a
UAA and a non-UAA account with AGE.

Clients subscribing to the UAA may be liable for the unauthorized use
of their VISA Gold card in an amount up to $50. The owner of the VISA
Gold card will not be liable for any unauthorized use that occurs after
Bank One has been notified verbally or in writing of loss, theft or
possible unauthorized use of the card. If Fund shares are redeemed due
to the unauthorized use of the VISA Gold card, the shares will be
reinstated as if never sold and AGE will indemnify the Fund against any
losses caused. If a VISA Gold card is lost or stolen, the UAA client
should report the loss immediately by calling the UAA Service Center at
(800) 825-1822 during normal business hours or by placing a collect call
to Bank One at (614) 248-4242 after business hours.

Portfolio Management Reports
Clients subscribing to a UAA will receive several portfolio
management reports. These include monthly portfolio valuation reports
that give an overall picture of assets in the UAA, and a monthly gain and
loss summary that reports all securities sold during the year and
indicates whether the client incurred a gain or loss on the transaction.
AGE prepares these reports for the client's convenience and does not
intend for them to replace official documentation, such as trade
confirmations, account statements and Form(s) 1099, which the client
should retain for tax purposes. Clients should consult their tax advisors
for income tax record keeping requirements.

Group Plans and Special Accounts
AGE may modify the conditions of the UAA for certain group plans and
limited categories of individuals, typically by providing for a cash
securities account instead of a margin account or by providing for limited
use of the VISA Gold Account. In the case of group or special accounts,
the regular minimum may be waived. Such participants may be charged a
higher service fee than that charged to other participants in the program.

General
Investors should be aware that the checking feature of the UAA is
intended to provide clients with easy access to the assets in their
accounts and that the UAA is not a bank account.

From time to time, certain state administrative agencies have raised
questions whether the operation of a UAA-type program constitutes banking
under the laws of their state. In addition, legislation has been proposed
in certain states, which, if enacted, could require a modification of the
UAA in those states. Neither AGE nor any of the Funds is a bank and they
believe that the operation of the UAA does not constitute banking under
the laws of any state. Final adverse rulings in any state that the UAA
constitutes unauthorized banking therein or the adoption of legislation
by any state affecting the UAA could force the Funds to liquidate shares
for residents in such state or to cease offering their shares in such
state as part of the UAA.

UltraAsset Account is proprietary to A.G. Edwards & Sons, Inc.

Investors should carefully read the accompanying Fund prospectus.

<PAGE>

A.G. Edwards
Investments Since 1887

-----------
Cash
Convenience
Account
-----------

Centennial California Tax Exempt Trust

1995 Prospectus

Managed and Distributed by

Centennial Asset
Management Corporation

<PAGE>

Cash Convenience Account

The Cash Convenience Account Program (CCA) of A.G. Edwards & Sons,
Inc. (AGE) offers a conventional AGE securities account (the Securities
Account) linked to a no-load money market mutual fund (the Fund), and if
desired, check writing redemption procedures (Check Writing). (A client
must request Check Writing on a separate Check Writing Privilege
Authorization and Specimen Signature Form.)

An AGE client may subscribe to a CCA program by depositing a minimum
of $2,500 of free cash balance (that is, any cash that may be withdrawn
from the Securities Account without resulting in interest charges) in the
Securities Account. This free cash balance must be available with no
unsettled transactions reducing the available cash balance to less than
$2,500 at the time the CCA begins operation. After the client has met this
initial requirement, AGE will automatically invest subsequent free cash
balances of $250 or more resulting from securities sales, additional cash
deposits, and interest or dividends held in the account, or any other free
cash balance that may be withdrawn from the Securities Account without
resulting in a debit balance in Fund shares at their current net asset
value at least once a week (Automatic Purchase Order). AGE will redeem
Fund shares, if available, at net asset value to satisfy debit balances
in the Securities Account (Automatic Redemption Order).

AGE will make no commission or other transaction charge in connection
with the purchase or redemption of Fund shares. The Fund pays investment
advisory fees and incurs certain administrative and operational expenses,
as do other mutual funds. The client will pay AGE's normal brokerage fees
for securities transactions in the Securities Account.

AGE may alter or waive conditions on which a CCA may be established,
either with respect to services generally or to certain individuals or
groups. AGE has the right to reject any request or application to open
a CCA and to terminate a CCA for any reason. The following pages describe
the principal attributes of each CCA component.

This description of the CCA program is a brochure and is not a
prospectus, and must be accompanied by the current prospectus of the
selected Fund. The Prospectus describes in detail the Fund's objective,
investment policies, risks, fees and other matters of interest. Please
read the attached prospectus carefully before you invest or send money.

<PAGE>

(the phrase "This brochure is not part of the prospectus." appears at the
bottom of each of these pages)

Securities Account
The Securities Account is a conventional account maintained by AGE,
which the client may use to purchase and sell securities. AGE will
maintain the Securities Account pursuant to the rules and regulations of
the Securities and Exchange Commission, the Board of Governors of the
Federal Reserve System, the New York Stock Exchange and the National
Association of Securities Dealers, Inc., as well as the policies of AGE.
The client pays AGE's normal brokerage fees for securities transactions
in the Securities Account. If securities transactions are to occur on
margin, the client must sign an AGE Client's Agreement. Certain
additional account documents may be required to open a Securities Account
depending on the type of entity and/or type of transactions to occur.
Each month in which there is activity in the Securities Account, other
than money market fund dividends, AGE will send a statement detailing
cash, securities and Fund transactions in the Securities Account during
the preceding period. If no activity other than money market fund
dividends occurs, AGE will send a statement at least quarterly. Neither
AGE nor the Fund must send confirmations on each transaction in which Fund
shares are purchased or redeemed for the CCA. The statement will describe
the transactions in the Fund during the preceding period. You should
carefully review the statement and bring any discrepancies immediately to
the attention of AGE.

Each client will have the same protection with respect to the
Securities Account as any other Securities Account client, including up
to $500,000 from the Securities Investor Protection Corporation. In
addition, each client has an extra $24.5 million worth of coverage on all
securities held by AGE in a CCA, including Fund shares.

The Fund
Upon meeting the requirement of $2,500 in free cash balance with no
unsettled transactions in the Securities Account, AGE will automatically
invest the initial free cash balance and subsequent free cash balances of
$250 or more on the first business day of the following week in shares of
Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial
Government Trust, Centennial America Fund, L.P.* or Daily Cash
Accumulation Fund, Inc.+ depending on which Fund the investor selects as
the primary investment. In addition, residents of California and New York
are offered the option of investing in a state tax-exempt fund for their
particular state. AGE may offer additional funds through CCA in the
future. An investor may change the primary Fund by notifying his or her
AGE investment broker.

[FN]
________________
*Centennial America Fund, L.P. is available only to foreign investors.

+Daily Cash Accumulation Fund, Inc. is not available for accounts
established on or after Dec. 6, 1991.

Each Fund declares dividends daily, which post monthly to the
Securities Account in the form of additional shares. For further
information, see "How to Buy Shares" and "Dividends, Distributions and Tax
Information" or "Distributions and Taxes" in the accompanying Fund
prospectus.

The Fund's distributor partially reimburses AGE for costs incurred
in distributing Fund shares.

Automatic Purchase Orders
After the initial investment of $2,500 or more, AGE will
automatically invest at least once a week free cash balances of $250 or
more resulting from sales, additional cash deposits and interest or
dividends in the Securities Account in Fund shares designated as the
primary Fund at their current net asset value. The purchase price for
shares will be the net asset value per share determined after the Fund's
receipt of an Automatic Purchase Order. At any time, the client may
withdraw uninvested free cash balances from the Securities Account by
notifying the AGE investment broker. Dividends are earned on the day
following investment through the date of request for redemption.

Manual Purchase Orders
Free cash balances in excess of $10,000 may be invested by manual
purchase order request on the day after funds become available for
withdrawal. Manual purchase orders entered prior to 2 p.m. Central time
(10 a.m. Central time on Friday) will be completed at 3 p.m. Central time
on the day of request, provided the Federal Reserve wire system is in
operation.

New cash deposits in excess of $10,000 may be invested by manual
purchase order two business days after receipt providing the deposit is
received prior to the local AGE branch cashiering deadline. Dividends are
earned on the day following investment through the date of request for
redemption.

Automatic Redemption Orders
Fund shares will be redeemed at net asset value to satisfy debit
balances in the Securities Account. Redemption for payment of a
securities purchase will be effected at net asset value at 3 p.m. Central
time on the day preceding settlement date of the purchase. Redemption for
other activity resulting in a net debit balance in the Securities Account
will be effected at net asset value at 3 p.m. Central time on the day
after the entry is posted to the Securities Account. Dividends are earned
on the day following investment through the date of request for
redemption.

To override an Automatic Redemption Order, a free cash balance
sufficient to cover the amount of the Automatic Redemption Order must be
entered to the Securities Account before the AGE cashiering deadline two
days preceding settlement date of securities purchases, or on the day of
posting other entries generating a debit balance.

AGE reserves the right to redeem all Fund shares if the net asset
value of the shares in a CCA amounts to less than $250.

Manual Redemption
Fund shares can be redeemed at net asset value on the shareholder's
request on any business day. Proceeds from redemption orders entered
before 2 p.m. Central time will be available for withdrawal from the
Securities Account on the next business day on which the Federal Reserve
wire system is in operation.

Check Writing
A client may write checks in amounts of $250 or more if checks are
requested by a signed separate Check Writing Privilege Authorization and
Specimen Signature Form. The amount available for checks will be the
total net asset value of Fund shares in the CCA. AGE will automatically
redeem Fund shares to pay the bank through which checks are paid on behalf
of the account.

Termination
A client may terminate the CCA at any time by notifying AGE in
writing. However, the principals of the account will remain responsible
for any charges to the CCA arising before or after termination. AGE
reserves the right to terminate the CCA at any time with or without
notice.

<PAGE>

A.G. Edwards
Investments Since 1887

Total Asset

The One Account for Today's Investor

Centennial California Tax Exempt Trust

1995 Prospectus

Managed and Distributed by

Centennial Asset
Management Corporation

<PAGE>

Total Asset Account

Summary Description

The Total Asset Account Program (TAA) of A.G. Edwards & Sons, Inc.
(AGE) offers integrated financial services by linking together three
components:

(1) the Securities Account, which is a conventional AGE securities
margin account;

(2) the Investment Fund, which consists of your choice of no-load
money market funds (the Funds); and

(3) the VISA(R) Account, which is a VISA check/card account maintained
by Bank One, N.A., Columbus, Ohio (Bank One).

Free cash balances (i.e., any cash that may be withdrawn or
transferred out of the Securities Account without creating an interest
charge or a need for additional margin) held in the Securities Account of
persons establishing a TAA are invested in either Centennial Money Market
Trust, a no-load money market fund (the Money Market Trust), Centennial
Tax Exempt Trust, a no-load, short-term tax-exempt securities fund (the
Tax Exempt Trust), Centennial Government Trust, a no-load, short-term
government securities fund (the Government Trust) or in Centennial America
Fund, L.P., a no-load government securities money market fund for foreign
investors. In addition, residents of California and New York are offered
the option of investing in Centennial California Tax Exempt Trust and
Centennial New York Tax Exempt Trust, respectively (the State Tax Exempt
Funds).

AGE charges a fee for the TAA services to partially defray the costs
of maintaining and servicing the TAA, including Bank One's processing
charges that AGE will pay. AGE will make no commission or other charge
in connection with the purchase or redemption of Fund shares. The Funds
pay investment advisory fees and incur certain administrative and
operational expenses, as do other mutual funds. The client will pay AGE's
normal brokerage fees for securities transactions in the Securities
Account and will pay interest on margin loans made in the Account. In
addition, Bank One may impose certain charges in the VISA Account.

An AGE client may subscribe to the TAA financial service by
depositing a minimum of $10,000 in any combination of cash and/or
securities in the Securities Account. AGE may alter or waive conditions
on which a TAA may be established, either with respect to services
generally or to special groups or limited categories of individuals. AGE
may change the annual service fee at any time on 10 days' notice to
participants. Both AGE and Bank One have the right to reject any
application to open a TAA and to terminate a TAA for any reason. The
following pages describe the principal attributes of each TAA component.

This description of the TAA is a brochure and is not a prospectus,
and must be accompanied by the current prospectus of Centennial Money
Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust,
Centennial America Fund, L.P., or the State Tax Exempt Funds. The
Prospectus describes in detail the Fund's objective, investment policies,
risks, fees and other matters of interest. Please read the attached
prospectus carefully before you invest or send money.

<PAGE>

(the phrase "This brochure is not part of the prospectus." appears at the
bottom of each of these pages)

Securities Account
The Securities Account, the primary component of the TAA, is a
conventional margin account maintained by AGE, which the client may use
to purchase and sell securities and options on margin or on a fully paid
basis. All dividends and interest accruing and paid on these securities
will be held pending use in accordance with the agreements between AGE and
the client. The interest rates charged for margin loans range from 3/4%
to 2 1/2% above the rate charged by New York City banks to brokers to
finance clients' margin transactions. The maximum loan value of
marginable common stocks is presently 50% of their current value. AGE
will maintain the Securities Account in accordance with and subject to all
then applicable federal and state laws and rules and regulations
promulgated thereunder; the constitution, rules, customs and usages of the
applicable exchange, association, market or clearinghouse; and the customs
and usages of those transacting business on such exchange, market or
clearinghouse. As in the case of a regular margin account, the client
pays AGE's normal brokerage fees for securities transactions in the
Securities Account. Each client will have the same protection with
respect to the Securities Account as any other Securities Account client,
including up to $500,000 from the Securities Investor Protection
Corporation. In addition, each client has an extra $24.5 million worth
of coverage on all securities held by AGE in a TAA, including Fund shares.

The Funds
AGE will automatically invest free cash balances in the Securities
Account in shares of the Money Market Trust, the Tax Exempt Trust, the
Government Trust, Centennial America Fund, L.P.,* or the appropriate State
Tax Exempt Fund, depending on which Fund the investor selects as the
primary investment. Free cash balances will be invested automatically no
less frequently than weekly in shares of the appropriate Fund at its net
asset value as described below. Dividends will be declared daily on Fund
shares and will be reinvested monthly in additional shares. The investor
may change the primary Fund at any time. The client understands that an
investment in the Fund is not equivalent to a deposit. Although the Fund
strives to maintain a net asset of $1 per share, the value of a
shareholder's investment may fluctuate as with any investment in
securities. Certificates of the Fund will not be physically issued. For
further information, see "How to Buy Shares" and "Dividends, Distributions
and Tax Information" or "Distributions and Taxes" in the accompanying Fund
prospectus. The Funds' distributor partially reimburses AGE for costs
incurred in distributing Fund shares.

[FN]
__________________
*Centennial America Fund, L.P. is only available to foreign investors.

The TAA permits a client to use free cash balances effectively by
having them promptly invested in Fund shares, ensuring full investment of
such funds pending other investments in the Securities Account or payments
of charges incurred in the VISA check/card account. Because AGE may
advance funds on a client's behalf to purchase Fund shares and earn
dividends prior to final collection of checks deposited to the client's
account, it is understood AGE may withhold access to redemption proceeds
of Fund shares purchased with advanced funds until it is satisfied that
all checks deposited to the client's account have been collected. The
Federal Deposit Insurance Corporation, or any other governmental insurance
agency, does not insure the value of Fund shares. However, Fund shares,
like shares of any public issuer held in a brokerage account, are subject
to the Securities Investor Protection Act, which protects brokerage
clients from losses up to $500,000 arising from the insolvency of their
brokerage firm. AGE also provides an additional $24.5 million worth of
account protection through a special policy with a major independent
insurance carrier.

Fund shares will be redeemed automatically as necessary to satisfy
debit balances in the Securities Account or amounts owing in the VISA
check/card account and may also be redeemed at the client's request if not
required to satisfy such debit balances as described below.

AGE will make no commission or other charge with respect to the
purchase or redemption of Fund shares. The Funds have been created as
component parts of the TAA and other investment programs and, in view of
the service fee charged TAA participants, investors who seek solely to
invest cash in a money market fund or a short-term, tax-exempt or a
government securities fund and do not wish to use the automatic investment
and other special features of the TAA, should consider other money market,
tax-exempt or government securities funds offered directly to the public
as a more suitable investment. Centennial Asset Management Corporation,
the distributor of the Funds, may add additional investment funds as
components of the TAA in the future.

The Funds constitute only one component of the TAA. Investors should
read the prospectuses of the Funds in conjunction with the TAA Agreement,
which is available from AGE and must be signed by TAA participants.

Automatic Purchases
Once AGE and Bank One accept a TAA, free cash balances at the end of
each week will be invested automatically on the first business day of the
following week in the primary Fund selected by the investor. Free cash
balances arising from certain transactions will be invested automatically
in Fund shares prior to the previously mentioned automatic investment; the
free cash balances from those transactions are as follows: (a) free cash
balances in any amount of $1 or more arising from the sale of securities
will be invested on the next business day following receipt of the
proceeds; and (b) free cash balances arising from a cash deposit or from
other nondividend or interest entries of $500 or more on any one day will
be invested on the next business day following the deposit or entry unless
the deposit is made after the local AGE branch cashiering deadline.
Dividends and interest totaling $500 or more on any one day will be
invested on the next business day. Shares are credited with the dividend
earned on the date of purchase for shares purchased by noon Eastern time
that day. At any time, the client may withdraw any uninvested free cash
balance from the Securities Account by notifying the investment broker by
letter or telephone. For further information, see "How to Buy Shares" and
"Dividends, Distributions and Tax Information" in the accompanying Fund
prospectus.

Redemption of Shares
Each Fund must redeem for cash all full and fractional shares of the
Fund subject to the conditions described in its prospectus. The
redemption price is the net asset value per share next determined after
receipt by the transfer agent of proper notice of redemption, in
accordance with either the automatic or manual procedures described below.
If the transfer agent receives the notice from AGE before the
determination of net asset value at noon Eastern time on any day that the
New York Stock Exchange and the Fund's custodian bank are open for
business, the redemption will be effective on that day. Payment of the
redemption proceeds will be made after noon Eastern time on the day the
redemption becomes effective. If AGE receives the notice after noon
Eastern time, the redemption in the TAA will be effective on the next
business day and payment will be made on that day. If an investor redeems
all of the Fund shares in the TAA at any time during a month, the Fund
will pay all dividends accrued to the date of redemption together with the
redemption proceeds. Dividends in TAAs are earned through the day prior
to redemption. For further information, see "How to Redeem Shares" in the
accompanying Fund prospectus.

Automatic Redemptions
Whenever a debit balance arises in the Securities Account created by
activity therein or created by VISA card purchases, cash advances, or
checks written against the VISA Account, AGE will automatically effect
redemptions. Daily debit balances will be satisfied first by any free
cash balances and second by the redemption of Fund shares. Margin loans
will be used to satisfy debits remaining in either the Securities Account
or the VISA Account after the use of the free cash balances and the
redemption of all Fund shares, and the investor may not purchase shares
until all debits and margin loans are satisfied. If Fund shares are
redeemed to satisfy these debits, the investor earns dividends up to the
day AGE makes payment for the TAA.

VISA Account
Bank One, with which AGE has entered into an agreement for this
purpose, may issue a VISA card and checks to each person who is a TAA
client other than under certain accounts described below under "Group
Plans and Special Accounts." The TAA client may use the VISA card to
purchase merchandise or services at participating establishments or to
obtain cash advances (which a bank may limit to $5,000 per account per
day) from any participating bank or its branch. Any of 362,000 worldwide
bank branches in the VISA system, as well as all establishments accepting
the VISA card, will honor the VISA card. Presently, more than 10 million
stores, restaurants and service outlets worldwide honor the VISA card.
You may also obtain cash advances using your VISA card and personal
identification number (PIN) from automated teller machines (ATMs)
displaying the VISA or PLUS(R) logos. A $1 charge is assessed for each ATM
transaction or cash advance. The TAA client may draw checks on the VISA
Account for any purpose. Bank One will impose its normal charges for stop
payment orders and checks that are returned because they have exceeded the
authorization limit described below or for special, investigative or
research services. If a client wishes to stop payment on a TAA check,
verbal requests must be confirmed in writing to AGE and the bank within
14 days, and the request will not bind AGE or the bank for a period of
four business days after the initial request. Neither AGE nor the bank
will incur any liability for honoring a check within four business days
of the client request. The client understands a stop payment fee may be
charged for this special request

Neither the VISA card nor the Bank One checks may be used to purchase
securities in the Securities Account or Fund shares. The maximum amount
available (authorization limit) for VISA purchases, cash advances and Bank
One checking for a client's TAA is the total of (a) any uninvested free
cash balances in the Securities Account, (b) the net asset value of the
Fund shares held for the client's TAA, and (c) the available margin loan
value of securities in the Securities Account. Since the authorization
limit depends on the status of cleared checks deposited to the Securities
Account, securities prices, as well as changes in the debit balance in the
Securities Account and the VISA Account, will fluctuate from day to day.
The authorization limit is instantaneously reduced at the time Bank One
is notified of the use of the VISA card, not at the time the applicable
sales draft or cash advance draft is paid. Fund shares are not redeemed,
however, until the item is presented to Bank One for payment and the
request is submitted to AGE for redemption.

Unlike standard credit card procedures under which bills are rendered
monthly and free credit may be extended for a period of up to 25 days
thereafter, Bank One will notify AGE daily of any charges presented
against the VISA Account, whether by use of the VISA card or checks. AGE
will pay Bank One on behalf of its clients from the TAA on the day AGE
receives notice of the debit. AGE will pay for charges in the following
order of priority: first, from free cash balances, if any, held in the
Securities Account pending investment; second, from the proceeds of
redemption of Fund shares; and third (if those sources prove
insufficient), from margin loans made to the client by AGE within the
available margin loan value of the securities in the Securities Account.
AGE will charge interest on any such margin loans. This system provides
for an efficient use of funds since the client will not incur the cost of
a margin loan until all free cash balances and funds invested in Fund
shares are fully used. If charges in an investor's VISA Account are
satisfied by redemption of Fund shares, ownership of the shares will
transfer to AGE as of the date it pays Bank One on behalf of the investor,
and AGE will retain dividends accruing on the shares between the date of
the payment and the date of redemption. Clients have no unsecured
borrowing privileges in the VISA Account. A client participating in the
TAA program must agree not to exceed the authorization limit. Any
overdraft will be immediately payable by the client to Bank One, which
will impose a charge at an annual rate not to exceed 25% for the time the
overdraft is outstanding.

Clients who subscribe to a TAA will receive a transaction statement
from AGE that will detail all TAA transactions during the preceding month.
The statement will describe securities and options bought and sold in the
Securities Account, whether on margin or on a fully paid basis, any other
type of transaction effected in the Securities Account, margin interest
charges, if any, Fund shares that were purchased or redeemed, and
dividends on Fund shares. The statement will also show purchases of
merchandise or services with the VISA card, checks drawn against the VISA
Account and cash advances. The Fund will not send confirmations for
automatic purchases and redemption of fund shares.

A client may subscribe to the TAA with the minimum amount of $10,000
in any combination of gross market value of securities, marginable or
nonmarginable, and/or cash. To subscribe, clients must execute a TAA
Agreement with AGE, which includes a Checking Account/VISA Account
Application. AGE, in its discretion, may waive such conditions in special
instances, certain of which are described below under "Group Plans and
Special Accounts." Both AGE and Bank One may terminate any client's TAA
for any reason at any time. AGE may terminate a client's TAA if, at the
expiration date of the client's VISA card, the Securities Account does not
have a value of at least $5,000, including any Fund shares. New York
Stock Exchange rules require that margin accounts maintain a minimum of
$2,000 of equity. Clients may be prohibited from maintaining both a TAA
and a non-TAA account with AGE.

Clients subscribing to the TAA may be liable for the unauthorized use
of their VISA card in an amount up to $50. The owner of the VISA card
will not be liable for any unauthorized use that occurs after Bank One has
been notified verbally or in writing of loss, theft or possible
unauthorized use of the card. If Fund shares are redeemed due to the
unauthorized use of the VISA card, the shares will be reinstated as if
never sold and AGE will indemnify the Fund against any losses caused. If
a VISA card is lost or stolen, the TAA client should report the loss
immediately by calling the TAA Service Center at (800) 677-8380 during
normal business hours or by placing a collect call to Bank One at (614)
248-4242 after business hours.

Group Plans and Special Accounts
AGE may modify the conditions of the TAA for certain group plans and
limited categories of individuals, typically by providing for a cash
securities account instead of a margin account or by providing for limited
use of the VISA Account. In the case of group or special accounts, the
regular minimum may be waived. Such participants may be charged a higher
service fee than that charged to other participants in the program.

General
Investors should be aware that the checking feature of the TAA is
intended to provide clients with easy access to the assets in their
accounts and that the TAA is not a bank account.

From time to time, certain state administrative agencies have raised
questions whether the operation of a TAA-type program constitutes banking
under the laws of their state. In addition, legislation has been proposed
in certain states, which, if enacted, could require a modification of the
TAA in those states. Neither AGE nor any of the Funds is a bank and they
believe that the operation of the TAA does not constitute banking under
the laws of any state. Final adverse rulings in any state that the TAA
constitutes unauthorized banking therein or the adoption of legislation
by any state affecting the TAA could force the Funds to liquidate shares
for residents in such state or to cease offering their shares in such
state as part of the TAA.

Total Asset Account is proprietary to A.G. Edwards & Sons, Inc.

Investors should carefully read the accompanying Fund prospectus.

<PAGE>

Centennial
California Tax Exempt Trust

3410 South Galena Street, Denver, Colorado 80231
1-800-525-9310

Centennial California Tax Exempt Trust (the "Trust") is a no-load
money market mutual fund with the investment objective of seeking the
maximum current interest income exempt from Federal and California
personal income taxes for individual investors as is consistent with
preservation of capital. The Trust seeks to achieve this objective by
investing in municipal obligations meeting specified quality standards,
the income from which is tax-exempt as described above. Normally, the
Trust will invest at least 80% of its assets in U.S. dollar-denominated,
high quality tax-exempt municipal obligations. See "The Trust and Its
Investment Policies."

An investment in the Trust is neither insured nor guaranteed by the
U.S. Government. Shares of the Trust 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. While the Trust seeks to maintain a stable net asset
value of $1.00 per share, there can be no assurance that the Trust will
be able to do so. See "The Trust and Its Investment Policies."

Shares of the Trust may be purchased directly from dealers having
sales agreements with the Trust's Distributor and also are offered to
participants in Automatic Purchase and Redemption Programs (the
"Programs") established by certain brokerage firms with which the Trust's
Distributor has entered into agreements for that purpose. See "How to Buy
Shares" in the Prospectus. Program participants should also read the
description of the Program provided by their broker.

This Prospectus sets forth concisely information about the Trust that
a prospective investor should know before investing. A Statement of
Additional Information about the Trust (the "Additional Statement") dated
November 1, 1994, has been filed with the Securities and Exchange
Commission ("SEC") and is available without charge upon written request
to Shareholder Services, Inc. ("the Transfer Agent"), P.O. Box 5143,
Denver, Colorado 80217-5143 or by calling the toll-free number shown
above. The Additional Statement (which is incorporated by reference in
its entirety in this Prospectus) contains more detailed information about
the Trust and its management.

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

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

This Prospectus is effective November 1, 1994.

<PAGE>

Table of Contents

Page
Trust Expenses. . . . . . . . . . . . . . . . . .2
Financial Highlights. . . . . . . . . . . . . . .3
Yield Information . . . . . . . . . . . . . . . .4
The Trust and Its Investment Policies . . . . . .4
Investment Restrictions . . . . . . . . . . . . .7
Management of the Trust . . . . . . . . . . . . .8
How To Buy Shares
Purchases Through Automatic Purchase
and Redemption Programs . . . . . . . . . .9
Direct Purchases . . . . . . . . . . . . . . 10
Automatic Investment Plans . . . . . . . . . 10
General. . . . . . . . . . . . . . . . . . . 10
Service Plan . . . . . . . . . . . . . . . . 10

How To Redeem Shares. . . . . . . . . . . . . . 11
Program Participants . . . . . . . . . . . . 11
Shares of the Trust Owned Directly . . . . . 11
Regular Redemption Procedure . . . . . . . . 11
Expedited Redemption Procedure . . . . . . . 11
Checkwriting . . . . . . . . . . . . . . . . 12
Automatic Withdrawal Plan. . . . . . . . . . 12
General Information on Redemptions . . . . . 12
Exchanges of Shares . . . . . . . . . . . . . . 13
Dividends and Taxes . . . . . . . . . . . . . . 15
Additional Information. . . . . . . . . . . . . 17

<PAGE>

Trust Expenses

The following table sets forth: (1) the fees that an investor in the
Trust might pay, and (2) the expenses paid by the Trust during the fiscal
year ended June 30, 1994.

Shareholder Transaction Expenses

Maximum Sales Charge on Purchases
(as a percentage of offering price) . . . . . . .None
Sales Charge on Reinvested Dividends. . . . . . . .None
Redemption Fees . . . . . . . . . . . . . . . . . .None
Exchange Fee. . . . . . . . . . . . . . . . . . . $5.00

Annual Trust Operating Expenses (as a percentage of
average net assets)

Management Fees (after expense assumption). . . . 0.43%
12b-1 (Distribution Plan) Fees. . . . . . . . . . 0.20%
Other Expenses. . . . . . . . . . . . . . . . . . 0.17%
Total Trust Operating Expenses
(after expense assumption). . . . . . . . . . 0.80%

The purpose of this table is to assist an investor in understanding
the various costs and expenses that an investor in the Trust will bear
directly (shareholder transaction expenses) or indirectly (annual trust
operating expenses). "Other Expenses" includes such expenses as custodial
and transfer agent fees, audit, legal and other business operating
expenses, but excludes extraordinary expenses. The Annual Trust Operating
Expenses shown are net of a voluntary expense assumption undertaking by
the Trust's investment manager, Centennial Asset Management Corporation
(the "Manager"). Without such assumption, "Management Fees" and "Total
Trust Operating Expenses" would have been 0.50% and 0.87% of average net
assets, respectively. The expense assumption undertaking is described in
"Investment Management Services" in the Additional Statement and may be
withdrawn or amended at any time. For further details, see the Trust's
Financial Statements in the Additional Statement.

The following example applies the above-stated expenses (after
expense assumption) to a hypothetical $1,000 investment in shares of the
Trust over the time periods shown below, assuming a 5% annual rate of
return on the investment and also assuming that the shares are redeemed
at the end of each stated period. The amounts shown below are the
cumulative costs of such hypothetical $1,000 investment for the periods
shown.

1 year 3 years 5 years 10 years

$8 $26 $44 $99

This example should not be considered a representation of past or
future expenses or performance. Expenses are subject to change and actual
performance and expenses may be less or greater than those illustrated
above.

<PAGE>

Financial Highlights
Selected data for a share of the Trust outstanding throughout each period

The information in the table below has been audited by Deloitte &
Touche LLP, independent auditors, whose report on the financial statements
of the Trust for the fiscal year ended June 30, 1994 is included in the
Additional Statement.

YEAR ENDED JUNE 30,
--------------------------------------------
1994 1993 1992 1991 1990(1)
-------- ------ ------ ------ --------
<S> <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
Income from investment operations -
net investment income and net realized gain
on investments ................................................. .02 .02 .03 .04 .003
Dividends and distributions to shareholders ...................... (.02) (.02) (.03) (.04) (.003)
------- ------- ------- ------- -------
Net asset value, end of period ................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......................... $60,376 $58,079 $48,483 $32,337 $2,018
Average net assets (in thousands) ................................ $65,520 $56,082 $40,684 $16,150 $1,914
Number of shares outstanding at end of period
(in thousands) ................................................. 60,376 58,076 48,484 32,337 2,018
Ratios to average net assets:
Net investment income .......................................... 1.79% 1.90% 3.13% 4.09% 6.29%(2)
Expenses, before voluntary assumption by the Manager ........... .87% .86% .91% 1.09% 2.53%(2)
Expenses, net of voluntary assumption by the Manager ........... .80% .80% .80% .84% .90%(2)

</TABLE>

1. For the period from June 12, 1990 (commencement of operations) to June
30, 1990.
2. Annualized.

<PAGE>

Yield Information

From time to time, the "yield," "tax-equivalent yield" and
"compounded effective yield" of an investment in the Trust may be
advertised. All yield figures are based on historical earnings per share
and are not intended to indicate future performance. The "yield" of the
Trust is the income generated by an investment in the Trust over a seven-
day period, which is then "annualized." In annualizing, the amount of
income generated by the investment during that seven days is assumed to
be generated each week over a 52-week period, and is shown as a percentage
of the investment. The "compounded effective yield" is calculated
similarly, but the annualized income earned by an investment in the Trust
is assumed to be reinvested. The "compounded effective yield" will be
slightly higher than the yield because of the effect of the assumed
reinvestment. The Trust's "tax-equivalent yield" is calculated by
dividing that portion of the Trust's "yield" (calculated as described
above) which is tax-exempt by one minus a stated income tax rate and
adding the result to the portion (if any) of the Trust's yield that is not
tax-exempt. The "tax-equivalent yield" is then compounded and annualized
in the same manner as the Trust's yield. See "Yield Information" in the
Additional Statement for further information on the methods of calculating
these yields. From time to time the Manager may voluntarily assume a
portion of the Trust's expenses (which may include the management fee),
thereby lowering the overall expense ratio per share and increasing the
Trust's yield during the time such expenses are assumed.

The Trust And Its Investment Policies

The Trust is a no-load tax-exempt money market fund. It is an open-
end, non-diversified, management investment company organized as a
Massachusetts business trust on August 7, 1989. The Trust's investment
objective is to seek the maximum current interest income exempt from
Federal and California personal income taxes for individual investors as
is consistent with preservation of capital. The Trust's shares may be
purchased at their net asset value, which will remain fixed at $1.00 per
share except under extraordinary circumstances (see "Determination of Net
Asset Value Per Share" in the Additional Statement for further
information). There can be no assurance, however, that the Trust's net
asset value will not vary or that the Trust will achieve its investment
objective. The value of Trust shares is not insured or guaranteed by any
government agency. However, shares held in brokerage accounts may be
eligible for coverage by the Securities Investor Protection Corporation
for losses arising from the insolvency of the brokerage firm. The Trust's
investment policies and practices are not "fundamental" policies (as
defined below) unless a particular policy is identified as fundamental.
The Board may change non-fundamental investment policies without
shareholder approval.

In seeking its objective, the Trust invests in tax-exempt securities,
consisting of municipal bonds, municipal notes (which include tax
anticipation notes, bond anticipation notes, revenue anticipation notes,
construction loan notes and other short-term loans), tax-exempt commercial
paper and other debt obligations, which include variable rate demand notes
and put bonds issued by or on behalf of the State of California, other
states, and the District of Columbia, their political subdivisions, or any
commonwealth or territory of the United States, or their respective
agencies, instrumentalities or authorities, the interest from which is not
subject to Federal individual income tax, in the opinion of bond counsel
to the respective issuer (collectively, these are referred to as
"Municipal Securities"), and in Municipal Securities the interest from
which is not subject to California personal income tax in the opinion of
bond counsel to the respective issuer (collectively, these are referred
to as "California Municipal Securities"). The Trust may also purchase
Municipal Securities with demand features that meet the requirements of
Rule 2a-7 (discussed below). All Municipal Securities in which the Trust
invests must have, or, pursuant to regulations adopted by the SEC, be
deemed to have, remaining maturities of one year or less at the date the
Trust purchases them.

Under normal market conditions, the Trust attempts to invest 100% of
its assets in Municipal Securities and at least 65% of its assets in
California Municipal Securities, and, as a fundamental policy, the Trust
will make no investment that will reduce the portion of its total assets
that are invested in Municipal Securities to less than 80%. The balance
of the Trust's assets may be invested in investments the income from which
may be taxable, including: (i) repurchase agreements (explained below);
(ii) Municipal Securities issued to benefit a private user ("Private
Activity Municipal Securities"), the interest from which may be subject
to Federal alternative minimum tax (see "Dividends and Taxes" below and
"Private Activity Municipal Securities" in the Additional Statement); and
(iii) certain temporary investments defined below in "Temporary
Investments." The Trust may hold Temporary Investments pending the
investment of proceeds from the sale of Trust shares or portfolio
securities, pending settlement of Municipal Securities purchases or to
meet anticipated redemptions. Normally, the Trust will not invest more
than 20% of its total assets in Private Activity Municipal Securities and
the taxable investments described above. No independent investigation has
been made by the Manager as to the users of proceeds of such offerings or
the application of such proceeds. To the extent the Trust receives income
from taxable investments, it may not achieve its investment objective.
Further information about the Trust's investment policies and restrictions
is set forth in the Statement of Additional Information.

Ratings of Securities.

Under Rule 2a-7 of the Investment Company Act of 1940 (the
"Investment Company Act"), the Trust uses the amortized cost method to
value its portfolio securities to determine the Trust's net asset value
per share. Rule 2a-7 places restrictions on a money market fund's
investments. Under the Rule, the Trust may purchase only those securities
that the Trust's Board of Trustees has determined have minimal credit
risks and are "Eligible Securities." An "Eligible Security" is (a) one
that has received a rating in one of the two highest short-term rating
categories by any two "nationally-recognized statistical rating
organizations" (as defined in the Rule) ("Rating Organizations"), or, if
only one Rating Organization has rated that security, by that Rating
Organization, or (b) an unrated security that is judged by the Manager to
be of comparable quality to investments that are "Eligible Securities"
rated by Rating Organizations.

The Rule permits the Trust to purchase "First Tier Securities," which
are Eligible Securities rated in the highest rating category for short-
term debt obligations by at least two Rating Organizations, or, if only
one Rating Organization has rated a particular security, by that Rating
Organization, or comparable unrated securities. Under the Rule, the Trust
may also invest in "Second Tier Securities," which are Eligible Securities
that are not "First Tier Securities." Additionally, under Rule 2a-7, the
Trust must maintain a dollar-weighted average portfolio maturity of no
more than 90 days. Per the Trust's fundamental investment restrictions
(which may be changed only by shareholder vote) the maturity of any single
portfolio investment may not exceed one year, which is more restrictive
than the provisions of Rule 2a-7. Rule 2a-7 restricts the maturity of
portfolio securities to 397 days or less. The Trust's Board has adopted
procedures under Rule 2a-7 pursuant to which the Board has delegated to
the Manager certain responsibilities, in accordance with that Rule, of
conforming the Trust's investments with the requirements of the Rule and
those procedures.

Appendix A of the Additional Statement contains information on the
rating categories of Rating Organizations. Ratings at the time of
purchase will determine whether securities may be acquired under the above
restrictions. Subsequent downgrades in ratings may require reassessment
of the credit risk presented by a security and may require its sale. The
rating restrictions described in this Prospectus do not apply to banks in
which the Trust's cash is kept.

Floating Rate/Variable Rate Obligations

Some of the Municipal Securities the Trust may purchase may have
variable or floating interest rates. Variable rates are adjustable at
stated periodic intervals of no more than one year. Floating rates are
automatically adjusted according to a specified market rate for such
investments, such as the PSA Municipal Swap Index or the J.J. Kenney
Index. The Trust may purchase these obligations if they have a remaining
maturity of one year or less; if their maturity is greater than one year,
they may be purchased if they have a demand feature that permits the Trust
to recover the principal amount of the underlying security at specified
intervals not exceeding one year and on not more than 30 days' notice.
The Manager may determine that an unrated floating rate or variable rate
demand obligation meets the Trust's quality standards solely by reason of
being backed by a letter of credit or guarantee issued by a bank that
meets the Trust's quality standards. However, the letter of credit or
bank guarantee must be rated or meet the other requirements of Rule 2a-7.

Municipal Lease Obligations

The Trust may invest in certificates of participation, which are tax-
exempt obligations that evidence the holder's right to share in lease,
installment loan or other financing payments by a public entity. Projects
financed with certificates of participation generally are not subject to
state constitutional debt limitations or other statutory requirements that
may be applicable to Municipal Securities. Payments by the public entity
on the obligation underlying the certificates are derived from available
revenue sources; such revenue may be diverted to the funding of other
municipal service projects. Payments of interest and/or principal with
respect to the certificates are not guaranteed and do not constitute an
obligation of the state or any of its political subdivisions. While some
municipal lease securities may be deemed to be "illiquid" securities (the
purchase of which would be limited as described below in "Illiquid and
Restricted Securities"), from time to time the Trust may invest more than
5% of its net assets in municipal lease obligations that the Manager has
determined to be liquid under guidelines set by the Trust's Board of
Trustees.

Puts and Stand-By Commitments

For liquidity purposes, the Trust may purchase Municipal Securities
with puts from banks, brokers, dealers or other institutions. The put
gives the Trust the right to sell the underlying security within a
specified time at a stated price. Under a stand-by commitment, a dealer
agrees to purchase, at the Trust's option, specified Municipal Securities
at a stated price on same-day settlement. The aggregate price of a
security subject to a put or a stand-by commitment may be higher than the
price which otherwise would be paid for the security without such put or
stand-by commitment, thereby increasing the cost of such security and
reducing its yield.

When-Issued or Delayed-Delivery Securities

The Trust may purchase Municipal Securities on a "when-issued" basis,
and may purchase or sell such securities on a "delayed delivery" basis.
"When-issued" and "delayed delivery" refer to securities whose terms and
indenture are available and for which a market exists, but which are not
available for immediate delivery. The Trust does not intend to make such
purchases for speculative purposes. During the period between the
purchase and settlement, no payment is made for the security and no
interest accrues to the buyer from the investment.

Non-diversification

The Trust is a "non-diversified" investment company under the
Investment Company Act. As a result, it may invest its assets in a single
issuer or limited number of issuers without limitation by the Investment
Company Act. However, the Trust intends to conduct its operations so as
to qualify as a "regulated investment company" for purposes of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"),
pursuant to which: (1) not more than 25% of the market value of the
Trust's total assets will be invested in the securities of a single
issuer, and (2) with respect to 50% of the market value of its total
assets, not more than 5% of the market value of its total assets may be
invested in the securities of a single issuer and the Trust must not own
more than 10% of the outstanding voting securities of a single issuer.
An investment in the Trust therefore will entail greater risk than an
investment in a diversified investment company because a higher percentage
of investments among fewer issuers may result in greater fluctuation in
the total market value of the Trust's portfolio, and economic, political
or regulatory developments may have a greater impact on the value of the
Trust's portfolio than would be the case if the portfolio were diversified
among more issuers.

Repurchase Agreements

The Trust may acquire securities subject to repurchase agreements to
generate income and for liquidity purposes to meet anticipated
redemptions, or pending the investment of proceeds from sales of Trust
shares or settlement of purchases of portfolio investments. The Trust's
repurchase agreements will be fully collateralized. However, if the
seller of the securities fails to pay the agreed-upon repurchase price on
the delivery date, the Trust's risks may include any costs of disposing
of the collateral for the agreement, and losses that might result from any
delays in foreclosing on the collateral. Income earned on repurchase
transactions is not tax-exempt and, accordingly, under normal market
conditions, the Trust will limit its investments in repurchase
transactions to 20% of its total assets. When the Trust assumes a
temporary defensive position, there is no limit on the amount of its
assets that may be subject to repurchase agreements maturing in seven days
or less.

Illiquid and Restricted Securities

Under the policies and procedures established by the Trust's Board
of Trustees, the Manager determines the liquidity of the Trust's
investments. Investments may be illiquid because of the absence of an
active trading market, making it difficult to value them or dispose of
them promptly at an acceptable price. A restricted security is one that
has a contractual restriction on its resale or which cannot be sold
publicly until it is registered under the Securities Act of 1933. The
Trust will not invest more than 10% of its net assets in illiquid or
restricted securities. This policy does not limit purchases of: (1)
restricted securities eligible for resale to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933 that are
determined to be liquid by the Board of Trustees or by the Manager under
Board-approved guidelines, or (2) commercial paper that may be sold
without registration under Sections 3(a)(3) or 4(2) of the Securities Act
of 1933. If due to changes in relative value, more than 10% of the value
of the Trust's net assets consist of illiquid securities, the Manager
would consider appropriate steps to protect the Trust's maximum
flexibility. There may be undesirable delays in selling illiquid
securities at prices representing their fair value.

Loans of Portfolio Securities

To attempt to increase its income, the Trust may lend its portfolio
securities (other than in repurchase transactions) to certain types of
eligible borrowers approved by the Board of Trustees. Each loan must be
collateralized in accordance with applicable regulatory requirements.
After any loan, the value of the securities loaned may not exceed 25% of
the total value of the Trust's assets. There are some risks in connection
with securities lending. The Trust might experience a delay in receiving
additional collateral to secure a loan, or a delay in recovery of the
loaned securities. The Trust does not intend to engage in securities loan
transactions during the current fiscal year. The income from such loans,
when distributed by the Trust, will be taxable.

Temporary Investments

The Trust may hold the following "Temporary Investments" that are
Eligible Securities: (i) obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities; (ii) bankers'
acceptances; (iii) taxable commercial paper rated in the highest category
by a Rating Organization; (iv) short-term taxable debt obligations rated
in one of the two highest rating categories of a Rating Organization; or
(v) certificates of deposit of domestic banks with assets of $1 billion
or more. To the extent the Trust assumes a temporary defensive position,
a significant portion of the Trust's distributions may be subject to
Federal and California income taxes.

Special Considerations - California Municipal
Securities

Because the Trust concentrates its investments in California
Municipal Securities, the market value and marketability of such Municipal
Securities and the interest income to the Trust from them could be
adversely affected by a default or a financial crisis relating to any of
such issuers. Investors should consider these matters as well as
economic trends in California, summarized in the Additional Statement
under "Special Investment Considerations - California Municipal
Securities."

Investment Restrictions

The Trust has certain investment restrictions which, together with
its investment objective, are fundamental policies, changeable only by the
vote of a "majority" (as defined in the Investment Company Act) of the
Trust's outstanding voting securities. Under some of those restrictions,
the Trust cannot: (1) make loans, except that the Trust may purchase debt
securities described in "The Trust and Its Investment Policies," and other
securities substantially similar thereto, and repurchase agreements, and
the Trust may lend its portfolio securities as described in its investment
policy stated above; (2) borrow money in excess of 10% of the value of its
total assets or make any investment when borrowings exceed 5% of the value
of its total assets; it may borrow only as a temporary measure for
extraordinary or emergency purposes; no assets of the Trust may be
pledged, mortgaged or assigned to secure a debt; (3) enter into a
repurchase agreement or purchase a security subject to a call if the
scheduled repurchase or redemption date is greater than one year; (4)
invest more than 25% of its total assets in any one industry; however for
the purposes of this restriction, Municipal Securities and U.S. Government
obligations are not considered to be part of any single industry; (5)
invest in any debt instrument having a maturity in excess of one year from
the date of purchase, unless purchased subject to a demand feature which
may not exceed one year and requires payment on not more than 30 days'
notice; or (6) invest more than 5% of the value of its total assets in
securities of companies that have operated less than three years,
including the operations of predecessors. The percentage restrictions
described above and in the Additional Statement apply only at the time of
investment and require no action by the Trust as a result of subsequent
changes in value of the investments or the size of the Trust. A
supplementary list of investment restrictions is contained in "Investment
Restrictions" in the Additional Statement.

Management of the Trust

The Trust's Board of Trustees has overall responsibility for the
management of the Trust under the laws of Massachusetts governing the
responsibilities of trustees of business trusts. "Trustees and Officers"
in the Additional Statement identifies the Trust's Trustees and officers
and provides information about them. Subject to the authority of the
Board, the Manager is responsible for the day-to-day management of the
Trust's business, supervises the investment operations of the Trust and
the composition of its portfolio and furnishes the Trust advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities, pursuant to a management agreement (the
"Agreement") with the Trust. The management fee, payable monthly to the
Manager under the terms of the Agreement, is computed on the aggregate net
assets as of the close of business each day at the following annual rates:
0.50% of the first $250 million of net assets; 0.475% of the next $250
million of net assets; 0.45% of the next $250 million of net assets;
0.425% of the next $250 million of net assets and 0.40% of net assets in
excess of $1 billion.

The Agreement lists examples of expenses paid by the Trust, the major
categories of which relate to interest, taxes, brokerage commissions,
certain insurance premiums, fees to certain Trustees, legal and audit
expenses, transfer agent and custodian expenses, certain registration
expenses and non-recurring expenses, including litigation costs. For
further information about the Agreement, including a description of
expense arrangements, exculpation provisions and portfolio transactions,
see "Investment Management Services" in the Additional Statement.

The Manager, a wholly-owned subsidiary of Oppenheimer Management
Corporation ("OMC"), has operated as an investment adviser since 1978.
The Manager and OMC currently advise U.S. investment companies with assets
aggregating over $28 billion as of June 30, 1994, and having more than 1.8
million shareholder accounts. OMC is owned by Oppenheimer Acquisition
Corp., a holding company owned in part by senior management of OMC and the
Manager and ultimately controlled by Massachusetts Mutual Life Insurance
Company, a mutual life insurance company which also advises pension plans
and investment companies.

How To Buy Shares

Shares of the Trust may be purchased at their offering price, which
is the net asset value per share, without sales charge. The net asset
value will remain fixed at $1.00 per share, except under extraordinary
circumstances (see "Determination of Net Asset Value Per Share" in the
Additional Statement for further details) but there is no guarantee that
the Trust will maintain a stable net asset value of $1.00 per share.
Centennial Asset Management Corporation, which also acts as the Trust's
distributor (and in that capacity is referred to as the "Distributor"),
may in its sole discretion accept or reject any order for purchase of the
Trust's shares. Oppenheimer Funds Distributor, Inc., an affiliate of the
Distributor, acts as the Trust's sub-distributor (the "Sub-Distributor").

The minimum initial investment is $500 ($2,500 if by Federal Funds
wire), except as otherwise described in this Prospectus. Subsequent
purchases must be in amounts of $25 or more, and may be made through
authorized dealers or brokers or by forwarding payment to the Distributor
at P.O. Box 5143, Denver, Colorado 80217, with the name(s) of all account
owners, the account number and the name of the Trust. The minimum initial
and subsequent purchase requirements are waived on purchases made by
reinvesting dividends from any of the "Eligible Funds" listed in "Exchange
Privilege" below or by reinvesting distributions from unit investment
trusts for which reinvestment arrangements have been made with the
Distributor. Under an Automatic Investment Plan or military allotment
plan, initial and subsequent investments must be at least $25. No share
certificates will be issued unless specifically requested in writing by
an investor or the dealer or broker.

The Trust intends to be as fully invested as practicable to maximize
its yield. Therefore, dividends will accrue on newly-purchased shares
only after the Distributor accepts the purchase order for them at its
address in Denver, Colorado, on a day the New York Stock Exchange is open
(a "regular business day") under one of the methods of purchasing shares
described below. The purchase will be made at the net asset value next
determined after the Distributor accepts the purchase order.

The Trust's net asset value per share is determined twice each
regular business day, at 12:00 Noon and at 4:00 P.M. (all references to
time in this Prospectus are to New York time) by dividing the net assets
of the Trust by the total number of its shares outstanding. The Trust's
Board of Trustees has established procedures for valuing the Trust's
assets, using the amortized cost method, as described in "Determination
of Net Asset Value Per Share" in the Additional Statement.

Purchases Through Automatic Purchase and
Redemption Programs

Shares of the Trust are available under Automatic Purchase and
Redemption Programs ("Programs") of broker-dealers that have entered into
agreements with the Distributor for that purpose. Broker-dealers whose
clients participate in such Programs will invest the "free cash balances"
of such client's Program account in shares of the Trust if the Trust has
been selected as the primary Trust by the client for the Program account.
Such purchases will be made by the broker-dealer under the procedures
described in "Guaranteed Payment," below. The Program may have minimum
investment requirements established by the broker-dealer. The description
of the Program provided by the broker-dealer should be consulted for
details, and all questions about investing in, exchanging or redeeming
shares of the Trust through a Program should be directed to the broker-
dealer.

Direct Purchases

An investor may directly purchase shares of the Trust through any
dealer which has a sales agreement with the Distributor or the Sub-
Distributor. There are two ways to make a direct initial investment:
either (1) complete a Centennial Funds New Account Application and mail
it with payment to the Distributor at P.O. Box 5143, Denver, Colorado
80217-5143 (if no dealer is named in the Application, the Sub-Distributor
will act as the dealer), or (2) order the shares through your dealer or
broker. Purchases made by Application should have a check enclosed, or
payment may be made by one of the alternative means described below.

-- Payment by Check. Orders for shares purchased by check in U.S.
dollars drawn on a U.S. bank will be effected on the regular business day
on which the check (and the purchase application, if the account is new)
is accepted by the Distributor. Dividends will begin to accrue on such
shares the next regular business day after the purchase order is accepted.
For other checks, the shares will not be purchased until the Distributor
is able to convert the purchase payment to Federal Funds, and dividends
will begin to accrue on such shares on the next regular business day.

-- Payment by Federal Funds Wire. Shares of the Trust may be
purchased by Federal Funds wire. The minimum investment by wire is
$2,500. The investor must first call the Distributor's Wire Department
at 1-800-852-8457 to notify the Distributor of the transmittal of the wire
and to order the shares. The investor's bank must wire the Federal Funds
to Citibank, N.A., ABA No. 0210-0008-9 for credit to Concentration Account
No. 3737-5674, for further credit to Centennial California Tax Exempt
Trust, Custodian Account No. 845-873. The wire must state the investor's
name. Shares will be purchased on the regular business day on which,
prior to 4:00 P.M., the Federal Funds are received by Citibank, N.A. and
the Distributor has received and accepted the investor's notification of
the wire order. Shares will be purchased at the net asset value next
determined after receipt of the Federal Funds and the order. Dividends
on newly purchased shares will begin to accrue on the purchase date if the
Federal Funds and order for the purchase are received and accepted by
12:00 Noon. Dividends will begin to accrue on the next regular business
day if the Federal Funds and purchase order are received and accepted
between 12:00 Noon and 4:00 P.M. The investor must also send the
Distributor a completed Application when the purchase order is placed to
establish a new account.

-- Guaranteed Payment. Broker-dealers with sales agreements with the
Distributor (including broker-dealers who have made special arrangements
with the Distributor for purchases for Program accounts) may place
purchase orders with the Distributor to purchase shares of the Trust. If
an order is received between 12:00 Noon and 4:00 P.M. on a regular
business day, with the broker-dealer's guarantee that payment for such
shares in Federal Funds will be received by the Custodian prior to 4:00
P.M. the next regular business day, the order will be effected at 4:00
P.M. on the day the order is received, and dividends on such shares will
begin to accrue on the next regular business day the Federal Funds are
received by the required time. If the broker-dealer guarantees that the
Federal Funds payment will be received by the Trust's Custodian by 2:00
P.M. on a regular business day on which an order is placed for shares
after 12:00 Noon, the order will be effected at 4:00 P.M. that day and
dividends will begin to accrue on such shares on the purchase date.

Automatic Investment Plans

Direct investors may purchase shares of the Trust automatically.
Automatic Investment Plans may be used to make regular monthly investments
($25 minimum) from the investor's account at a bank or other financial
institution. To establish an Automatic Investment Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Automatic Investment Plan payments are
subject to the redemption restrictions for recent purchases described in
"How to Redeem Shares." The amount of the Automatic Investment Plan
payment may be changed or the automatic investments terminated at any time
by writing to the Transfer Agent. A reasonable period (approximately 15
days) is required after receipt of such instructions to implement them.
The Trust reserves the right to amend, suspend, or discontinue offering
such plans at any time without prior notice.

General

Dealers and brokers who process orders for the Trust's shares on
behalf of their customers may charge a fee for this service. That fee can
be avoided by purchasing shares directly from the Trust. The sale of
shares will be suspended during any period when the determination of net
asset value is suspended, and may be suspended by the Board of Trustees
whenever the Board judges it in the best interest of the Trust to do so.

Service Plan

The Trust has adopted a service plan (the "Plan") under Rule 12b-1
of the Investment Company Act pursuant to which the Trust will reimburse
the Distributor for all or a portion of its costs incurred in connection
with the personal service and maintenance of accounts that hold Trust
shares. The Distributor will use all the fees received from the Trust to
compensate dealers, brokers, banks, or other institutions ("Recipients")
each quarter for providing personal service and maintenance of accounts
that hold Trust shares. The services to be provided by Recipients under
the Plan include, but shall not be limited to, the following: answering
routine inquiries from the Recipient's customers concerning the Trust,
providing such customers with information on their investment in Trust
shares, assisting in the establishment and maintenance of accounts or sub-
accounts in the Trust, making the Trust's investment plans and dividend
payment options available, and providing such other information and
customer liaison services and the maintenance of accounts as the
Distributor or the Trust may reasonably request. Plan payments by the
Trust to the Distributor will be made quarterly in the amount of the
lesser of: (i) 0.05% (0.20% annually) of the net asset value of the Trust,
computed as of the close of each business day or (ii) the Distributor's
actual distribution expenses for that quarter of the type approved by the
Board. Any unreimbursed expenses incurred for any quarter by the
Distributor may not be recovered in later periods. The Plan has the
effect of increasing annual expenses of the Trust by up to 0.20% of
average annual net assets from what its expenses would otherwise be. In
addition, the Manager may, under the Plan, from time to time from its own
resources (which may include the profits derived from the advisory fee it
receives from the Trust), make payments to Recipients for distribution,
administrative and accounting services performed by Recipients. For
further details, see "Service Plan" in the Additional Statement.

How to Redeem Shares

Program Participants

Program participants may redeem shares in the Program by writing
checks as described below, or by contacting their dealer or broker.
Program participants may also arrange for "Expedited Redemptions," as
described below, only through their dealer or broker.

Shares of the Trust Owned Directly

Shares of the Trust owned by a shareholder directly (not through a
Program) (a "direct shareholder"), may be redeemed in the following ways:

-- Regular Redemption Procedure. A direct shareholder who wishes to
redeem some or all shares in an account (whether or not represented by
certificates) under the Trust's regular redemption procedures, must send
the following to the Transfer Agent for the Trust, Shareholder Services,
Inc., P.O. Box 5143, Denver, Colorado 80217; (send courier or express mail
deliveries to 10200 E. Girard Avenue, Building D, Denver, Colorado 80231):
(1) a written request for redemption signed by all registered owners
exactly as the shares are registered, including fiduciary titles, if any,
and specifying the account number and the dollar amount or number of
shares to be redeemed; (2) a guarantee of the signatures of all registered
owners on the redemption request or on the endorsement on the share
certificate or accompanying stock power, by a U.S. bank, trust company,
credit union or savings association, or a foreign bank having a U.S.
correspondent bank, or by a U.S. registered dealer or broker in
securities, municipal securities or government securities, or by a U.S.
national securities exchange, registered securities association or
clearing agency; (3) any share certificates issued for any of the shares
to be redeemed; and (4) any additional documents which may be required by
the Transfer Agent for redemption by corporations, partnerships or other
organizations, executors, administrators, trustees, custodians or
guardians, or if the redemption is requested by anyone other than the
shareholder(s) of record. Transfers of shares are subject to similar
requirements. A signature guarantee is not required for redemptions of
$50,000 or less, requested by and payable to all shareholders of record,
to be sent to the address of record for that account. To avoid delay
in redemption or transfer, shareholders having questions about these
requirements should contact the Transfer Agent in writing or by calling
1-800-525-9310 before submitting a request. From time to time the
Transfer Agent in its discretion may waive any or certain of the foregoing
requirements in particular cases. Redemption or transfer requests will
not be honored until the Transfer Agent receives all required documents
in proper form.

-- Expedited Redemption Procedure. In addition to the regular
redemption procedure set forth above, direct shareholders whose shares are
not represented by certificates may arrange to have redemption proceeds
of $2,500 or more wired in Federal Funds to a designated commercial bank
if the bank is a member of the Federal Reserve wire system. To place a
wire redemption request, call the Transfer Agent at 1-800-852-8457. The
account number of the designated financial institution must be supplied
to the Transfer Agent on the Application or dealer settlement instructions
establishing the account or may be added to existing accounts or changed
only by signature-guaranteed instructions to the Transfer Agent from all
shareholders of record. Such redemption requests may be made by
telephone, wire or written instructions to the Transfer Agent. The wire
for the redemption proceeds of shares redeemed prior to 12:00 Noon,
normally will be transmitted by the Transfer Agent to the shareholder's
designated bank account on the day the shares are redeemed (or, if that
day is not a bank business day, on the next bank business day). No
dividends are paid on the proceeds of redeemed shares awaiting transmittal
by wire. Shares redeemed prior to 12:00 Noon do not earn dividends on the
redemption date. The wire for the redemption proceeds of shares redeemed
between 12:00 Noon and 4:00 P.M., normally will be transmitted by the
Transfer Agent to the shareholder's designated bank account on the next
bank business day after the redemption. Shares redeemed between 12:00
Noon and 4:00 P.M. earn dividends on the redemption date. See "Purchase,
Redemption and Pricing of Shares" in the Additional Statement for further
details.

-- Checkwriting. Upon request, the Transfer Agent will provide any
direct shareholder or Program participant whose shares are not represented
by certificates with forms of drafts ("checks") payable through a bank
selected by the Trust (the "Bank"). Program participants must arrange for
check writing through their brokers or dealers. The Transfer Agent will
arrange for checks written by direct shareholders to be honored by the
Bank after obtaining a specimen signature card from the shareholder(s).
Shareholders of joint accounts may elect to have checks honored with a
single signature. Checks may be made payable to the order of anyone in
any amount not less than $250 and will be subject to the Bank's rules and
regulations governing checks. For Program Participants, checks will be
drawn against the primary account designated by the Program participant.
If a check is presented for an amount greater than the account value, it
will not be honored. Shares purchased by check or Automatic Investment
Plan payments within the prior 15 days may not be redeemed by check
writing. A check presented to the Bank for payment that would require
redemption of some or all of the shares so purchased is subject to non-
payment. Checks may not be presented for payment at the offices of the
Bank or the Trust's Custodian. This limitation does not affect the use
of checks for the payment of bills or to obtain cash at other banks. The
Trust reserves the right to amend, suspend or discontinue check writing
privileges at any time without prior notice.

-- Telephone Redemptions. Direct shareholders of the Trust may
redeem their shares by telephone by calling the Transfer Agent at 1-800-
852-8457. This procedure for telephone redemptions is not available to
Program participants. Proceeds of telephone redemptions will be paid by
check payable to the shareholder(s) of record and sent to the address of
record for the account. Telephone redemptions are not available within 30
days of a change of the address of record. Up to $50,000 may be redeemed
by telephone, within any seven day period.

The Transfer Agent may record any calls. Telephone redemptions may
not be available if all lines are busy, and shareholders would have to use
the Trust's regular redemption procedures described above. Telephone
redemption privileges are not available for newly-purchased (within the
prior 15 days) shares or for shares represented by certificates.
Telephone redemption privileges apply automatically to each shareholder
and the dealer representative of record unless the Transfer Agent receives
cancellation instructions from a shareholder of record. If an account has
multiple owners, the Transfer Agent may rely on the instructions of any
one owner.

Automatic Withdrawal Plan

Direct shareholders of the Trust can authorize the Transfer Agent to
redeem shares (minimum $50) automatically on a monthly, quarterly, semi-
annual or annual basis under an Automatic Withdrawal Plan. Shares will
be redeemed as of 4:00 P.M. three business days prior to the date
requested by the shareholder for receipt of the payment. The Trust cannot
guarantee receipt of payment on the date requested and reserves the right
to amend, suspend or cease offering such plans at any time without prior
notice. For further details, see the "Automatic Withdrawal Plan
Provisions" in the Additional Statement.

General Information on Redemptions

The redemption price will be the net asset value per share of the
Trust next determined after the receipt by the Transfer Agent of a request
in proper form. Under certain unusual circumstances, shares of the Trust
may be redeemed "in kind" (i.e., by payment in portfolio securities).
Under certain circumstances, the Trust may involuntarily redeem small
accounts if the account has fallen below $200 in value. For details, see
"Purchase, Redemption and Pricing of Shares - Redemption of Shares" in the
Additional Statement. Under the Internal Revenue Code, the Trust may be
required to impose "backup" withholding of Federal income tax at the rate
of 31% from any taxable dividends and distributions the Trust may make,
if the shareholder has not furnished the Trust a certified tax
identification number or has not otherwise complied with provisions of the
Internal Revenue Code and regulations thereunder.

Payment for redeemed shares is made ordinarily in cash and forwarded
within seven days of the Transfer Agent's receipt of redemption
instructions in proper form, except under unusual circumstances as
determined by the Securities and Exchange Commission. The Transfer Agent
may delay forwarding a redemption check for recently-purchased shares only
until the purchase check has cleared, which may take up to 15 days or
more. Such delay may be avoided if the shareholder arranges telephone or
written assurance satisfactory to the Transfer Agent from the bank on
which the payment was drawn or by purchasing shares by Federal Funds wire,
as described above. The Trust makes no charge for redemption. Dealers
or brokers may charge a fee for handling redemption transactions, but such
fee can be avoided by requesting the redemption directly through the
Transfer Agent. Under certain circumstances, the proceeds of redemptions
of shares of the Trust acquired by exchange of Class A shares of "Eligible
Funds" (described below) purchased subject to a contingent deferred sales
charge ("CDSC") may be subject to the CDSC (see "Exchange Privilege"
below).

Exchanges of Shares

Shares of the Trust held under Programs may be exchanged for shares
of Centennial Money Market Trust, Centennial Government Trust, Centennial
Tax Exempt Trust and Centennial New York Tax Exempt Trust (collectively,
the "Centennial Trusts") only by instructions of the broker. Shares of
the Trust may, under certain conditions, be exchanged by direct
shareholders for Class A shares of the following funds, all collectively
referred to as "Eligible Funds": (i) Oppenheimer Target Fund, Oppenheimer
Champion High Yield Fund, Oppenheimer Asset Allocation Fund, Oppenheimer
Discovery Fund, Oppenheimer U.S. Government Trust, Oppenheimer Global
Growth & Income Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer
Limited-Term Government Fund, Oppenheimer Intermediate Tax-Exempt Bond
Fund, Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer Time Fund,
Oppenheimer Growth Fund, Oppenheimer Equity Income Fund, Oppenheimer Gold
& Special Minerals Fund, Oppenheimer Insured Tax-Exempt Bond Fund,
Oppenheimer Main Street Income & Growth Fund, Oppenheimer Main Street
California Tax-Exempt Fund, Oppenheimer Florida Tax-Exempt Fund,
Oppenheimer New Jersey Tax-Exempt Fund, Oppenheimer Investment Grade Bond
Fund, Oppenheimer Value Stock Fund, Oppenheimer California Tax-Exempt
Fund, Oppenheimer Pennsylvania Tax-Exempt Fund, Oppenheimer High Yield
Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Mortgage Income
Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer New York Tax-Exempt
Fund, Oppenheimer Strategic Income Fund, Oppenheimer Strategic Income &
Growth Fund, Oppenheimer Strategic Short-Term Income Fund and Oppenheimer
Strategic Investment Grade Bond Fund; and (ii) the following "Money Market
Funds": Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves,
the Centennial Trusts and Daily Cash Accumulation Fund, Inc. There is an
initial sales charge on the purchase of Class A shares of each Eligible
Fund except the Money Market Funds (under certain circumstances described
below, redemption proceeds of Money Market Fund shares may be subject to
a CDSC).

Shares of the Trust and of the other Eligible Funds may be exchanged
at net asset value if all of the following conditions are met: (1) shares
of the fund selected for exchange are available for sale in the
shareholder's state of residence; (2) the respective prospectuses of the
funds whose shares are to be exchanged and acquired offer the Exchange
Privilege to the investor; (3) newly-purchased shares (by initial or
subsequent investment) are held in an account for at least 7 days prior
to the exchange; and (4) the aggregate net asset value of the shares
surrendered for exchange is at least equal to the minimum investment
requirements of the fund whose shares are to be acquired.

In addition to the conditions stated above: shares of Eligible Funds
may be exchanged for shares of any Money Market Fund; shares of any Money
Market Fund (including the Trust) purchased without a sales charge may be
exchanged for shares of Eligible Funds offered with a sales charge upon
payment of the sales charge (or, if applicable, may be used to purchase
shares of Eligible Funds subject to a CDSC); and shares of the Trust
acquired by reinvestment of dividends and distributions from any Eligible
Fund (except Oppenheimer Cash Reserves) or from any unit investment trust
for which reinvestment arrangements have been made with the Distributor
may be exchanged at net asset value for shares of any Eligible Fund. The
redemption proceeds of shares of the Trust, acquired by exchange of shares
of an Eligible Fund purchased subject to a CDSC, that are redeemed within
18 months of the end of the calendar month of the initial purchase of the
exchanged shares will be subject to the CDSC as described in the
prospectus of that other Eligible Fund. In determining whether the CDSC
is payable, shares of the Trust not subject to the CDSC are redeemed
first, including shares purchased by reinvestment of dividends and capital
gains distributions from any Eligible Fund or shares of the Trust acquired
by exchange of shares of Eligible Funds on which a front-end sales charge
was paid or credited, and then other shares are redeemed in the order of
purchase.

An exchange may be made by submitting an Exchange Authorization Form
to the Transfer Agent, signed by all registered owners. In addition,
direct shareholders of the Trust may exchange shares of the Trust for
shares of any Centennial Trust by telephone exchange instructions to the
Transfer Agent by a shareholder or the dealer representative of record for
an account. The Trust may modify, suspend or discontinue these exchange
privileges at any time, and will do so on 60 days' notice if such notice
is required by regulations adopted under the Investment Company Act. The
Trust reserves the right to reject requests submitted in bulk on behalf
of 10 or more accounts. Exchange requests must be received by the
Transfer Agent by 4:00 P.M. on a regular business day to be effected that
day. The number of shares exchanged may be less than the number requested
if the number requested would include shares subject to a restriction
cited above or shares covered by a certificate that is not tendered with
such request. Only the shares available for exchange without restriction
will be exchanged.

Direct shareholders may place a telephone exchange request by calling
the Transfer Agent at 1-800-852-8457. Telephone exchange calls may be
recorded by the Transfer Agent. Telephone exchanges are subject to the
rules described above. By exchanging shares by telephone, the shareholder
is acknowledging receipt of a prospectus of the fund to which the exchange
is made and that for full or partial exchanges, any special account
features such as Automatic Investment Plans and Automatic Withdrawal Plans
will be switched to the new account unless the Transfer Agent is otherwise
instructed. Telephone exchange privileges automatically apply to each
direct shareholder of record and the dealer representative of record
unless and until the Transfer Agent receives written instructions from the
shareholder(s) of record cancelling such privileges. If an account has
multiple owners, the Transfer Agent may rely on the instructions of any
one owner. The Transfer Agent has adopted reasonable procedures to
confirm that telephone instructions are genuine, by requiring callers to
provide tax identification number(s) and other account data and by
recording calls and confirming such transactions in writing. If the
Transfer Agent does not use such procedures, it may be liable for losses
due to unauthorized transactions, but otherwise it will not be liable for
losses or expenses arising out of any telephone instructions it reasonably
believes to be genuine. The Transfer Agent reserves the right to require
shareholders to confirm, in writing, telephone exchange privileges for an
account. Shares acquired by telephone exchange must be registered exactly
as the account from which the exchange was made. Certificated shares are
not eligible for telephone exchange. If all telephone exchange lines are
busy (which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request telephone
exchanges and would have to submit written exchange requests.

Shares to be exchanged are redeemed on the day the Transfer Agent
receives an exchange request in proper form (the "Redemption Date") as of
4:00 P.M. Normally, shares of the fund to be acquired are purchased on
the Redemption Date, but such purchases may be delayed by either fund for
up to five business days if it determines that it would be disadvantaged
by an immediate transfer of the redemption proceeds. The Trust in its
discretion reserves the right to refuse any exchange request that will
disadvantage it.

The Eligible Funds have different investment objectives and policies.
Each of those funds except the Money Market Funds imposes a sales charge
on purchases of Class A shares. For complete information, including sales
charges and expenses, a prospectus of the fund into which the exchange is
being made should be read prior to an exchange. If a sales charge is
assessed on all shares acquired by exchange, there is no service charge.
Otherwise, a $5 service charge will be deducted from the account into
which the exchange is made to help defray administrative expenses.
Dealers and brokers who process exchange orders on behalf of customers may
charge for their services. Those charges may be avoided by requesting the
Trust directly to exchange shares. For Federal tax purposes, an exchange
is treated as a redemption and purchase of shares.

Dividends and Taxes

This discussion relates solely to Federal tax laws and California
income tax laws and is not exhaustive; a qualified tax adviser should be
consulted. A portion of the Trust's dividends may be subject to federal,
state and local taxation. The Additional Statement contains further
discussion of tax matters affecting the Trust and its distributions, and
information about the possible applicability of the Alternative Minimum
Tax to the Trust's dividends and distributions.

Dividends

The Trust intends to declare all of its net income, as defined below,
as dividends on each regular business day and to pay dividends monthly.
Dividends will be payable to shareholders as described in "How to Buy
Shares" above.

All dividends for the accounts of Program participants are
automatically reinvested in additional shares of the Trust. Dividends
accumulated since the prior payment will be reinvested in full and
fractional shares of the Trust (or paid in cash) at net asset value on the
third Thursday of each calendar month. Program participants may receive
cash payments by asking the broker to redeem shares. Dividends payable
to direct shareholders will also be automatically reinvested in shares of
the Trust at net asset value, unless the shareholder asks the Transfer
Agent in writing to pay dividends in cash, or to reinvest them in another
Eligible Fund, as described in "Dividend Reinvestment in Another Fund" in
the Additional Statement. That notice must be received prior to a
dividend record date to be effective as to that dividend. If a
shareholder redeems all shares at any time during a month, the redemption
proceeds include all dividends accrued up to but not including the
redemption date for shares redeemed prior to 12:00 Noon, and include all
dividends accrued through the redemption date for shares redeemed between
12:00 Noon and 4:00 P.M. Dividends and the proceeds of redemptions of
Trust shares represented by checks returned to the Transfer Agent by the
Postal Service as undeliverable will be invested in shares of the Trust,
as promptly as possible after the return of such checks to the Transfer
Agent, to enable the investor to earn a return on otherwise idle funds.

Under the terms of a Program, a broker-dealer may pay out the value
of some or all of a Program participant's Trust shares prior to redemption
of such shares by the Trust. In such cases, the shareholder will be
entitled to dividends on such shares only up to and including the date of
such payment. Dividends on such shares accruing between the date of
payment and the date such shares are redeemed by the Trust will be paid
to the broker-dealer. It is anticipated that such payments will occur
only to satisfy debit balances arising in a shareholder's account under
a Program.

The Trust's net investment income for dividend purposes consists of
all interest accrued on portfolio assets, less all expenses of the Trust
for the applicable period. Distributions from net realized gains on
securities, if any, will be paid at least once a year, and may be made
more frequently in compliance with the Internal Revenue Code and the
Investment Company Act. Any net realized capital loss is carried forward
to offset against capital gains in later years. The Trust will not make
any distributions from net realized securities gains unless capital loss
carry forwards, if any, have been used or have expired. Long-term capital
gains, if any, will be identified separately when tax information for the
Trust is distributed to shareholders. Receipt of tax-exempt income must
be reported on the taxpayer's Federal income tax return. The Additional
Statement describes how dividends and distributions received by direct
shareholders of the Trust may be reinvested in shares of any Eligible Fund
at net asset value. To effect its policy of maintaining a net asset value
of $1.00 per share, the Trust, under certain circumstances, may withhold
dividends or make distributions from capital or capital gains.

Tax Status of the Trust's Dividends and Distributions

The Trust intends to qualify under the Internal Revenue Code during
each fiscal year to pay "exempt-interest dividends" to its shareholders,
and qualified during its last fiscal year. Exempt-interest dividends
which are derived from net investment income earned by the Trust on
Municipal Securities will be excludable from gross income of the
shareholders for Federal income tax purposes. Net investment income
includes income allocated from Municipal Securities in the Trust's
portfolio which are free from Federal and California individual income
taxes. This allocation will be made by uniformly applying a designated
percentage to all income dividends made during the tax year. Such
designation will normally be made following the end of each fiscal year
as to income dividends paid in the prior year. The percentage of income
designated as tax-exempt may differ substantially from the percentage of
the Trust's income that was tax-exempt for a given period. The net amount
of any income on Municipal Securities subject to the alternative minimum
tax will be identified when tax information is distributed by the Trust.
All or a portion of the Trust's exempt-interest dividends may be a
component of the "adjusted current earnings" preference item under the
corporate alternative minimum tax. The Trust will report annually to
shareholders the percentage of interest income it received during the
preceding year on Municipal Securities. Although not subject to tax, the
receipt of tax-exempt income must be reported on the taxpayer's Federal
income tax return. Shareholders receiving Social Security benefits should
be aware that exempt-interest dividends are a factor in determining
whether such benefits are subject to Federal income tax.

A shareholder treats a dividend as a receipt of ordinary income
(whether paid in cash or reinvested in additional shares) if derived from
net interest income earned by the Trust from one or more of: (i) certain
taxable temporary investments (such as certificates of deposit, commercial
paper, obligations of the U.S. government, its agencies or
instrumentalities or repurchase agreements), (ii) income from securities
loans, or (iii) an excess of net short-term capital gains over net long-
term capital losses. Losses realized by shareholders on the redemption
or other disposition of Trust shares within six months of purchase (which
period may be shortened by regulation and may be extended in certain
circumstances) will be disallowed for Federal income tax purposes to the
extent of exempt-interest dividends received on such shares.

In any year in which the Trust qualifies as a regulated investment
company under the Internal Revenue Code, (i) the Trust will also qualify
as a regulated investment company for California corporate income and
franchise tax purposes, and (ii) provided that the Trust's assets satisfy
the 50% requirement discussed below, the Trust will be qualified under
California law to pay "exempt-interest dividends" which will be exempt
from the California personal income tax. Individual shareholders of the
Trust will not be subject to California personal income tax on exempt-
interest dividends received from the Trust to the extent such
distributions are attributable to interest on obligations which, if held
by an individual, would not be subject to California personal income tax,
provided that at least 50% of the Trust's assets at the close of each
quarter of its taxable year are invested in such obligations.
Distributions from the Trust attributable to other sources will generally
be taxable to shareholders as ordinary income. However, amounts treated
as long-term capital gain distributions for Federal income tax purposes
are treated as long-term capital gains for California personal income tax
purposes. In addition, distributions to shareholders of other than
exempt-interest dividends are includable in income subject to the
California alternative minimum tax. Interest on indebtedness
incurred or continued by shareholders to purchase or carry shares of the
Trust will not be deductible for Federal or California personal income tax
purposes.

Distributions from investment income and long-term and short-term
capital gains will generally not be excluded from taxable income in
determining the California corporate franchise or income tax for corporate
shareholders. Distributions are also includable in income that is subject
to the corporate alternative minimum tax.

If the Trust has net realized long-term capital gains in a taxable
year, it may make an annual "long-term capital gains distribution," which
will be so identified when paid and when tax information is distributed.
Long-term gains are taxable to shareholders as long-term capital gains,
whether received in cash or reinvested, regardless of how long the Trust
shares have been held. Losses realized by shareholders on the redemption
or other sale of shares within six months of purchase (which period may
be shortened by regulation and may be extended in certain circumstances)
will be treated for Federal income tax purposes as a long-term capital
loss to the extent that the shareholder received (or was treated as
receiving, as described below) a capital-gain dividend on the shares. The
Trust will report annually to its shareholders the percentage of interest
income it received during the preceding year on Municipal Securities. It
will also report the net amount of its income that is subject to the
alternative minimum tax. Receipt of tax-exempt income must be reported
on a taxpayer's Federal income tax return. The Trust will be subject to
Federal income tax on its undistributed net long-term capital gains. For
Federal income tax purposes, any undistributed net long-term capital gains
of the Trust will be treated as distributed to shareholders, and will be
taxable to shareholders. Shareholders will be entitled to a Federal
income tax credit in the amount of the tax paid by the Trust on the
undistributed net long-term capital gains, however.

Additional Information

Description of the Trust and its Shares

Each share of the Trust represents an interest in the Trust equal to
the interest of each other share in the Trust and entitles the holder to
one vote per share (and a fractional vote for a fractional share) on
matters submitted to a shareholder vote, and to participate pro-rata in
dividends and distributions and in the net distributable assets of the
Trust on liquidation. The Trustees may divide or combine shares into a
greater or lesser number of shares without thereby changing the
proportionate beneficial interest in the Trust. Shares do not have
cumulative voting rights or conversion, preemptive or subscription rights.
The Trust's Board of Trustees is empowered to issue additional "series"
of shares of the Trust, which may have separate assets and liabilities.

The Trust does not anticipate holding annual meetings. Under certain
circumstances, shareholders of the Trust have the right to remove a
Trustee. See "Additional Information" in the Additional Statement for
details.

The Custodian and the Transfer Agent

The Custodian of the assets of the Trust is Citibank, N.A. The
Manager and its affiliates presently have banking relationships with the
Custodian; see "Additional Information" in the Additional Statement for
further information. The Trust's cash balances in excess of $100,000 held
by the Custodian are not protected by Federal deposit insurance. Such
uninsured balances may at times be substantial. The rating restrictions
under Rule 2a-7 (see "Ratings of Securities," herein) do not apply to
banks in which the Trust's cash is kept.

Shareholder Services, Inc., a subsidiary of OMC, acts as Transfer
Agent and shareholder servicing agent on an at-cost basis for the Trust,
and all of the other funds managed by the Manager. The fees to the
Transfer Agent do not include payments for any services of the type paid,
or to be paid, by the Trust to the Distributor and to Recipients under any
Service Plan. Shareholders should direct any inquiries regarding the
Trust to the Transfer Agent at the address or toll-free phone number on
the back cover. Program participants should direct any inquiries
regarding the Trust to their broker.

<PAGE>

No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in
this Prospectus, and if given or made such information and representations
must not be relied upon as having been authorized by the Trust, the
Manager, the Distributor, or any affiliate thereof. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
of the securities offered hereby in any state to any person to whom it is
unlawful to make such offer in such state.

Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231

Transfer and Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217-5143
1-800-525-9310

Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043

Independent Auditors
Deloitte & Touche LLP
1560 Broadway
Denver, Colorado 80202

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

PR180.1194.R * Printed on recycled paper

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
3410 South Galena Street, Denver, Colorado 80231
1-800-525-9310

This Statement of Additional Information (the "Additional Statement")
is not a Prospectus. This Additional Statement should be read in
conjunction with the Prospectus (the "Prospectus") dated November 1, 1994
of Centennial California Tax Exempt Trust (the "Trust"), which may be
obtained upon written request to Shareholder Services, Inc. (the "Transfer
Agent"), P.O. Box 5143, Denver, Colorado 80217-5143 or by calling the
toll-free number shown above.

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Investment Objective and Policies . . . . . . . . . . . . . . 2
Special Investment Considerations - California
Municipal Securities . . . . . . . . . . . . . . . . . . . 8
Investment Restrictions . . . . . . . . . . . . . . . . . . . 10
Trustees and Officers . . . . . . . . . . . . . . . . . . . . 11
Investment Management Services. . . . . . . . . . . . . . . . 14
Service Plan. . . . . . . . . . . . . . . . . . . . . . . . . 16
Purchase, Redemption and Pricing of Shares. . . . . . . . . . 18
Yield Information . . . . . . . . . . . . . . . . . . . . . . 20
Additional Information. . . . . . . . . . . . . . . . . . . . 22
Automatic Withdrawal Plan Provisions. . . . . . . . . . . . . 23
Independent Auditors' Report. . . . . . . . . . . . . . . . . 25
Financial Statements. . . . . . . . . . . . . . . . . . . . . 26
Appendix A: Description of Securities Ratings . . . . . . . . A-1
Appendix B: Tax Equivalent Yield Table. . . . . . . . . . . . B-1
</TABLE>

This Additional Statement is effective November 1, 1994.

<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

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

The Trust will not make investments with the objective of seeking
capital growth. However, the value of the securities held by the Trust may
be affected by changes in general interest rates. Because the current
value of debt securities varies inversely with changes in prevailing
interest rates, if interest rates increase after a security is purchased,
that security would normally decline in value. Conversely, should
interest rates decrease after a security is purchased, its value would
rise. However, those fluctuations in value will not generally result in
realized gains or losses to the Trust since the Trust does not usually
intend to dispose of securities prior to their maturity. A debt security
held to maturity is redeemable by its issuer at full principal value plus
accrued interest. To a limited degree, the Trust may engage in short-term
trading to attempt to take advantage of short-term market variations, or
may dispose of a portfolio security prior to its maturity if, on the basis
of a revised credit evaluation of the issuer or other considerations, the
Trust believes such disposition advisable or it needs to generate cash to
satisfy redemptions. In such cases, the Trust may realize a capital gain
or loss. The Trust will not engage in option activity.

There are, of course, variations in the security of Municipal
Securities, both within a particular classification and between
classifications, depending on numerous factors. The yields of Municipal
Securities depend on, among other things, general conditions of the
Municipal Securities market, size of a particular offering, the maturity
of the obligation and rating of the issue. The market value of Municipal
Securities will vary as a result of changing evaluations of the ability
of their issuers to meet interest and principal payments, as well as
changes in the interest rates payable on new issues of Municipal
Securities.

Municipal Securities

Municipal Bonds. The two principal classifications of Municipal Bonds are
"general obligations" (secured by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest) and
"revenue obligations" (payable only from the revenues derived from a
particular facility or class of facilities, or specific excise tax or
other revenue source).

General Obligation Bonds. Issuers of general obligation bonds
include states, counties, cities, towns, and regional districts. The
proceeds of these obligations are used to fund a wide range of public
projects, including construction or improvement of schools, highways and
roads, and water and sewer systems. The basic security behind general
obligation bonds is the issuer's pledge of its full faith and credit and
taxing power for the payment of principal and interest. The taxes that
can be levied for the payment of debt service may be limited or unlimited
as to the rate or amount of special assessments.

Revenue Bonds. The principal security for a revenue bond is
generally the net revenues derived from a particular facility, group of
facilities, or, in some cases, the proceeds of a special excise or other
specific revenue source. Revenue bonds are issued to finance a wide
variety of capital projects including: electric, gas, water and sewer
systems; highways, bridges, and tunnels; port and airport facilities;
colleges and universities; and hospitals. Although the principal security
behind these bonds may vary, many provide additional security in the form
of a debt service reserve fund whose money may be used to make principal
and interest payments on the issuer's obligations. Housing finance
authorities have a wide range of security, including partially or fully
insured mortgages, rent subsidized and/or collateralized mortgages, and/or
the net revenues from housing or other public projects. Some authorities
provide further security in the form of a state's ability (without
obligation) to make up deficiencies in the debt service reserve fund.

Industrial Development Bonds. Industrial development bonds, which
are considered municipal bonds if the interest paid is exempt from Federal
income tax, are issued by or on behalf of public authorities to raise
money to finance various privately operated facilities for business and
manufacturing, housing, sports, and pollution control. These bonds are
also used to finance public facilities such as airports, mass transit
systems, ports, and parking. The payment of the principal and interest
on such bonds is dependent solely on the ability of the facility's user
to meet its financial obligations and the pledge, if any, of real and
personal property so financed as security for such payment.

Municipal Notes. Municipal Securities having a maturity when issued of
less than one year are generally known as Municipal Notes. Municipal
Notes generally are used to provide for short-term working capital needs
and include:

Tax Anticipation Notes. Tax anticipation notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of seasonal tax revenue, such as income, sales, use or
business taxes, and are payable from these specific future taxes.

Revenue Anticipation Notes. Revenue anticipation notes are issued
in expectation of receipt of other types of revenue, such as Federal
revenues available under Federal revenue sharing programs.

Bond Anticipation Notes. Bond anticipation notes are issued to
provide interim financing until long-term financing can be arranged. In
most cases, the long-term bonds then provide the money for the repayment
of the notes.

Construction Loan Notes. Construction loan notes are sold to provide
construction financing. After successful completion and acceptance, many
projects receive permanent financing through the Federal Housing
Administration.

Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a short-
term obligation issued by state and local governments or their agencies
to finance seasonal working capital needs or as short-term financing in
anticipation of longer-term financing.

Municipal Lease Obligations. From time to time the Trust may invest more
than 5% of its net assets in municipal lease obligations, generally
through the acquisition of certificates of participation, that the Manager
has determined to be liquid under guidelines set by the Board of
Directors. Those guidelines require the Manager to evaluate: (1) the
frequency of trades and price quotations for such securities; (2) the
number of dealers or other potential buyers willing to purchase or sell
such securities; (3) the availability of market-makers; and (4) the nature
of the trades for such securities. The Manager will also evaluate the
likelihood of a continuing market for such securities throughout the time
they are held by the Trust and the credit quality of the instrument.
Municipal leases may take the form of a lease or an installment purchase
contract issued by a state or local government authority to obtain funds
to acquire a wide variety of equipment and facilities. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation is
ordinarily backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Projects financed with certificates
of participation generally are not subject to state constitutional debt
limitations or other statutory requirements that may be applicable to
Municipal Securities. Payments by the public entity on the obligation
underlying the certificates are derived from available revenue sources;
such revenue may be diverted to the funding of other municipal service
projects. Payments of interest and/or principal with respect to the
certificates are not guaranteed and do not constitute an obligation of the
State of California or any of its political subdivisions.

In addition to the risk of "non-appropriation," municipal lease
securities do not yet have a highly developed market to provide the degree
of liquidity of conventional municipal bonds. Municipal leases, like
other municipal debt obligations, are subject to the risk of non-payment.
The ability of issuers of municipal leases to make timely lease payments
may be adversely affected in general economic downturns and as relative
governmental cost burdens are reallocated among federal, state and local
governmental units. Such non-payment would result in a reduction of
income to the Trust, and could result in a reduction in the value of the
municipal lease experiencing non-payment and a potential decrease in the
net asset value of the Trust. Municipal lease obligations purchased by
the Trust must meet the credit quality requirements of Rule 2a-7.

Floating Rate/Variable Rate Obligations. Floating rate and variable rate
demand notes are tax-exempt obligations which may have a stated maturity
in excess of one year, but may include features that permit the holder to
recover the principal amount of the underlying security on not more than
thirty days' notice at any time or at specified intervals not exceeding
one year. The issuer of such notes normally has a corresponding right,
after a given period, to prepay in its discretion the outstanding
principal amount of the note plus accrued interest upon a specified number
of days notice to the holder. The interest rate on a floating rate demand
note is based on a stated prevailing market rate, such as the PSA
Municipal Swap Index or the J.J. Kenney Index, or some other standard, and
is adjusted automatically each time such rate is adjusted. The interest
rate on a variable rate demand note is also based on a stated prevailing
market rate but is adjusted automatically at specified intervals of no
less than one year. Generally, the changes in the interest rate on such
securities reduce the fluctuation in their market value. As interest
rates decrease or increase, the potential for capital appreciation or
depreciation is less than that for fixed-rate obligations of the same
maturity. There is no limit on the amount of the Trust's assets that may
be invested in floating rate and variable rate obligations. Floating rate
or variable rate obligations which do not provide for recovery of
principal and interest within thirty days may be subject to the
limitations applicable to illiquid securities described in "Illiquid and
Restricted Securities" in the Prospectus.

Puts and Stand-by Commitments. When the Trust buys Municipal Securities,
it may obtain a stand-by commitment from the seller to repurchase the
securities that entitles the Trust to achieve same-day settlement from the
repurchaser and to receive an exercise price equal to the amortized cost
of the underlying security plus accrued interest, if any, at the time of
exercise. A put purchased in conjunction with a Municipal Security
enables the Trust to sell the underlying security within a specified
period of time at a fixed exercise price. The Trust may pay for a stand-
by commitment or put either separately in cash or by paying a higher price
for the securities acquired subject to the stand-by commitment or put.
The Trust will enter into these transactions only with banks and dealers
which, in the Manager's opinion, present minimal credit risks. The
Trust's purchases of puts are subject to the provisions of Rule 2a-7 under
the Investment Company Act because the Trust uses the amortized cost
method to value its portfolio securities. That Rule, which is subject to
change, states (among other things) that the Trust may not, with respect
to 75% of the amortized cost of its assets, have invested more than 5% of
the total amortized cost value of its assets in securities issued by or
subject to puts from the same institution. An unconditional put or
guarantee with respect to a security will not be deemed to be issued by
the institution providing the guarantee or put provided that the value of
all securities held by the Trust and issued or guaranteed by the issuer
providing the guarantee or put shall not exceed 10% of the Trust's total
assets.

The Trust's ability to exercise a put or stand-by commitment will
depend on the ability of the bank or dealer to pay for the securities if
the put or stand-by commitment is exercised. If the bank or dealer should
default on its obligation, the Trust might not be able to recover all or
a portion of any loss sustained from having to sell the security
elsewhere. Puts and stand-by commitments are not transferable by the
Trust, and therefore terminate if the Trust sells the underlying security
to a third party. The Trust intends to enter into these arrangements to
facilitate portfolio liquidity, although such arrangements may enable the
Trust to sell a security at a pre-arranged price which may be higher than
the prevailing market price at the time the put or stand-by commitment is
exercised. However, the Trust might refrain from exercising a put or
stand-by commitment if the exercise price is significantly higher than the
prevailing market price, to avoid imposing a loss on the seller which
could jeopardize the Trust's business relationship with the seller. Any
consideration paid by the Trust for the put or stand-by commitment (which
increases the cost of the security and reduces the yield otherwise
available from the security) will be reflected on the Trust's books as
unrealized depreciation while the put or stand-by commitment is held, and
a realized gain or loss when the put or commitment is exercised or
expires. Interest income received by the Trust from Municipal Securities
subject to puts or stand-by commitments may not qualify as tax exempt in
its hands if the
terms of the put or stand-by commitment cause the Trust not to be treated
as the tax owner of the underlying Municipal Securities.

Private Activity Municipal Securities. The Tax Reform Act of 1986 (the
"Tax Reform Act") reorganized, as well as amended, the rules governing tax
exemption for interest on Municipal Securities. The Tax Reform Act
generally did not change the tax treatment of bonds issued in order to
finance governmental operations. Thus, interest on obligations issued by
or on behalf of a state or local government, the proceeds of which are
used to finance the operations of such governments (e.g., general
obligation bonds) continues to be tax-exempt. However, the Tax Reform Act
further limited the use of tax-exempt bonds for non-governmental (private)
purposes. More stringent restrictions were placed on the use of proceeds
of such bonds. Interest on certain private activity bonds (other than
those specified as "qualified" tax-exempt private activity bonds, e.g.,
exempt facility bonds, including certain industrial development bonds,
qualified mortgage bonds, qualified Section 501(c)(3) bonds, qualified
student loan bonds, etc.) is taxable under the revised rules.

Interest on certain private activity bonds issued after August 7,
1986, which continues to be tax-exempt will be treated as a tax preference
item subject to the Federal alternative minimum tax (discussed below) to
which certain taxpayers are subject. Further, a private activity bond
which would otherwise be a qualified tax-exempt private activity bond will
not, under Internal Revenue Code Section 147(a), be a qualified bond for
any period during which it is held by a person who is a "substantial user"
of the facilities or by a "related person" of such a substantial user.
This "substantial user" provision is applicable primarily to exempt
facility bonds, including industrial development bonds. The Trust may not
be an appropriate investment for entities which are "substantial users"
(or persons related thereto) of such exempt facilities, and such persons
should consult their own tax advisers before purchasing shares. A
"substantial user" of such facilities is defined generally as a "non-
exempt person who regularly uses part of a facility" financed from the
proceeds of exempt facility bonds. Generally, an individual will not be
a "related person" under the Internal Revenue Code unless such investor
or the investor's immediate family (spouse, brothers, sisters and
immediate descendants) own directly or indirectly in the aggregate more
than 50% in value of the equity of a corporation or partnership which is
a "substantial user" of a facility financed from the proceeds of exempt
facility bonds. In addition, limitations on the dollar amount of private
activity bonds which each state may issue were revised downward by the Tax
Reform Act, which will reduce the supply of such bonds. The value of the
Trust's portfolio could be affected if there is a reduction in the
availability of such bonds. That value may also be affected by a 1988
U.S. Supreme Court decision upholding the constitutionality of the
imposition of a Federal tax on the interest earned on Municipal Securities
issued in bearer form.

A Municipal Security is treated as a taxable private activity bond
under a test for (a) a trade or business use and security interest, or (b)
a private loan restriction. Under the trade or business use and security
interest test, an obligation is a private activity bond if (i) more than
10% of bond proceeds are used for private business purposes and (ii) 10%
or more of the payment of principal or interest on the issue is directly
or indirectly derived from such private use or is secured by the privately
used property or the payments related to the use of the property. For
certain types of uses, a 5% threshold is substituted for this 10%
threshold. (The term "private business use" means any direct or indirect
use in a trade or business carried on by an individual or entity other
than a state or municipal governmental unit.) Under the private loan
restriction, the amount of bond proceeds which may be used to make private
loans is limited to the lesser of 5% or $5.0 million of the proceeds.
Thus, certain issues of Municipal Securities could lose their tax-exempt
status retroactively if the issuer fails to meet certain requirements as
to the expenditure of the proceeds of that issue or use of the bond-
financed facility. The Trust makes no independent investigation of the
users of such bonds or their use of proceeds. If the Trust holds a bond
that loses its tax-exempt status retroactively, an adjustment to the tax-
exempt income previously paid to shareholders may result.

The Federal alternative minimum tax is designed to ensure that all
taxpayers pay some tax, even if they have no other income tax obligation.
This is accomplished in part by including in taxable income certain tax
preference items in arriving at alternative minimum taxable income. The
Tax Reform Act made tax-exempt interest from certain private activity
bonds a tax preference item for purposes of the alternative minimum tax
on individuals and corporations. Any exempt-interest dividend paid by a
regulated investment company will be treated as interest on a specific
private activity bond to the extent of its proportionate share of the
interest on such bonds received by the regulated investment company. The
U.S. Treasury is authorized to issue regulations implementing this
provision. In addition, corporate taxpayers subject to the alternative
minimum tax may, under some circumstances, have to include exempt-interest
dividends in calculating their alternative minimum taxable income in
situations where the "adjusted current earnings" of the corporation
exceeds its alternative minimum taxable income. The Trust may hold
Municipal Securities the interest on which (and thus a proportionate share
of the exempt-interest dividends paid by the Trust) will be subject to the
Federal alternative minimum tax. For fiscal year 1993, approximately 6.78%
of the Trust dividends paid to shareholders were a tax preference item for
shareholders subject to the Federal alternative minimum tax. The Trust
anticipates that under normal circumstances it will not purchase any such
securities in an amount greater than 20% of the Trust's total assets.

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

Other Investment Techniques and Strategies

When-Issued and Delayed Delivery Transactions. As stated in the
Prospectus, the Trust may invest in Municipal Securities on a "when-
issued" or "delayed delivery" basis. Payment for and delivery of the
securities generally settles within 30 days of the date the offer is
accepted. The purchase price and yield are fixed at the time the buyer
enters into the commitment. During the period between the time of
commitment and settlement, no payment is made by the Trust to the issuer
and no interest accrues to the Trust from the investment. However, the
Trust intends to be as fully invested as possible and will not invest in
when-issued securities if its income or net asset value will be materially
adversely affected. At the time the Trust makes the commitment to
purchase a Municipal Security on a when-issued basis, it will record the
transaction on its books and reflect the value of the security in
determining its net asset value. It will also segregate cash or liquid
high-grade Municipal Securities equal in value to the commitment for the
when-issued securities. While when-issued securities may be sold prior
to settlement date, the Trust intends to acquire the securities upon
settlement unless a prior sale appears desirable for investment reasons.
There is a risk that the yield available in the market when delivery
occurs may be higher than the yield on the security acquired.

Repurchase Agreements. The Trust may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Trust
shares, or pending the settlement of purchases of portfolio securities.
In a repurchase transaction, the Trust acquires a security, from, and
simultaneously resells it to, an approved vendor which satisfies the
requirements of Rule 2a-7. The resale price exceeds the purchase price
by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. The majority
of these transactions run from day to day, and delivery pursuant to the
resale typically will occur within one to five days of the purchase.
Repurchase agreements are considered loans under the Investment Company
Act, collateralized by the underlying security. The Trust's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase
price to fully collateralize the repayment obligation. Additionally, the
Manager will impose creditworthiness requirements to confirm that the
vendor is financially sound and will continuously monitor the collateral's
value.

Loans of Portfolio Securities. The Trust may lend its portfolio
securities subject to the restrictions stated in the Prospectus, to
attempt to increase the Trust's income for liquidity purposes. Under
applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, be at least equal to the value of
the loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities)
or other cash equivalents in which the Trust is permitted to invest. To
be acceptable as collateral, letters of credit must obligate a bank to pay
amounts demanded by the Trust if the demand meets the terms of the letter.
Such terms and the issuing bank must be satisfactory to the Trust. The
Trust receives an amount equal to the dividends or interest on loaned
securities and also receives one or more of: (a) negotiated loan fees, (b)
interest on securities used as collateral, or (c) interest on short-term
debt securities purchased with such loan collateral; either type of
interest may be shared with the borrower. The Trust may also pay
reasonable finder's, custodian and administrative fees and will not lend
its portfolio securities to any officer, trustee, employee or affiliate
of the Trust or the Manager. The terms of the Trust's loans must meet
certain tests under the Internal Revenue Code and permit the Trust to
reacquire loaned securities on five days' notice or in time to vote on any
important matter. Income from securities loans is not included in the
exempt-interest dividends paid by the Trust.

SPECIAL INVESTMENT CONSIDERATIONS - CALIFORNIA
MUNICIPAL SECURITIES

As stated in the Prospectus, the values of the Trust's California
Municipal Securities are highly sensitive to the fiscal stability of
California and its subdivisions, agencies, instrumentalities or
authorities, which issue the Municipal Securities in which the Trust
concentrates its investments. Certain amendments to the California State
constitution, legislative measures, executive orders, civil actions and
voter initiatives in recent years that could adversely affect the ability
of California issuers to pay interest and principal on Municipal
Securities are described below. The following constitutes only a brief
summary, and is based on information drawn from the relevant statutes and
certain other publicly available information. The Trust has not
independently verified such information.

Changes in California constitutional and other laws during the last
several years have caused concerns about the ability of California state
and municipal issuers to obtain sufficient revenue to pay their bond
obligations. In 1978, California voters approved an amendment to the
California Constitution known as Proposition 13, which added Article XIIIA
to the California Constitution. Article XIIIA limits ad valorem taxes on
real property and restricts the ability of taxing entities to increase
real property taxes. However, legislation passed subsequent to
Proposition 13 provided for the redistribution of California's General
Fund surplus to local agencies, the reallocation of revenues to local
agencies and the assumption of certain local obligations by the state so
as to help California municipal issuers raise revenue to pay their bond
obligations. It is unknown whether additional revenue redistribution
legislation will be enacted in the future and whether, if enacted, such
legislation will provide sufficient revenue for such California issuers
to pay their obligations.

The state is also subject to another constitutional amendment,
Article XIIIB, which may have an adverse impact on California state and
municipal issuers. Article XIIIB restricts the state from spending
certain appropriations in excess of an appropriations limit imposed for
each state and local government entity. If revenues exceed such
appropriations limit, such revenues must be returned either as revisions
in the tax rates or fee schedules. In 1988, California voters approved
an initiative known as Proposition 98, which in addition to amending
Article XIIIB, amended Article XVI to require a minimum level of funding
for public schools and community colleges. In 1992-93 and 1993-94, the
state budget met part of its commitment to education through $1.8 billion
in off-book loans. The legality of these loans was challenged in a
lawsuit by the California Teachers Association. A lower court in
California has ruled against the state, and under this decision the
schools would not be required to repay these loans. If upheld on appeal,
the ruling would increase the state's officially recognized 1994-95 year-
end deficit by $1.8 billion.

Because of the uncertain impact of the aforementioned legislation,
the possible inconsistencies in the respective terms of the statutes and
the impossibility of predicting the level of future appropriations and
applicability of related statutes to such questions, it is not currently
possible to assess the impact of such legislation and policies on the long
term ability of the State of California and California municipal issuers
to pay interest or repay principal on their obligations.

California has substantial size, wealth and a diverse economy. It
is the largest in population of the states, and accounts for about 13% of
personal income in the U.S. Through the 1980s, the rate of state
population growth was more than twice that for the country. However,
although the national economic recovery continued at a strong pace in the
first quarter of 1994, California is still experiencing the effects of a
recession. However, the state's budget for fiscal year 1994-95 assumes
that the state will begin to recover from recessionary conditions in 1994,
with a modest upturn in 1994 and continuing in 1995. Substantial
contraction in California's defense related industries, overbuilding in
commercial real estate, and consolidation and decline in the state's
financial services industry will likely produce slower overall growth for
several years.

Although the median home prices in the state have continued to
decline, home sales have increased sharply. Median home prices in July
1994 were down 1.0% from July 1993, while home sales increased 4.6% from
a year earlier. Unemployment, however, has been above the national
average since 1990. In July 1994, unemployment in California stood at
9.0% versus 6.1% for the nation. Overall, the state has lost
approximately 600,000 jobs since the spring of 1990, notwithstanding the
continued increase in the state's population. Employment is expected to
fall 0.3% in 1994. With a slow recovery, economic forecasts predict
annual growth in employment of 1.5% and 1.6% in 1995 and 1996,
respectively. Personal bankruptcy filings also continue to increase, as
statewide filings rose 17% in 1992.

These economic difficulties have exacerbated the budget imbalance
which has been evident since 1985-86. Since that time, the state has
recorded General Fund operating deficits in five of the past six fiscal
years. Many of these problems have been attributable to a great
population increase which has increased demand for educational and social
services at a pace far greater than the growth in revenues.

By June 30, 1994, the General Fund had an accumulated deficit, on a
budgeted basis, of approximately $2.0 billion. In addition, the deficit
over the previous three years had exhausted the state's available cash
reserves and resources. In July and August, 1994, the state was required
to issue a total of $7 billion of short-term revenue anticipation warrants
to fund, in part, the state's cash flow management needs for the 1994-95
fiscal year.

On July 8, 1994, the Governor signed into law a new $57.5 billion
budget which includes General Fund spending of $40.9 billion, up 4.2% from
the level of spending during the 1993-94 fiscal year. The budget also
envisions General Fund spending climbing another 8.4% in the 1995-96
fiscal year. The budget forecasts levels of revenue and expenditures
which will result in operating surpluses in both 1994-95 and 1995-96,
leading to the elimination of the budget deficit by June 30, 1996.

Because of the State of California's continuing budget problems, the
state's General Obligation bonds were downgraded in July 1994 from Aa to
A1 by Moody's, from A+ to A by Standard & Poor's and from AA to A by
Fitch. All three rating agencies expressed uncertainty in the state's
ability to balance its budget by 1996.

On January 17, 1994, Northridge, California experienced an earthquake
that registered 6.8 on the Richter scale, resulting in significant
property damage to private and public facilities throughout the Los
Angeles and Ventura Counties, and to parts of the Orange and San
Bernardino Counties. The total amount of damage is estimated to be
between $13 billion and $20 billion. In mid-February Congress approved
an earthquake relief package totaling about $8.6 billion, bringing total
federal support to $9.5 billion. The California legislature approved $2
billion in bond financing in mid-March for earthquake recovery costs and
seismic safety improvements. However, the bond issue was rejected by
California voters in the June 1994 election. It now appears that the
state will pay for its share of the recovery costs through a reallocation
of existing funds and borrowing from the federal government. The
Commission on State Finance believes that, although it may carry long-term
implications for the City of Los Angeles, the earthquake will not derail
the state's economic recovery.

INVESTMENT RESTRICTIONS

The Trust's significant investment restrictions are set forth in the
Prospectus. The following investment restrictions are also fundamental
policies of the Trust and, together with the fundamental policies and
investment objective described in the Prospectus, cannot be changed
without the vote of a "majority" of the Trust's outstanding shares. Under
the Investment Company Act, such a "majority" vote is defined as the vote
of the holders of the lesser of (i) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present or represented by proxy, or (ii)
more than 50% of the outstanding shares. Under these additional
restrictions, the Trust cannot: (1) invest in commodities or commodity
contracts, or invest in interests in oil, gas, or other mineral
exploration or development programs; (2) invest in real estate; however,
the Trust may purchase Municipal Bonds or Notes secured by interests in
real estate; (3) make short sales of securities or purchase securities on
margin, except for short-term credits necessary for the clearance of
purchases and sales of portfolio securities; (4) invest in or hold
securities of any issuer if those officers and Trustees of the Trust or
the Manager individually owning more than 0.5% of the securities of such
issuer together own more than 5% of the securities of such issuer; (5)
underwrite securities of other companies; or (6) invest in securities of
other investment companies except as they may be acquired as part of a
merger, consolidation or acquisition of assets.

For purposes of investment restriction (4) above and the investment
restrictions in the Prospectus, the identification of the "issuer" of a
Municipal Security depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond,
if that bond is backed only by the assets and revenues of the
nongovernmental user, then such nongovernmental user would be deemed to
be the sole issuer. However, if in either case the creating government
or some other entity guarantees the security, such guarantee would be
considered a separate security and would be treated as an issue of such
government or other agency. For purposes of the Trust's compliance with
Rule 2a-7 when investing in puts (see "Puts and Stand-by Commitments,"
above), a put will be considered to be issued by the party to which the
Trust will look for payment of the exercise price, and an unconditional
put will be considered to be a guarantee of the underlying security.

In applying the restrictions in the Prospectus as to the Trust's
investments, the Manager will consider a nongovernmental user of
facilities financed by industrial development bonds as being in a
particular industry, despite the fact that there is no industry
concentration limitation as to municipal securities the Trust may own.
Although this application of the restriction is not technically a
fundamental policy of the Trust, it will not be changed without
shareholder approval. Should any such change be made, the Prospectus
and/or Additional Statement will be supplemented to reflect the change.

TRUSTEES AND OFFICERS

The Trustees and officers of the Trust and their principal business
affiliations and occupations during the past five years are listed below.
Each Trustee is a trustee, director or managing general partner of Daily
Cash Accumulation Fund, Inc., Centennial Tax Exempt Trust, Centennial
Money Market Trust, Centennial Government Trust, Centennial America Fund,
L.P., Centennial New York Tax Exempt Trust, Oppenheimer Variable Account
Funds, Oppenheimer Champion High Yield Fund, Oppenheimer Main Street
Funds, Inc., Oppenheimer Total Return Fund, Inc., Oppenheimer Equity
Income Fund, Oppenheimer High Yield Fund, Oppenheimer Cash Reserves,
Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Income & Growth
Fund, Oppenheimer Strategic Short-Term Income Fund, Oppenheimer Strategic
Investment Grade Bond Fund, Oppenheimer Limited-Term Government Fund,
Oppenheimer Tax-Exempt Bond Fund, Oppenheimer Integrity Funds and The New
York Tax-Exempt Income Fund, Inc. (collectively referred to as the "Denver
OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of
all of the funds listed. Messrs. Bishop, Bowen, Donohue, Farrar and Zack
hold similar positions with all such funds. As of September 30, 1994, the
Trustees and officers of the Trust in the aggregate owned less than 1% of
the Trust's outstanding shares.

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

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

CHARLES CONRAD, JR., Trustee
1447 Vista del Cerro, Las Cruces, New Mexico 88005
Vice President of McDonnell Douglas Space Systems Co.; formerly
associated with the National Aeronautics and Space Administration.

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

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

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

ROBERT M. KIRCHNER, Trustee
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).

NED M. STEEL, Trustee
3416 South Race Street, Denver, Colorado 80110
Chartered property and Casualty Underwriter; formerly Senior Vice
President and a Director of Van Gilder Insurance Corp. (insurance
brokers).

JAMES C. SWAIN, Chairman*
3410 South Galena Street, Denver, Colorado 80231
President and a Director of the Manager; Vice Chairman of OMC;
formerly Chairman of the Transfer Agent.

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

MICHAEL CARBUTO, Vice President and Portfolio Manager
Two World Trade Center, New York, New York 10048
Vice President of the Manager and OMC; an officer of other
OppenheimerFunds.

GEORGE C. BOWEN, Vice President, Treasurer, and Secretary
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President, Treasurer, Assistant Secretary and a director
of the Manager; Senior Vice President and Treasurer of OMC; Vice
President and Treasurer of OFDI and HarbourView; Vice President,
Treasurer and Secretary of the Transfer Agent and SFSI; an officer
of other OppenheimerFunds.

ROBERT BISHOP, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of OMC/Mutual Fund Accounting; an officer
of other OppenheimerFunds; formerly a Fund Controller for the
Manager, prior to which he was an Accountant for Yale & Seffinger,
P.C., an accounting firm, and previously an Accountant and
Commissions Supervisor for Stuart James Company, Inc., a broker-
dealer.

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

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

[FN]
- ------------------
*A Trustee who is an "interested person" of the Trust as defined in the
Investment Company Act.

Remuneration of Trustees and Officers. The officers of the Trust
(including Messrs. Fossel and Swain) are affiliated with the Manager and
receive no salary or fee from the Trust. The Trust has an Audit and
Review Committee, comprised of William A. Baker (Chairman), Charles
Conrad, Jr. and Robert M. Kirchner. This Committee meets regularly to
review audits, audit procedures, financial statements and other financial
and operational matters of the Trust. During the fiscal year ended June
30, 1994, the remuneration (including expense reimbursements) paid by the
Trust to the Trustees as a group (excluding Messrs. Fossel and Swain) for
services as trustees and as members of one or more committees totaled
$1,825.

Major Shareholders. As of September 30, 1994, A.G. Edwards & Sons, Inc.
("Edwards"), 1 North Jefferson Avenue, St. Louis, MO 63103, was the record
owner of 59,263,545.430 shares of the Trust (approximately 99.7% of
outstanding shares). The Trust has been informed that the shares held of
record by Edwards were beneficially owned by its brokerage clients. As of
that date, no other person owned of record or was known by the Trust to
own beneficially 5% or more of the Trust's outstanding shares.

INVESTMENT MANAGEMENT SERVICES

The Manager is wholly-owned by OMC, which is a wholly-owned
subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding company
controlled by Massachusetts Mutual Life Insurance Company. The remaining
stock of OAC is owned by (i) certain of OMC's directors and officers, some
of whom may also serve as officers of the Trust, and two of whom (Messrs.
Jon S. Fossel and James C. Swain) serves as Trustee of the Trust and (ii)
Edwards, which owns less than 5% of its equity.

The management fee is payable monthly to the Manager under the terms
of the investment advisory agreement between the Manager and the Trust
(the "Agreement"), and is computed on the aggregate net assets of the
Trust as of the close of business each day. The Agreement requires the
Manager, at its expense, to provide the Trust with adequate office space,
facilities and equipment, and to provide and supervise the activities of
all administrative and clerical personnel required to provide effective
administration for the Trust, including the compilation and maintenance
of records with respect to its operations, the preparation and filing of
specified reports, and the composition of proxy materials and registration
statements for continuous public sale of shares of the Trust. Expenses
not expressly assumed by the Manager under the Agreement or by the
Distributor of the shares of the Trust, are paid by the Trust. A
description of examples of such expenses is in the Prospectus.

The Agreement contains no expense limitation. However, independently
of the Agreement, the Manager has undertaken that the total expenses of
the Trust in any fiscal year shall not exceed the most stringent
applicable state regulatory limitation. California's regulatory
limitation is currently 2.5% of the first $30 million of net assets, 2%
on the next $70 million of net assets and 1.5% of assets in excess of $100
million. In addition, the Manager has undertaken that the total expenses
of the Trust, in any fiscal year of the Trust, exclusive of taxes,
interest, brokerage commissions and non-recurring expenses, including
litigation, shall not exceed 0.80% of the average annual net assets of the
Trust. The payment of the management fee at the end of any month will be
reduced so that there will not be any accrued but unpaid liability under
those expense limitations. Any assumption of the Trust's expenses under
either limitation lowers the Trust's overall expense ratio and increases
its yield and total return during the time such expenses are assumed. The
Manager reserves the right to vary the amount of expenses assumed or
eliminate the assumption of expenses altogether. For the fiscal years
ended June 30, 1992, 1993 and 1994, the management fees payable by the
Trust would have been $203,420, $280,452 and $327,466, respectively.
Those amounts do not reflect the effect of the expense assumptions of
$43,058, $33,188 and $48,265, respectively, in those periods by the
Manager.

The Agreement provides that in the absence of willful misfeasance,
bad faith, or gross negligence in the performance of its duties or
reckless disregard of its obligations and duties thereunder, the Manager
is not liable for any loss sustained by reason of any good faith errors
or omissions in connection with any matters covered by the Agreement. The
Agreement permits the Manager to act as investment adviser for any other
person, firm or corporation and to use the name "Centennial" in connection
with one or more additional companies for which it may act as investment
adviser or general distributor. If the Manager shall no longer act as
investment adviser to the Trust, the right of the Trust to use the name
"Centennial" as part of its name may be withdrawn.

Portfolio Transactions. Portfolio decisions are based upon the
recommendations and judgment of the Manager subject to the overall
authority of the Board of Trustees. As most purchases made by the Trust
are principal transactions at net prices, the Trust incurs little or no
brokerage costs. The Trust deals directly with the selling or purchasing
principal or market maker without incurring charges for the services of
a broker on its behalf unless it is determined that a better price or
execution may be obtained by using the services of a broker. Purchases
of portfolio securities from underwriters include a commission or
concession paid by the issuer to the underwriter, and purchases from
dealers include a spread between the bid and asked prices.

The Trust seeks to obtain prompt and reliable execution of orders at
the most favorable net price. If brokers are used for portfolio
transactions, transactions may be directed to brokers furnishing execution
and research services. The research services provided by a particular
broker may be useful only to one or more of the advisory accounts of the
Manager and its affiliates, and investment research received for the
commissions of those other accounts may be useful both to the Trust and
one or more of such other accounts. Such research, which may be supplied
by a third party at the instance of a broker, includes information and
analyses on particular companies and industries as well as market or
economic trends and portfolio strategy, receipt of market quotations for
portfolio evaluations, information systems, computer hardware and similar
products and services. If a research service also assists the Manager in
a non-research capacity (such as bookkeeping or other administrative
functions), then only the percentage or component that provides assistance
to the Manager in the investment decision-making process may be paid for
in commission dollars. The research services provided by brokers broaden
the scope and supplement the research activities of the Manager by making
available additional views for consideration and comparisons, and enabling
the Manager to obtain market information for the valuation of securities
held in the Trust's portfolio or being considered for purchase. In the
rare instances where the Trust pays commissions for research, the Board
of Trustees, including the independent Trustees of the Trust, will review
information furnished by the Manager as to the commissions paid to brokers
furnishing such services in an effort to ascertain that the amount of such
commissions was reasonably related to the value or the benefit of such
services. The Trust does not direct the handling of purchases or sales
of portfolio securities, whether on a principal or agency basis, to
brokers for selling shares of the Trust. No portfolio transactions are
handled by brokers which are affiliated with the Trust or the Manager if
that broker is acting as principal. The Board of Trustees has permitted
the Manager to use concessions on fixed price offerings to obtain
research, in the same manner as is permitted for agency transactions. The
Trust's policy of investing in short-term debt securities with maturities
of less than one year results in high portfolio turnover. However, since
brokerage commissions, if any, are small and securities are usually held
to maturity, high turnover does not have an appreciable adverse effect
upon the net asset value or income of the Trust.

Other funds advised by the Manager have investment objectives and
policies similar to that of the Trust. Such other funds may purchase or
sell the same securities at the same time as the Trust, which could affect
the supply or price of such securities. If two or more of such funds
purchase the same security on the same day from the same dealer, the
Manager may average the price of the transactions and allocate the cost
among such funds.

SERVICE PLAN

The Trust has adopted a service plan (the "Plan") under Rule 12b-1
of the Investment Company Act, pursuant to which the Trust will reimburse
the Distributor quarterly for a portion of its costs incurred in
connection with the services rendered to the Trust, as described in the
Prospectus. No payment will be made by the Distributor to any dealer,
bank or other institution ("Recipient") if the aggregate net asset value
of the Trust shares held by it or its customers at the end of a calendar
quarter is less than the minimum level of qualified holdings, if any,
established under the Plan from time to time by the "Independent
Trustees". Currently, no minimum level of qualified holdings has been
established by the Board of Trustees. The Distributor will make monthly
payments to a Recipient if the aggregate net asset value of the Trust's
shares held by it or its customers are in excess of $20 million. For the
Trust's fiscal year ended June 30, 1994, payments under the Plan totalled
$131,944, all of which was paid by the Distributor to Recipients,
including $12 paid to an affiliate of the Distributor.

The Distributor has entered into Supplemental Distribution Assistance
Agreements ("Supplemental Agreements") under the Plan with selected
dealers distributing shares of Oppenheimer Cash Reserves, Centennial
Government Trust, Centennial New York Tax Exempt Trust, Centennial America
Fund, L.P. and the Trust. Quarterly payments by the Distributor for
distribution-related services will range from 0.10% to 0.30%, annually,
of the average net asset value of shares of the above-mentioned funds
owned during the quarter beneficially or of record by the dealer or its
customers. However, no payment shall be made to any dealer for any
quarter during which the average net asset value of shares of the above-
mentioned funds owned during that quarter by the dealer or its customers
is less than $5 million. Payments made pursuant to Supplemental
Agreements are not a Trust expense, but are made by the Distributor out
of its own resources or out of the resources of the Manager which may
include profits derived from the advisory fee it receives from the Trust.
Payments to affiliates of the Distributor are not permitted under the
Supplemental Agreements.

The Plan shall, unless terminated as described below, continue in
effect from year to year but only so long as such continuance is
specifically approved at least annually by the Trust's Board of Trustees
including its Independent Trustees by a vote cast in person at a meeting
called for that purpose. The Supplemental Agreements are subject to the
same renewal requirement. The Plan and the Supplemental Agreements may
be terminated at any time by the vote of a majority of the Independent
Trustees or by the vote of the holders of a "majority" of the Trust's
outstanding voting securities. The Supplemental Agreements will
automatically terminate in the event of their "assignment" (as defined in
the Investment Company Act), and each may be terminated by the
Distributor: (i) in the event the Trust amends the Plan, or (ii) if the
net asset value of shares of the above-mentioned funds covered by
Supplemental Agreements held by the dealer or its customers is less than
$5 million for two or more consecutive quarters. A dealer may terminate
a Supplemental Agreement at any time upon giving 30 days' notice. The
Plan may not be amended without shareholder approval, as set forth above,
to increase materially the amount of payments to be made, and all material
amendments must be approved by the Board and the Independent Trustees.

Under the Plan, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Trust shares held by the
Recipient for itself and its customers did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Trust's Independent Trustees. The Board of Trustees has set the fee at
the maximum rate and set no minimum amount. The Plans permit the
Distributor and the Manager to make additional distribution payments to
Recipients from their own resources (including profits from advisory fees)
at no cost to a Trust. The Distributor and the Manager may, in their sole
discretion, increase or decrease the amount of distribution assistance
payments they make to Recipients from their own assets.

Each Recipient who is to receive distribution payments for any month
or quarter shall certify in writing that the aggregate payments to be
received from the Trust and the Distributor during that month or quarter
do not exceed the Recipient's costs in rendering services and for the
maintenance of accounts during the month or quarter, and will reimburse
the Trust for any excess.

The Glass-Steagall Act and other applicable laws and regulations,
among other things, generally prohibit Federally-chartered or supervised
banks from engaging in the business of underwriting, selling or
distributing securities as principals. Accordingly, the Distributor may
pay banks only for sales made on an agency basis or for the performance
of administrative and shareholder servicing functions. While the matter
is not free from doubt, the Manager believes that such laws do not
preclude a bank from performing the services required of a Recipient.
However, judicial or administrative decisions or interpretations of such
laws, as well as changes in either Federal or state statutes or
regulations relating to the permissible activities of banks or their
subsidiaries or affiliates, could prevent certain banks from continuing
to perform all or a part of these services. If a bank were so prohibited,
shareholders of the Trust who were clients of such bank would be permitted
to remain as shareholders, and if a bank could no longer provide those
service functions, alternate means for continuing the servicing of such
shareholders would be sought. In such event, shareholders serviced by
such bank might no longer be able to avail themselves of any automatic
investment or other services then being provided by such bank. It is not
expected that shareholders would suffer any adverse financial consequences
as a result of any of those occurrences. The Board of Trustees will
consider appropriate modifications to the Trust's operations, including
discontinuance of payments under the Plan to such institutions, in the
event of any future change in such laws or regulations which may adversely
affect the ability of such institutions to provide these services. In
addition, certain banks and financial institutions may be required to
register as dealers under state law.

While the Plan is in effect, the Treasurer of the Trust shall provide
a report to the Board of Trustees in writing at least quarterly on the
amount of all payments made pursuant to the Plan and the identity of each
Recipient that received any such payment and the purposes for which the
payments were made. The Plan further provides that while it is in effect,
the selection and nomination of those Trustees of the Trust who are not
"interested persons" of the Trust is committed to the discretion of the
Independent Trustees. This does not prevent the involvement of others in
such selection and nomination if the final decision as to the selection
or nomination is approved by a majority of the Independent Trustees.

PURCHASE, REDEMPTION AND PRICING OF SHARES

Determination of Net Asset Value Per Share. The net asset value per share
of the Trust is determined twice a day, as of 12:00 Noon and 4:00 P.M.,
on each day the New York Stock Exchange (the "Exchange") is open (a
"regular business day"), by dividing the Trust's net assets (the total
value of the Trust's portfolio securities, cash and other assets less all
liabilities) by the total number of shares outstanding. Shares of the
Trust are sold at their offering price (net asset value, without a sales
charge) as described in the Prospectus. The Exchange's most recent annual
holiday schedule states that it will close New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. The Exchange may also close on other days.
Dealers other than Exchange members may conduct trading in Municipal
Securities on certain days on which the Exchange is closed (e.g., Good
Friday), so that securities
of the same type held by the Trust may be traded, and its net asset value
per share may be significantly affected, on such days when shareholders
may not purchase or redeem shares.

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

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

As long as the Trust uses Rule 2a-7, the Trust must abide by certain
conditions described in the Prospectus. Some of those conditions which
relate to portfolio management are that the Trust must: (i) maintain a
dollar-weighted average portfolio maturity not in excess of 90 days; (ii)
limit its investments, including repurchase agreements, to those
instruments which are denominated in U.S. dollars, and which are rated in
one of the two highest short-term rating categories by at least two
"nationally-recognized statistical rating organizations" ("NRSROs"), as
defined in the Rule, or by one NRSRO if only one NRSRO has rated the
security; an instrument that is not rated must be of comparable quality
as determined under the Board procedures; and (iii) not purchase any
instruments with a remaining maturity of more than one year. Under Rule
2a-7, the maturity of an instrument is generally considered to be its
stated maturity (or in the case of an instrument called for redemption,
the date on which the redemption payment must be made), with special
exceptions for certain variable rate demand and floating rate instruments.
Repurchase agreements and securities loan agreements are, in general,
treated as having a maturity equal to the period scheduled until
repurchase or return, or if subject to demand, equal to the notice period.

While the amortized cost method provides certainty in valuation,
there may be periods during which the value of an instrument as determined
by amortized cost is higher or lower than the price the Trust would
receive if it sold the instrument. During periods of declining interest
rates, the daily yield on shares of the Trust may tend to be lower (and
net investment income and daily dividends higher) than a like computation
made by a fund with identical investments utilizing a method of valuation
based upon market prices or estimates of market prices for its portfolio.
Thus, if the use of amortized cost by the Trust resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in
the Trust would be able to obtain a somewhat higher yield than would
result from investment in a fund utilizing solely market values, and
existing investors in the Trust would receive less investment income than
if the Trust were priced at market value. Conversely, during periods of
rising interest rates, the daily yield on Trust shares will tend to be
higher and its aggregate value lower than that of a portfolio priced at
market value. A prospective investor would receive a lower yield than
from an investment in a portfolio priced at market value, while existing
investors in the Trust would receive more investment income than if the
Trust were priced at market value.

Redemption of Shares. Information on how to redeem shares of the Trust
is stated in the Prospectus. The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash. If, however,
the Board of Trustees determines that it would be detrimental to the best
interests of the remaining shareholders of the Trust to make payment
wholly in cash, the redemption price may be paid in whole or in part by
a distribution in kind of securities from the portfolio of the Trust in
lieu of cash or in conformity with applicable Securities and Exchange
Commission rules. The Trust has elected to be governed by Rule 18f-1
under the Investment Company Act, pursuant to which the Trust is obligated
to redeem shares solely in cash up to the lesser of $250,000 or 1% of the
net assets of the Trust during any 90-day period for any one shareholder.
If shares are redeemed in kind, the redeeming shareholder might incur
transaction or other costs in converting the assets to cash. The method
of valuing securities used to make redemptions in kind will be the same
as the method of valuing securities described under "Determination of Net
Asset Value" above, and such valuation will be made as of the same time
the redemption price is determined.

The Trust's Board of Trustees has the right to cause the involuntary
redemption of shares held in any account if the aggregate net asset value
of such shares is less than $200 or such lesser amount as the Board may
fix. Should the Board elect to exercise this right, it may also fix, in
accordance with the Investment Company Act, the requirements for any
notice to be given to the shareholder(s) in question (not less than 30
days) or may set requirements for permission to allow the shareholder to
increase the investment so that the shares would not be involuntarily
redeemed.

Expedited Redemption Procedures. Under the Expedited Redemption Procedure
available to direct shareholders of the Trust, discussed in the
Prospectus, the wiring of redemption proceeds may be delayed if the
Trust's Custodian bank is not open for business on a day that the Trust
would normally authorize the wire to be made, which is usually the same
day for redemptions prior to 12:00 Noon and the Trust's next regular
business day for redemptions between 12:00 Noon and 4:00 P.M. In those
circumstances, the wire will not be transmitted until the next bank
business day on which the Trust is open for business and no dividends will
be paid on the proceeds of redeemed shares awaiting transfer by wire.

Dividend Reinvestment in Another Fund. Direct shareholders of the Trust
may elect to reinvest all dividends and/or distributions in shares of any
of the other funds listed in the Prospectus as "Eligible Funds" at net
asset value without sales charge. To elect this option, a shareholder
must notify the Transfer Agent in writing, and either must have an
existing account in the fund selected for reinvestment or must obtain a
prospectus for that fund and application from the Transfer Agent
to establish an account. The investment will be made at the net asset
value per share in effect at the close of business on the payable date of
the dividend or distribution.

YIELD INFORMATION

The Trust's current yield is calculated for a seven-day period of
time in accordance with regulations adopted under the Investment Company
Act. First, a base period return is calculated for the seven-day period
by determining the net change in the value of a hypothetical pre-existing
account having one share at the beginning of the seven-day period. The
change includes dividends declared on the original share and dividends
declared on any shares purchased with dividends on that share, but such
dividends are adjusted to exclude any realized or unrealized capital gains
or losses affecting the dividends declared. Next, the base period return
is multiplied by 365/7, to obtain the current yield to the nearest
hundredth of one percent. The compounded effective yield for a seven-day
period is calculated by (a) adding 1 to the base period return (obtained
as described above), (b) raising the sum to a power equal to 365 divided
by 7 and (c) subtracting 1 from the result. For the seven-day period
ended June 30, 1994, the Trust's current yield was 2.24% and its
compounded effective yield was 2.27%.

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

The Trust's "tax equivalent yield" adjusts the Trust's current yield,
as calculated above, by a stated combined Federal and California tax rate.
The tax equivalent yield is computed by dividing the tax-exempt portion
of the Trust's current yield by one minus a stated income tax rate and
adding the result to the portion (if any) of the Trust's current yield
that is not tax-exempt. The tax equivalent yield may be compounded as
described above to provide a compounded effective tax equivalent yield.
The tax equivalent yield may be used to compare the tax effects of income
derived from the Trust with income from taxable investments at the tax
rates stated. Appendix B includes a tax equivalent yield table, based on
various effective tax brackets for individual taxpayers. Such tax
brackets are determined by a taxpayer's Federal and state taxable income
(the net amount subject to Federal and state income tax after deductions
and exemptions). The tax equivalent yield table assumes that the investor
is taxed at the highest bracket, regardless of whether a switch to non-
taxable investments would cause a lower bracket to apply, and that state
income tax payments are fully deductible for income tax purposes. For
taxpayers with income above certain levels, otherwise allowable itemized
deductions are limited. For the seven-day period ended June 30, 1994, the
Trust's tax-equivalent yield was 4.17% and its tax-equivalent compounded
effective yield was 4.22% for an investment subject to a 46.24% combined
effective tax rate.

Yield information may be useful to investors in reviewing the Trust's
performance. The Trust's yield may be compared to that of other
investments, by citing various indices such as The Bank Rate Monitor
National Index (provided by Bank Rate Monitor (Trademark) ), which
measures the average rate paid on bank money market accounts, NOW accounts
and certificates of deposit by the 100 largest banks and thrift
institutions in the top ten metropolitan areas. However, a number of
factors should be considered before using yield information as a basis for
comparison with other investments. An investment in the Trust is not
insured. Its yield is not guaranteed and normally will fluctuate on a
daily basis. The yield for any given past period is not an indication or
representation by the Trust of future yields or rates of return on its
shares. The Trust's yield is affected by portfolio quality, portfolio
maturity, type of instruments held and operating expenses. The Trust's
performance reflects the voluntary assumption of expenses by the Manager,
absent which such figures would have been lower than those shown above.
When comparing the Trust's yield and investment risk with that of other
investments, investors should understand that certain other investment
alternatives, such as certificates of deposit, U.S. Government Securities,
money market instruments or bank accounts may provide fixed yields or
yields that may vary above a stated minimum, and also that bank accounts
may be insured or guaranteed. Certain types of bank accounts may not pay
interest when the balance falls below a specified level and may limit the
number of withdrawals by check per month. In order to compare the Trust's
dividends to the rate of return on taxable investments, federal and state
income taxes on such investments should be considered.

ADDITIONAL INFORMATION

Description of the Trust. The Trust's Declaration of Trust contains an
express disclaimer of shareholder or Trustee liability for the Trust's
obligations, and provides for indemnification and reimbursement of
expenses out of its property for any shareholder held personally liable
for its obligations. The Declaration of Trust also provides that the
Trust shall, upon request, assume a defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any
judgment thereon. Thus, while Massachusetts law permits a shareholder of
a trust (such as the Trust) to be held personally liable as a "partner"
for the Trust's obligations under certain circumstances, the risk of a
Trust shareholder incurring any financial loss on account of such
shareholder liability is limited to the relatively remote circumstance in
which the Trust itself would be unable to meet its obligations. Any
person doing business with the Trust, and any shareholder of the Trust,
agrees under the Trust's Declaration of Trust to look solely to the assets
of the Trust for satisfaction of any claim or demand which may arise out
of any dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law. It is not
contemplated that regular annual meetings of shareholders will be held.
The Trust will hold meetings when required to do so by the Investment
Company Act or other applicable law, or when a shareholder meeting is
called by the Trustees or upon proper request of the shareholders.
Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee.
The Trustees will call a meeting of shareholders to vote on the removal
of a Trustee upon the written request of the record holders of 10% of its
outstanding shares. In addition, if the Trustees receive a request from
at least 10 shareholders (who have been shareholders for at least six
months) holding in the aggregate shares of the Trust valued at $25,000 or
more or holding 1% or more of the Trust's outstanding shares, whichever
is less, that they wish to communicate with other shareholders to request
a meeting to remove a Trustee, the Trustees will then either make the
Trust's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense, or the
Trustees may take such other action as set forth in Section 16(c) of the
Investment Company Act.

Tax Status of the Trust's Dividends and Distributions. The Federal and
California tax treatment of the Trust's dividends to shareholders is
explained in the Prospectus under the caption "Dividends and Taxes."
Under the Internal Revenue Code, by December 31 each year the Trust must
distribute 98% of its taxable investment income earned from January 1
through December 31 and 98% of its capital gains realized in the period
from November 1 of the prior year through October 31 of the current year
or else must pay an excise tax on the amounts not distributed. While it
is presently anticipated that the Trust's distributions will meet those
requirements, the Trust's Board and Manager might determine in a
particular year that is in the best interests of the Trust not to make
distributions at the mandated levels and to pay the excise tax on the
undistributed amounts, which would reduce the amount available for
distribution to shareholders.

The Custodian and the Transfer Agent. The Custodian's responsibilities
include safeguarding and controlling the Trust's portfolio securities and
handling the delivery of portfolio securities to and from the Trust. The
Manager has represented to the Trust that its banking relationships with
the Custodian have been and will continue to be unrelated to and
unaffected by the relationships between the Trust and the Custodian. It
will be the practice of the Trust to deal with the Custodian in a manner
uninfluenced by any banking relationship the Custodian may have with the
Manager or its affiliates. The Transfer Agent (Shareholder Services,
Inc.) is responsible for maintaining the Trust's shareholder registry and
shareholder accounting records, and for shareholder servicing and
administrative functions.

General Distributor's Agreement. Under the General Distributor's
Agreement between the Trust and the Distributor, the Distributor acts as
the Trust's principal underwriter in the continuous public offering of its
shares. The General Distributor is not obligated to sell a specific
number of shares. Expenses normally attributable to sales (other than
those paid under the Service Plan), including advertising and the cost of
printing and mailing prospectuses other than those furnished to existing
shareholders, are borne by the Distributor.

Independent Auditors and Financial Statements. The independent auditors
of the Trust examine the Trust's financial statements and perform other
related audit services. They also serve as auditors for the Manager and
affiliates, and for certain other funds advised by the Manager and
affiliates.

AUTOMATIC WITHDRAWAL PLAN PROVISIONS

By requesting an Automatic Withdrawal Plan, the shareholder agrees
to the terms and conditions applicable to such plans, as stated below and
elsewhere in the Application for such Plans, the Prospectus and this
Statement of Additional Information as they may be amended from time to
time by the Trust and/or the Distributor. When adopted, such amendments
will automatically apply to existing Plans.

Trust shares will be redeemed as necessary to meet withdrawal
payments. Shares acquired without a sales charge will be redeemed first
and thereafter shares acquired with reinvested dividends and distributions
followed by shares acquired with a sales charge will be redeemed to the
extent necessary to make withdrawal payments. Depending upon the amount
withdrawn, the investor's principal may be depleted. Payments made to
shareholders under such plans should not be considered as a yield or
income on an investment. Purchases of additional shares concurrently with
withdrawals are undesirable because of sales charges on purchases when
made. Accordingly, a shareholder may not maintain an Automatic Withdrawal
Plan while simultaneously making regular purchases.

1. Shareholder Services, Inc., the Transfer Agent of the Trust, will
administer the Automatic Withdrawal Plan (the "Plan") as agent for the
person (the "Planholder") who executed the Plan authorization and
application submitted to the Transfer Agent.

2. Certificates will not be issued for shares of the Trust purchased
for and held under the Plan, but the Transfer Agent will credit all such
shares to the account of the Planholder on the records of the Trust. Any
share certificates now held by the Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the
shares represented by the certificate may be held under the Plan. Those
shares will be carried on the Planholder's Plan Statement.

3. Distributions of capital gains must be reinvested in shares of
the Trust, which will be done at net asset value without a sales charge.
Dividends may be paid in cash or reinvested.

4. Redemptions of shares in connection with disbursement payments
will be made at the net asset value per share determined on the redemption
date.

5. Checks or ACH payments will be transmitted approximately three
business days prior to the date selected for receipt of the monthly or
quarterly payment (the date of receipt is approximate), according to the
choice specified in writing by the Planholder.

6. The amount and the interval of disbursement payments and the
address to which checks are to be mailed may be changed at any time by the
Planholder on written notification to the Transfer Agent. The Planholder
should allow at least two weeks' time in mailing such notification before
the requested change can be put in effect.

7. The Planholder may, at any time, instruct the Transfer Agent by
written notice (in proper form in accordance with the requirements of the
then-current prospectus of the Trust) to redeem all, or any part of, the
shares held under the Plan. In such case, the Transfer Agent will redeem
the number of shares requested at the net asset value per share in effect
in accordance with the Trust's usual redemption procedures and will mail
a check for the proceeds of such redemption to the Planholder.

8. The Plan may, at any time, be terminated by the Planholder on
written notice to the Transfer Agent, or by the Transfer Agent upon
receiving directions to that effect from the Trust. The Transfer Agent
will also terminate the Plan upon receipt of evidence satisfactory to it
of the death or legal incapacity of the Planholder. Upon termination of
the Plan by the Transfer Agent or the Trust, shares remaining unredeemed
will be held in an uncertificated account in the name of the Planholder,
and the account will continue as a dividend-reinvestment, uncertificated
account unless and until proper instructions are received from the
Planholder, his executor or guardian, or as otherwise appropriate.

9. For purposes of using shares held under the Plan as collateral,
the Planholder may request issuance of a portion of his shares in
certificated form. Upon written request from the Planholder, the Transfer
Agent will determine the number of shares as to which a certificate may
be issued, so as not to cause the withdrawal checks to stop because of
exhaustion of uncertificated shares needed to continue payments. Should
such uncertificated shares become exhausted, Plan withdrawals will
terminate.

10. The Transfer Agent shall incur no liability to the Planholder
for any action taken or omitted by the Transfer Agent in good faith.

11. In the event that the Transfer Agent shall cease to act as
transfer agent for the Trust, the Planholder will be deemed to have
appointed any successor transfer agent to act as his agent in
administering the Plan.

<PAGE>

INDEPENDENT AUDITORS' REPORT
Centennial California Tax Exempt Trust

The Board of Trustees and Shareholders of
Centennial California Tax Exempt Trust:

We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Centennial California Tax
Exempt Trust as of June 30, 1994, the related statement of operations for
the year then ended, the statements of changes in net assets for the years
ended June 30, 1994 and 1993, and the financial highlights for the period
June 12, 1990 (commencement of operations) to June 30, 1994. These
financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned at June 30, 1994 by correspondence with
the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Centennial
California Tax Exempt Trust at June 30, 1994, the results of its
operations, the changes in its net assets, and the financial highlights
for the respective stated periods, in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE
/s/ Deloitte & Touche
---------------------
Denver, Colorado
July 22, 1994

<PAGE>
STATEMENT OF INVESTMENTS June 30, 1994
Centennial California Tax Exempt Trust

<TABLE>
<CAPTION>
FACE MARKET
AMOUNT VALUE -- NOTE 1
---------- ----------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 101.6%
CALIFORNIA -- 101.6%
Anaheim, California Certificates of Participation, 1993 Refunding Projects, AMBAC
Insured, 2.10% (1)................................................................ $1,000,000 $1,000,000
Anaheim, California Electric Revenue Anticipation Nts., 2.70%, 9/1/94 (2)........... 2,000,000 2,000,000
Anaheim, California Housing Authority Multifamily Housing Revenue Refunding Bonds,
Park Vista Apts., Series A, 2.60% (1)............................................. 3,000,000 3,000,000
California Health Facilities Finance Revenue Bonds:
Health Dimensions, Inc., Series A, 2.35%, 8/1/94 (2)................................ 2,000,000 2,000,000
Huntington Memorial Hospital, 2.20% (1)............................................. 700,000 700,000
Kaiser Permanente Medical, Series B, 2.15% (1)...................................... 900,000 900,000
Pooled Loan Program, Series B, FGIC Insured, 2.50% (1).............................. 500,000 500,000
Scripps Memorial Hospital, Series A, MBIA Insured, 2.50% (1)........................ 500,000 500,000
California Pollution Control Finance Authority Revenue Bonds:
Chevron Chemical Co. Project, 2.85%, 11/15/94 (2)................................... 2,275,000 2,275,000
Chevron USA, Inc. Project, 2.85%, 11/15/94 (2)...................................... 500,000 500,000
San Diego Gas and Electric, 2.90%, 9/1/94 (2)....................................... 4,000,000 4,000,000
California State General Obligation Bonds, Series A-3, MBIA Insured, 2.80% (1)...... 2,500,000 2,500,000
Contra Costa County, California Multifamily Housing Revenue Refunding Bonds, Del
Norte Place Apts., Series A, 2.95% (1)............................................ 2,500,000 2,500,000
Costa Mesa, California Certificates of Participation, Orange County Performing Arts
Center, 2.83% (1)................................................................. 2,860,000 2,860,000
Fairfield, California Industrial Development Revenue Bonds, Herman G. Rowland, 2.83%
(1)............................................................................... 1,050,000 1,050,000
First Nationwide Bank of Sacramento, California Multifamily Housing Revenue Bonds,
Grantor Trust, Series 1, Class K, 2.35% (1)....................................... 1,000,000 1,000,000
Huntington Park, California Redevelopment Agency Multifamily Housing Revenue Bonds,
Casa Rita Apts., Series A, 2.70% (1).............................................. 1,500,000 1,500,000
Irvine, California Multifamily Housing Revenue Bonds, Series 1983A, 2.65% (1)....... 1,000,000 1,000,000
Kern, California Community College District Certificates of Participation, Finance
Project, 2.55% (1)................................................................ 1,000,000 1,000,000
Kern County, California Union High School District Certificates of Participation,
Finance Project, 2.50% (1)........................................................ 1,600,000 1,600,000
Los Angeles, California Multifamily Housing Revenue Bonds, Series K, 2.40% (1)...... 2,500,000 2,500,000
Los Angeles County, California Housing Authority Revenue Bonds, Park Sierra Project,
2.80% (1)......................................................................... 1,000,000 1,000,000
Los Angeles County, California Transportation Commission Revenue Bonds, Second Sub.
Sales Tax, 2.75%, 7/11/94 (2)..................................................... 2,000,000 2,000,000

<PAGE>

STATEMENT OF INVESTMENTS (Continued)
Centennial California Tax Exempt Trust

</TABLE>
<TABLE>
<CAPTION>

FACE MARKET
AMOUNT VALUE -- NOTE 1
---------- ----------------
<S> <C> <C>

Municipal Bonds and Notes (Continued)
California (Continued)

Northern California Public Power Agency Revenue Bonds, Geothermal Project No. 3,
Series 84A, 11.50%, 7/1/94 (2).................................................... $3,790,000 $3,903,700
Ontario, California Multifamily Revenue Bonds, Mtg. Residential Park Centre, Series
A, 2.30% (1)...................................................................... 2,400,000 2,400,000
Orange County, California Apt. Development Revenue Refunding Bonds, Series A, 2.45%
(1)............................................................................... 1,000,000 1,000,000
Orange County, California Municipal Water District Refunding Certificates of
Participation, Allen McColloch Project, Series A, 3% (1).......................... 4,000,000 4,000,000
Palm Springs, California Community Redevelopment Agency Certificates of
Participation, Headquarters Hotel, Series 7, 3% (1)............................... 500,000 500,000
San Bernardino County, California Multifamily Housing Authority Revenue Refunding
Bonds, Monterey Villas Apts. Project, Series A, 2.70% (1)......................... 2,125,000 2,125,000
San Diego, California Multifamily Housing Revenue Refunding Bonds, Coral Point Apts.
Project, Series A, 2.70% (1)...................................................... 2,500,000 2,500,000
San Diego County, California Regional Transportation District Revenue Bonds, Series
BT-134, 3%, 7/21/94 (2)........................................................... 2,000,000 2,000,000
San Marcos, California Redevelopment Agency Multifamily Housing Bonds, San Marcos
Retirement Village Project, 3% (1)................................................ 2,500,000 2,500,000
Southern California Rapid Transit District Certificates of Participation, Series
BT-10, MBIA Insured, 2.35% (1).................................................... 1,000,000 1,000,000
Stockton, California Industrial Development Authority Revenue Bonds, Citation
Circuit Co., 2.71% (1)............................................................ 375,000 375,000
Visalia, California Industrial Development Revenue Bonds, Akers West Assoc., 2.75%
(1)............................................................................... 1,150,000 1,150,000
----------------
Total Investments, at Value (Cost $61,338,700)...................................... 101.6% 61,338,700
Liabilities in Excess of Other Assets............................................... (1.6) (963,037)
---------- ----------------
Net Assets.......................................................................... 100.0% $60,375,663
---------- ----------------
---------- ----------------
</TABLE>

1. Floating or variable rate obligation maturing in more than one year. 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, 1994. A demand feature allows the recovery of principal at any time, or
at specified intervals not exceeding one year, on up to 30 days' notice.

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

See accompanying Notes to Financial Statements.

<PAGE>

STATEMENT OF ASSETS AND LIABILITIES June 30, 1994
Centennial California Tax Exempt Trust

<TABLE>

<S> <C>
ASSETS:
Investments, at value (cost $61,338,700) - see
accompanying statement..................................... $61,338,700
Cash 122,159
Receivables:
Interest .................................................. 437,913
Shares of beneficial interest sold ........................ 352,007
Deferred organization costs .................................. 3,881
Other ........................................................ 9,139
----------
Total assets ............................................ 62,263,799
----------
LIABILITIES:
Payables and other liabilities:
Shares of beneficial interest redeemed .................... 1,766,596
Dividends ................................................. 49,707
Service plan fees - Note 3 ................................ 33,359
Other ..................................................... 38,474
----------
Total liabilities ....................................... 1,888,136
----------

NET ASSETS ................................................... $60,375,663
===========

COMPOSITION OF NET ASSETS:
Paid-in capital ............................................. $60,375,604
Accumulated net realized gain from investment
transactions .............................................. 59
----------

NET ASSETS - Applicable to 60,375,604 shares of
beneficial interest outstanding ........................... $60,375,663
===========

NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE
PER SHARE ................................................. $1.00

</TABLE>

See accompanying Notes to Financial Statements.

<PAGE>

STATEMENT OF OPERATIONS For the Year Ended June 30, 1994
Centennial California Tax Exempt Trust

INVESTMENT INCOME - Interest ................................. $1,698,190
----------
EXPENSES:
Management fees - Note 3 ..................................... 327,466
Service plan fees - Note 3 ................................... 131,944
Custodian fees and expenses .................................. 36,500
Transfer and shareholder servicing agent fees
- Note 3 ................................................... 28,354
Shareholder reports .......................................... 17,830
Legal and auditing fees ...................................... 10,096
Registration and filing fees ................................. 2,729
Trustees' fees and expenses .................................. 1,825
Other ........................................................ 15,020
----------
Total expenses ........................................... 571,764
Less assumption of expenses by Centennial Asset
Management Corporation - Note 3 ............................ (48,265)
----------

Net expenses ............................................. 523,499
----------

NET INVESTMENT INCOME ......................................... 1,174,691

NET REALIZED GAIN ON INVESTMENTS .............................. 80
----------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $1,174,771
==========
</TABLE>

See accompanying Notes to Financial Statements.

<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
Centennial California Tax Exempt Trust

<TABLE>

YEAR ENDED JUNE 30,
------------------------
1994 1993
---------- -----------
<S> <C> <C>

OPERATIONS:
Net investment income ................... $ 1,174,691 $ 1,066,789
Net realized gain on investments ........ 80 4,381
----------- -----------
Net increase in net assets resulting
from operations ..................... 1,174,771 1,071,170

DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS .......................... (1,177,627) (1,066,789)

BENEFICIAL INTEREST TRANSACTIONS:
Net increase in net assets resulting
from beneficial interest
transactions - Note 2 ................. 2,299,586 9,591,873
----------- -----------

NET ASSETS:
Total increase .......................... 2,296,730 9,596,254
Beginning of year ....................... 58,078,933 48,482,679
----------- -----------
End of year ............................. $60,375,663 $58,078,933
=========== ===========

</TABLE>

See accompanying Notes to Financial Statements.

<PAGE>

FINANCIAL HIGHLIGHTS
Centennial California Tax Exempt Trust

</TABLE>

1. For the period from June 12, 1990 (commencement of operations) to June 30,
1990.
2. Annualized.

See accompanying Notes to Financial Statements.

<PAGE>

NOTES TO FINANCIAL STATEMENTS
Centennial California Tax Exempt Trust

1. SIGNIFICANT ACCOUNTING POLICIES

Centennial California Tax Exempt Trust (the Trust) is registered
under the Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company. The Trust's
investment advisor is Centennial Asset Management Corporation (the
Manager), a subsidiary of Oppenheimer Management Corporation (OMC). The
following is a summary of significant accounting policies consistently
followed by the Trust.

INVESTMENT VALUATION. Portfolio securities are valued on the basis
of amortized cost, which approximates market value.

FEDERAL INCOME TAXES. The Trust 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 to shareholders.
Therefore, no federal income tax provision is required.

ORGANIZATION COSTS. The Manager advanced $18,743 for organization
and start-up costs of the Trust. Such expenses are being amortized over
a five-year period from the date operations commenced. In the event that
all or part of the Manager's initial investment in shares of the Trust is
withdrawn during the amortization period, the redemption proceeds will be
reduced to reimburse the Trust for any unamortized expenses, in the same
ratio as the number of shares redeemed bears to the number of initial
shares outstanding at the time of such redemption.

DISTRIBUTIONS TO SHAREHOLDERS. The Trust 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, the Trust may
withhold dividends or make distributions of net realized gains.

OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Realized gains and losses
on investments are determined on an identified cost basis, which is the
same basis used for federal income tax purposes.

<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Centennial California Tax Exempt Trust

2. SHARES OF BENEFICIAL INTEREST

The Trust has authorized an unlimited number of no par value shares
of beneficial interest. Transactions in shares of beneficial interest were
as follows:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------
1994 1993
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------

<S> <C> <C> <C> <C>
Sold.......................................... 231,741,608 $ 231,741,608 193,288,887 $ 193,288,887
Dividends and distributions reinvested........ 1,131,972 1,131,972 1,045,494 1,045,494
Redeemed...................................... (230,573,994) (230,573,994) (184,742,508) (184,742,508)
------------ ------------- ------------ -------------
Net increase............................. 2,299,586 $ 2,299,586 9,591,873 $ 9,591,873
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>

3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Trust which provides for an annual
fee of .50% on the first $250 million of net assets with a reduction of
.025% on each $250 million thereafter, to .40% on net assets in excess of
$1 billion. The Manager has agreed to assume Trust expenses (with
specified exceptions) in excess of the regulatory limitation of the State
of California. In addition, the Manager has voluntarily undertaken to
assume Trust expenses in excess of .80% of average annual net assets.

Shareholder Services, Inc. (SSI), a subsidiary of OMC, is the
transfer and shareholder servicing agent for the Trust, and for other
registered investment companies. SSI's total costs of providing such
services are allocated ratably to these companies.

Under an approved service plan, the Trust may expend up to .20% of
its net assets annually to reimburse Centennial Asset Management
Corporation, as distributor, for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the
Trust, including amounts paid to brokers, dealers, banks and other
institutions.

<PAGE>

APPENDIX A

DESCRIPTION OF SECURITIES RATINGS

Below is a description of the two highest rating categories for Short Term
Debt and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on
behalf of the Trust. The ratings descriptions are based on information
supplied by the ratings organizations to subscribers.

Short Term Debt Ratings.

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

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

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

Moody's ratings for state and municipal short-term obligations are
designated "Moody's Investment Grade" ("MIG"). Short-term notes which
have demand features may also be designated as "VMIG". These rating
categories are as follows:

MIG1/VMIG1: Best quality. There is present strong protection by
established cash flows, superior liquidity support or
demonstrated broadbased access to the market for
refinancing.

MIG2/VMIG2: High quality. Margins of protection are ample although
not so large as in the preceding group.

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

A-1: Strong capacity for timely payment. Those issues determined to
possess extremely strong safety characteristics are denoted with
a plus sign (+) designation.
A-2: Satisfactory capacity for timely payment. However, the relative
degree of safety is not as high as for issues designated "A-1".

S&P's ratings for Municipal Notes due in three years or less are:

SP-1: Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.

SP-2: Satisfactory capacity to pay principal and interest.

S&P assigns "dual ratings" to all municipal debt issues that have a demand
or double feature as part of their provisions. The first rating addresses
the likelihood of repayment of principal and interest as due, and the
second rating addresses only the demand feature. With short-term demand
debt, S&P's note rating symbols are used with the commercial paper symbols
(for example, "SP-1+/A-1+").

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Long Term Debt Ratings. These ratings are relevant for securities
purchased by the Trust with a remaining maturity of 397 days or less, or
for rating issuers of short-term obligations.

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

Aaa: Judged to be the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
positions of such issues.

Aa: Judged to be of high quality by all standards. Together with the
"Aaa" group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in "Aaa" securities or
fluctuations of protective elements may be of greater amplitude
or there may be other elements present which make the long-term
risks appear somewhat larger than in "Aaa" securities.

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

Standard & Poor's: Bonds (including municipal bonds) are rated as
follows:

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

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

Fitch:

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

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

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

Duff & Phelps:

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

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

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

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

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

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

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

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

A/B: The company is financially very solid with a favorable track
record and no readily apparent weakness. Its overall risk
profile, while low, is not quite as favorable as for companies in
the highest rating category.
<PAGE>
APPENDIX B
TAX-EQUIVALENT YIELDS

The equivalent yield tables below compare tax-free income with taxable
income under Federal individual income tax rates effective January 1,
1994, and California state individual income tax rates effective January
1, 1993 (California tax brackets are adjusted for inflation sometime
between June 1 and August 1 of the current year). "Combined Taxable
Income" refers to the net amount subject to Federal and California income
taxes after deductions and exemptions. The tables assume that an
investor's highest tax bracket applies to the change in taxable income
resulting from a switch between taxable and non-taxable investments, and
that state tax payments are currently deductible for Federal tax purposes
and that the investor is not subject to Federal or state alternative
minimum tax. The income tax brackets are subject to indexing in future
years to reflect changes in the Consumer Price Index. The brackets do not
reflect the phaseout of itemized deductions and personal exemptions at
higher income levels, resulting in higher effective tax rates (and tax
equivalent yields).

<TABLE>
<CAPTION>
Combined Taxable Income
A Tax-Exempt Yield of:
Joint Return
Effective Tax Bracket1.0%1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
But
Over Not OverFederal Cal. Combined Is Equivalent to a Taxable Yield of:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>

$ 22,118$ 34,90615.00% 4.00% 18.40% 1.23% 1.84% 2.45% 3.06% 3.68% 4.29% 4.90%
$ 34,906$ 38,00015.00% 6.00% 20.10% 1.25% 1.88% 2.50% 3.13% 3.75% 4.38% 5.01%
$ 38,000$ 48,45628.00% 6.00% 32.32% 1.48% 2.22% 2.96% 3.69% 4.43% 5.17% 5.91%
$ 48,456$ 61,24028.00% 8.00% 33.76% 1.51% 2.26% 3.02% 3.77% 4.53% 5.28% 6.04%
$ 61,240$ 91,85028.00% 9.30% 34.70% 1.53% 2.30% 3.06% 3.83% 4.59% 5.36% 6.13%
$ 91,850$140,00031.00% 9.30% 37.42% 1.60% 2.40% 3.20% 3.99% 4.79% 5.59% 6.39%
$140,000$212,38036.00% 9.30% 41.95% 1.72% 2.58% 3.45% 4.31% 5.17% 6.03% 6.89%
$212,380$250,00036.00% 10.00% 42.40% 1.74% 2.60% 3.47% 4.34% 5.21% 6.08% 6.94%
$250,000$424,76039.60% 10.00% 45.64% 1.84% 2.76% 3.68% 4.60% 5.52% 6.44% 7.36%
$424,760-- 39.60% 11.00% 46.24% 1.86% 2.79% 3.72% 4.65% 5.58% 6.51% 7.44%
</TABLE>

<TABLE>
<CAPTION>
Single return:

But
Over Not Over

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 17,453$ 22,75015.00% 6.00% 20.10% 1.25% 1.88% 2.50% 3.13% 3.75% 4.38% 5.01%
$ 22,750$ 24,22828.00% 6.00% 32.32% 1.48% 2.22% 2.96% 3.69% 4.43% 5.17% 5.91%
$ 24,228$ 30,62028.00% 8.00% 33.76% 1.51% 2.26% 3.02% 3.77% 4.53% 5.28% 6.04%
$ 30,620$ 55,10028.00% 9.30% 34.70% 1.53% 2.30% 3.06% 3.83% 4.59% 5.36% 6.13%
$ 55,100$106,19031.00% 9.30% 37.42% 1.60% 2.40% 3.20% 3.99% 4.79% 5.59% 6.39%
$106,190$115,00031.00% 10.00% 37.90% 1.61% 2.42% 3.22% 4.03% 4.83% 5.64% 6.44%
$115,000$212,38036.00% 10.00% 42.40% 1.74% 2.60% 3.47% 4.34% 5.21% 6.08% 6.94%
$212,380$250,00036.00% 11.00% 43.04% 1.76% 2.63% 3.51% 4.39% 5.27% 6.14% 7.02%
$250,000-- 39.60% 11.00% 46.24% 1.86% 2.79% 3.72% 4.65% 5.58% 6.51% 7.44%

<PAGE>

Investment Adviser and Distributor
Centennial Asset Management Corporation
3410 South Galena Street
Denver, Colorado 80231

Transfer And Shareholder Servicing Agent
Shareholder Services, Inc.
P.O. Box 5270
Denver, Colorado 80217-5270
1-800-525-9310

Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043

Independent Auditors
Deloitte & Touche LLP
1560 Broadway
Denver, Colorado 80202

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

</TABLE>