OCC ACCUMULATION TRUST, 497, 1998-05-04

OCC ACCUMULATION TRUST
497, 1998-05-04

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<PAGE>

OCC ACCUMULATION TRUST
One World Financial Center, New York, New York 10281

OCC ACCUMULATION TRUST (formerly known as Quest for Value Accumulation Trust,
the "Fund") is a registered open-end diversified management investment
company offering several investment alternatives. It permits an investor the
flexibility of choosing among different investment objectives, through the
following seven Portfolios (the "Portfolios"), each of which is a separate
series of shares of beneficial interest of the Fund ("Shares"). The
investment objective of each Portfolio is as follows:

EQUITY PORTFOLIO: Long term capital appreciation through investment in a
diversified portfolio of equity securities selected on the basis of a value
oriented approach to investing.

MID CAP PORTFOLIO: Long term capital appreciation through investment in a
diversified portfolio of equity securities.

SMALL CAP PORTFOLIO: Capital appreciation through investment in a
diversified portfolio of equity securities of companies with market
capitalizations of under $1 billion.

GLOBAL EQUITY PORTFOLIO: Long term capital appreciation through a global
investment strategy primarily involving equity securities.

MANAGED PORTFOLIO: Growth of capital over time through investment in a
portfolio consisting of common stocks, bonds and cash equivalents, the
percentages of which will vary based on management's assessments of relative
investment values.

U.S. GOVERNMENT INCOME PORTFOLIO: High current income together with the
protection of capital through investment of securities issued or guaranteed
by the U.S. Government, its agencies and instrumentalities.

MONEY MARKET PORTFOLIO: Maximum current income consistent with stability of
principal and liquidity through investment in a portfolio of high quality
money market instruments. ALTHOUGH THE MONEY MARKET PORTFOLIO SEEKS TO
MAINTAIN ITS SHARE PRICE AT $1.00, AN INVESTMENT IN THE MONEY MARKET
PORTFOLIO IS NOT GUARANTEED OR INSURED BY THE U.S. GOVERNMENT AND THERE IS NO
ASSURANCE THAT THE MONEY MARKET PORTFOLIO WILL MAINTAIN A CONSTANT PRICE OF
$1.00 PER SHARE.

The Fund is an investment vehicle for variable annuity and variable
life insurance contracts of various life insurance companies, and qualified
pension and retirement plans ("Qualified Plans"). Shares of the Fund are
currently sold to variable accounts of various life insurance companies for
the purpose of funding variable annuity and variable life insurance contracts
(the "Contracts"). These variable accounts (the "Variable Accounts") invest
in Shares of the Fund in accordance with allocation instructions received
from owners (the "Contractowners") of the Contracts. Allocation rights are
further described in the accompanying prospectus for the Variable Accounts.
The Variable Accounts will redeem Shares to the extent necessary to provide
benefits under the Contracts. Certain Portfolios may not be available for
investment with respect to certain Contracts offered by certain life
insurance companies. Please check with your insurance company for available
Portfolios.

It is possible, although not presently anticipated, that a material
conflict could arise between and among the various variable accounts which
invest in Shares of the Fund and the Qualified Plans, which may, in the
future invest in Shares of the Fund. Such conflict could cause the
liquidation of assets of one or more of the Fund Portfolios to raise cash at
times not otherwise deemed advantageous by the Fund Manager. See "Management
of the Fund," page 22.

This Prospectus sets forth concisely information about the Fund that a
prospective investor ought to know before investing, must be accompanied by a
current prospectus for the Variable Accounts and both should be retained for
future reference. A Statement of Additional Information dated May 1, 1998 (the
"Additional Statement") has been filed with the Securities and Exchange
Commission and is available without charge upon written request to your broker
or by contacting the Fund at the address listed in this Prospectus. The
Additional Statement (which is incorporated in its entirety by reference in this
Prospectus) contains more detailed information about the Fund and its
management, including more complete information about certain risk factors.

THIS PROSPECTUS SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS FOR THE
VARIABLE ACCOUNTS. THESE PROSPECTUSES SHOULD BE READ CAREFULLY AND RETAINED 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.

OPCAP ADVISORS
Investment Manager
Prospectus dated May 1, 1998

<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary ................................................. 3

Financial Highlights ............................................... 5

Investment Objectives and Policies ................................. 12

Equity Portfolio .............................................. 12

Mid Cap Portfolio ............................................. 12

Small Cap Portfolio ........................................... 13

Global Equity Portfolio ....................................... 14

U.S. Government Income Portfolio .............................. 14

Money Market Portfolio ........................................ 14

Managed Portfolio ............................................. 15

Additional Information on Investment Objectives and Policies ....... 15

Investment Techniques .............................................. 19

Investment Restrictions ............................................ 21

Management of the Fund ............................................. 22

Determination of Net Asset Value ................................... 24

Purchase of Shares ................................................. 24

Redemption of Shares ............................................... 24

State Law Restrictions ............................................. 25

Dividends, Distributions and Taxes ................................. 25

Calculation of Performance ......................................... 26

Additional Information ............................................. 27
</TABLE>

<PAGE>

PROSPECTUS SUMMARY

THE FUND The Fund is a Massachusetts business trust which
issues its shares in series as separate classes of
shares of beneficial interest. There are currently
seven series, each of which is designated as a
"Portfolio". Together, the seven Portfolios are
designed to enable investors to choose a number of
investment alternatives to achieve their financial
goals and to shift assets conveniently among
Portfolios when and if their investment aims or
perception of the marketplace change.

The Fund commenced operations on September 16, 1994
when an investment company then called Quest for
Value Accumulation Trust, with portfolios
corresponding to three of the current seven
portfolios of the Fund, was effectively divided into
two investment funds, the original investment
company, whose name was changed, and the Fund.

INVESTMENT OBJECTIVES
AND RESTRICTIONS The investment objective of each of the Portfolios
is set forth on the cover page of this Prospectus.
These objectives are described in more detail under
the heading "Investment Objectives and Policies."
Although each Portfolio will be actively managed by
experienced professionals, there can be no assurance
that the objectives will be achieved.

The value of the portfolio securities of each
Portfolio and therefore the Portfolio's net asset
value per share (other than the Money Market
Portfolio) are expected to increase or decrease
because of varying factors. There are generally two
types of risk associated with an investment in one
or more of the Portfolios; market (or interest rate)
risk and financial (or credit) risk. Market risk
for equities is the risk associated with movement of
the stock market in general.

Market risk for fixed income securities is the risk
that interest rates will change, thereby affecting
their value. Generally, the value of fixed income
securities declines as interest rates rise, and
conversely, their value rises as interest rates
decline. The second type of risk, financial or
credit risk, is associated with the financial
condition and profitability of an individual equity
or fixed income issuer. The financial risk in
owning equities is related to earnings stability and
overall financial soundness of individual issuers
and of issuers collectively which are part of a
particular industry. For fixed income securities,
credit risk relates to the financial ability of an
issuer to make periodic interest payments and
ultimately repay the principal at maturity. (See
"Additional Information on Investment Objectives and
Policies" for risk aspects of the individual
Portfolios).

INVESTMENT MANAGER OpCap Advisors (the "Manager"), the investment
manager of each of the Portfolios, is investment
manager and sub-adviser to several other registered
investment companies with assets under management of
approximately $18.3 billion at March 31, 1998 and is
a subsidiary of Oppenheimer Capital, a registered
investment adviser, which had assets under
management, including those of OpCap Advisors, of
approximately $67.6 billion at March 31, 1998.

MANAGEMENT FEE The Manager receives a monthly fee from each
Portfolio at varying annual percentage rates of
average daily net assets, as follows: .80 percent
on the first $400 million, .75 percent on the next
$400 million and .70 percent thereafter of the
average daily net assets for the Equity, Mid Cap,
Small Cap, Managed and

<PAGE>

Global Equity Portfolios; .60 percent of average
daily net assets for the U.S. Government Income
Portfolio; and .40 percent of the average daily net
assets for the Money Market Portfolio (see page 22).

PURCHASES AND
REDEMPTION OF SHARES Currently, shares of the Fund are sold at their net
asset value per share, without sales charge, for
allocation to the Variable Accounts as the
underlying investment for the Contracts.
Accordingly, the interest of the Contractowner with
respect to the Fund is subject to the terms of the
Contract as described in the accompanying Prospectus
for the Variable Accounts, which should be reviewed
carefully by a person considering the purchase of a
Contract. That Prospectus describes the
relationship between increases or decreases in the
net asset value of Fund shares and any distributions
on such shares, and the benefits provided under a
Contract. The rights of the Variable Accounts as
shareholders of the Fund should be distinguished
from the rights of a Contractowner which are
described in the Contract. As long as shares of the
Fund are sold for allocation to the Variable
Accounts, the terms "shareholder" or "shareholders"
in this Prospectus shall refer to the Variable
Accounts. Shares are redeemed at their respective
net asset values as next determined after receipt of
proper notice of redemption.

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus, the Additional Statement, and the accompanying
Prospectus for the Variable Accounts.

<PAGE>

OCC ACCUMULATION TRUST

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1997, 1996 and
1995, and for the period from September 16, 1994 through December 31, 1994
for the Money Market, Equity, Managed and Small Cap Portfolios; for the years
ended December 31, 1997 and 1996 and for the period from January 3, 1995
through December 31, 1995 for the U.S. Government Income Portfolio; and for
the years ended December 31, 1997 and 1996 and for the period from March 1,
1995 through December 31, 1995 for the Global Equity Portfolio have been
audited by Price Waterhouse LLP, independent accountants, whose unqualified
report thereon appears in the Additional Statement (Part B). This
information should be read in conjunction with the financial statements and
related notes thereto included in the Additional Statement. Total return
information for the Portfolios of the Fund provided in the Financial
Highlights does not include charges and deductions which are imposed under
the Contracts and described in the Prospectus for the Variable Accounts.
Inclusion of these charges and deductions would reduce the total return of
the Portfolios of the Fund. Further information about the performance of
each Portfolio is available in the Fund's Annual Report or semi-annual
report. Annual reports or semi-annual reports can be obtained without charge
upon written requests to the insurance companies issuing the Contracts.

<PAGE>

OCC ACCUMULATION TRUST
EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
Year ended December 31,
-------------------------- September 16, 1994(1)
1997 1996 1995 to December 31, 1994
----------- ----------- ---------- ---------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period...................................... $30.07 $25.05 $18.12 $18.57
----------- ----------- ---------- ---------------------
Income from investment operations
Net investment income....................... 0.39 0.21 0.31 0.09
Net realized and unrealized gain (loss)
on investments ........................... 7.34 5.52 6.71 (0.54)
----------- ----------- ---------- ---------------------
Total income from investment
operations............................... 7.73 5.73 7.02 (0.45)
----------- ----------- ---------- ---------------------

Dividends and distributions to shareholders
Dividends to shareholders from
net investment income.................... (0.28) (0.24) (0.09) --
Distributions to shareholders from
net realized gains....................... (1.00) (0.47) -- --
----------- ----------- ---------- ---------------------
Total dividends and distributions to
shareholders............................. (1.28) (0.71) (0.09) --
----------- ----------- ---------- ---------------------

Net asset value, end of period.............. $36.52 $30.07 $25.05 $18.12
----------- ----------- ---------- ---------------------
----------- ----------- ---------- ---------------------

Total return(2)............................. 26.6% 23.4% 38.9% (2.4%)
----------- ----------- ---------- ---------------------
----------- ----------- ---------- ---------------------

Net assets, end of period................... $28,819,978 $19,842,998 $9,035,982 $4,281,256
----------- ----------- ---------- ---------------------

Ratio of net operating expenses
to average net assets(5)................ 0.99%(4) 0.93%(6) 0.72%(6) 0.72%(3,6)
----------- ----------- ---------- ---------------------

Ratio of net investment income
to average net assets................... 1.25%(4) 1.29%(6) 1.74%(6) 1.80%(3,6)
----------- ----------- ---------- ---------------------

Portfolio turnover rate..................... 32% 36% 31% 6%
----------- ----------- ---------- ---------------------

Average commission rate..................... $0.0557 $0.0588 -- --
----------- ----------- ---------- ---------------------
</TABLE>

- --------------------------------------------------------------------------------
(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $24,986,972.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 1.05% and 1.15%, respectively, for the
year ended December 31, 1996, 1.26% and 1.20%, respectively, for the year
ended December 31, 1995 and 2.09% and 0.43%, annualized, respectively, for
the period September 16, 1994 (commencement of operations) to December 31,
1994.

<PAGE>

OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
------------------------- March 1, 1995 (1)
1997 1996 December 31, 1995
----------- ----------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period............................ $13.23 $11.61 $10.00
----------- ----------- -----------------
Income from investment operations
Net investment income........................................... 0.06 0.04 0.05
Net realized and unrealized gain
on investments................................................ 1.79 1.70 1.83
----------- ----------- -----------------
Total income from investment operations....................... 1.85 1.74 1.88
----------- ----------- -----------------
Dividends and distributions to shareholders
Dividends to shareholders from net investment income............ (0.04) (0.05) (0.03)
Distributions to shareholders in excess of
net investment income..................................... (0.03) ---- ----
Distributions to shareholders from net realized gains........... (0.69) (0.07) (0.24)
----------- ----------- -----------------
Total dividends and distributions to shareholders.......... (0.76) (0.12) (0.27)
----------- ----------- -----------------

Net asset value, end of period.................................. $14.32 $13.23 $11.61
----------- ----------- -----------------
----------- ----------- -----------------

Total return (2)................................................ 14.0% 15.0% 18.9%
----------- ----------- -----------------
----------- ----------- -----------------

Net assets, end of period....................................... $25,873,628 $16,972,488 $2,891,321
----------- ----------- -----------------

Ratio of net operating expenses to average net assets (5,6)..... 1.19%(4) 1.42% 1.25%(3)
----------- ----------- -----------------

Ratio of net investment income to average net assets (6)........ 0.45%(4) 0.81% 1.02%(3)
----------- ----------- -----------------

Portfolio turnover rate......................................... 53% 40% 67%
----------- ----------- -----------------

Average commission rate......................................... $0.0253 $0.0254 --
----------- ----------- -----------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized ) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $23,063,042.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1H in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses.
If such waivers and assumptions had not been in effect, the ratios of net
operating expenses to average net assets and the ratios of net
investment income (loss) to average net assets would have been 1.20% and
0.44%, respectively, for the year ended December 31, 1997, 1.83% and 0.22%,
respectively, for the year ended December 31, 1996 and 3.94% and (1.67%),
annualized, respectively, for the period March 1, 1995 (commencement of
operations) to December 31, 1995.

7
<PAGE>

OCC ACCUMULATION TRUST
U.S. GOVERNMENT INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
------------------------- January 3, 1995 (1)
1997 1996 December 31, 1995
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period............................ $10.38 $10.62 $10.00
----------- ----------- ------------------
Income from investment operations
Net investment income........................................... 0.57 0.55 0.60
Net realized and unrealized gain (loss)
on investments............................................. 0.14 (0.24) 0.68
----------- ----------- ------------------
Total income from investment operations.................... 0.71 0.31 1.28
----------- ----------- ------------------
Dividends and distributions to shareholders
Dividends to shareholders from net investment income............ (0.57) (0.55) (0.60)
Distributions to shareholders from net realized gains........... (0.01) - (0.06)
----------- ----------- ------------------
Total dividends and distributions to shareholders.......... (0.58) (0.55) (0.66)
----------- ----------- ------------------

Net asset value, end of period.................................. $10.51 $10.38 $10.62
----------- ----------- ------------------
----------- ----------- ------------------

Total return (2)................................................ 7.0% 3.0% 13.1%
----------- ----------- ------------------
----------- ----------- ------------------

Net assets, end of period....................................... $6,983,275 $3,421,998 $1,442,458
----------- ----------- ------------------

Ratio of net operating expenses to average net assets (5,6)..... 0.93%(4) 0.96% 0.75%(3)
----------- ----------- ------------------

Ratio of net investment income to average net assets (6)........ 5.51%(4) 5.27% 5.75%(3)
----------- ----------- ------------------

Portfolio turnover rate......................................... 80% 31% 65%
----------- ----------- ------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Commencements of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $5,959,450.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses.
If such waivers and assumptions had not been in effect, the ratios of net
operating expenses to average net assets and the ratios of net
investment income to average net assets would have been 1.06% and 5.37%,
respectively, for the year ended December 31, 1997, 2.34% and 3.87%,
respectively, for the year ended December 31, 1996 and 4.73% and 1.77%,
annualized, respectively, for the period January 3, 1995 (commencement of
operations) to December 31, 1995.

8
<PAGE>
OCC ACCUMULATION TRUST
MANAGED PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
------------ ------------ ----------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period............. $36.21 $30.14 $20.83 $21.80
------------ ------------ ----------- ----------------------
Income from investment operations
Net investment income............................ 0.34 0.43 0.42 0.14
Net realized and unrealized gain (loss)
on investments................................. 7.45 6.31 9.02 (1.11)
------------ ------------ ----------- ----------------------
Total income from investment operations........ 7.79 6.74 9.44 (0.97)
------------ ------------ ----------- ----------------------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income.......................... (0.40) (0.41) (0.13) -
Distributions to shareholders from
net realized gains............................. (1.22) (0.26) - -
------------ ------------ ----------- ----------------------
Total dividends and
distributions to shareholders.................. (1.62) (0.67) (0.13) -
------------ ------------ ----------- ----------------------

Net asset value, end of period................... $42.38 $36.21 $30.14 $20.83
------------ ------------ ----------- ----------------------
------------ ------------ ----------- ----------------------

Total return (2)................................. 22.3% 22.8% 45.6% (4.4%)
------------ ------------ ----------- ----------------------
------------ ------------ ----------- ----------------------

Net assets, end of period........................ $466,791,224 $180,728,094 $99,188,147 $54,943,371
------------ ------------ ----------- ----------------------

Ratio of net operating expenses
to average net assets (5)..................... 0.87%(4) 0.84%(6) 0.66%(6) 0.66%(3,6)
------------ ------------ ----------- ----------------------

Ratio of net investment income
to average net assets....................... 1.42%(4) 1.66%(6) 1.85%(6) 2.34%(3,6)
------------ ------------ ----------- ----------------------

Portfolio turnover rate.......................... 32% 27% 22% 8%
------------ ------------ ----------- ----------------------

Average commission rate.......................... $0.0571 $0.0592 - -
------------ ------------ ----------- ----------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $290,421,930.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

9
<PAGE>
OCC ACCUMULATION TRUST
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------ September 16, 1994(1)
1997 1996 1995 to December 31, 1994
---------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period................................................ $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- -------------------
Income from investment operations
Net investment income................................. 0.05 0.04 0.05 0.01
Net realized gain (loss) on investments............... (0.00) (0.00) 0.00 --
---------- ---------- ---------- -------------------
Total income from investment operations........ 0.05 0.04 0.05 0.01
---------- ---------- ---------- -------------------

Dividends and distributions to shareholders
Dividends to shareholders from
net investment income............................. (0.05) (0.04) (0.05) (0.01)
Distributions to shareholders from net realized
gains............................................. -- (0.00) -- --
---------- ---------- ---------- -------------------
Total dividends and distributions to
shareholders............................... (0.05) (0.04) (0.05) (0.01)
---------- ---------- ---------- -------------------

Net asset value, end of period........................ $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- -------------------
---------- ---------- ---------- -------------------

Total return (2) .................................... 4.7% 4.5% 5.1% 1.2%
---------- ---------- ---------- -------------------
---------- ---------- ---------- -------------------

Net assets, end of period............................. $2,166,067 $5,279,042 $4,356,084 $3,519,526
---------- ---------- ---------- -------------------

Ratio of net operating expenses to average net
assets (5,6)........................................ 0.98% (4) 1.01% 1.00% 1.00% (3)
---------- ---------- ---------- -------------------

Ratio of net investment income to average net
assets (6).......................................... 4.57% (4) 4.43% 4.94% 4.13% (3)
---------- ---------- ---------- -------------------

- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $4,375,569.

(5) For fiscal periods ending after September 1, 1995, the ratios are calculated
to include expenses offset by earnings credits from a custodian bank
(See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 1.06% and 4.50%, respectively, for the
year ended December 31, 1997, 1.30% and 4.13%, respectively, for the year
ended December 31, 1996, 1.14% and 4.80%, respectively, for the year ended
December 31, 1995 and 2.03% and 3.10%, annualized, respectively, for the
period September 16, 1994 (commencement of operations) to December 31,
1994.

10
<PAGE>

OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------- September 16, 1994(1)
1997 1996 1995 to December 31, 1994
------------ ----------- ----------- ---------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................ $22.61 $19.91 $17.38 $17.49
------------ ----------- ----------- ---------------------
Income from investment operations
Net investment income............................... 0.08 0.14 0.26 0.06
Net realized and unrealized gain (loss)
on investments.................................... 4.73 3.45 2.37 (0.17)
------------ ----------- ----------- ---------------------
Total income from investment operations........... 4.81 3.59 2.63 (0.11)
------------ ----------- ----------- ---------------------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income............................. (0.13) (0.25) (0.05) --
------------ ----------- ----------- ---------------------
Distributions to shareholders from
net realized gains................................ (0.92) (0.64) (0.05) --
------------ ----------- ----------- ---------------------
Total dividends and distributions to shareholders. (1.05) (0.89) (0.10) --
------------ ----------- ----------- ---------------------
Net asset value, end of period...................... $26.37 $22.61 $19.91 $17.38
------------ ----------- ----------- ---------------------
------------ ----------- ----------- ---------------------

Total return (2).................................... 22.2% 18.7% 15.2% (0.6%)
------------ ----------- ----------- ---------------------
------------ ----------- ----------- ---------------------

Net assets, end of period........................... $110,564,506 $34,256,671 $16,004,392 $9,210,443
------------ ----------- ----------- ---------------------

Ratio of net operating expenses to average net
assets (5)........................................ 0.97% (4) 0.93% (6) 0.74% (6) 0.74% (3,6)
------------ ----------- ----------- ---------------------

Ratio of net investment income
to average net assets............................ 0.64% (4) 1.03% (6) 1.75% (6) 1.22% (3,6)
------------ ----------- ----------- ---------------------

Portfolio turnover rate............................. 68% 50% 69% 32%
------------ ----------- ----------- ---------------------

Average commission rate............................. $0.0549 $0.0493 -- --
------------ ----------- ----------- ---------------------

- ----------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $62,297,759.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 1.01% and 0.92%, respectively, for the
year ended December 31, 1996, 0.99% and 1.50%, respectively, for the year
ended December 31, 1995 and 1.64% and 0.32%, annualized, respectively, for
the period September 16, 1994 (commencement of operations) to December 31,
1994.

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each Portfolio of the Fund are
described below. Investment objectives of each Portfolio are fundamental
policies which cannot be changed for any Portfolio without a majority vote of
the shareholders of that Portfolio; investment policies are not fundamental
and may be adjusted by the Manager at any time, usually in response to its
perception of developments in the securities markets. The extent to which a
Portfolio will be able to achieve its distinct investment objectives depends
upon the Manager's ability to evaluate and develop the information it
receives into a successful investment program. Although each Portfolio will
be managed by experienced professionals, there can be no assurance that any
Portfolio will achieve its investment objectives. For Portfolios other than
the Money Market Portfolio, the values of the securities held in each
Portfolio will fluctuate and the net asset value per share at the time shares
are redeemed may be more or less than the net asset value per share at the
time of purchase. Investors should also refer to "Investment Techniques" for
additional information concerning the investment techniques employed for some
or all of the Portfolios.

INVESTMENT OBJECTIVES OF THE FUND PORTFOLIOS

Equity Portfolio

The investment objective of the Equity Portfolio is long term capital
appreciation through investment in securities (primarily equity securities) of
companies that are believed by the Manager to be undervalued in the marketplace
in relation to factors such as the companies' assets or earnings. It is the
Manager's intention to invest in securities of companies which in the Manager's
opinion possess one or more of the following characteristics: undervalued
assets, valuable consumer or commercial franchises, securities valuation below
peer companies, substantial and growing cash flow and/or a favorable price to
book value relationship. Investment policies aimed at achieving the Portfolio's
objective are set in a flexible framework of securities selection which
primarily includes equity securities, such as common stocks, preferred stocks,
convertible securities, rights and warrants in proportions which vary from time
to time. Under normal circumstances at least 65 percent of the Portfolio's
assets will be invested in equity securities. The Portfolio will invest
primarily in stocks listed on the New York Stock Exchange. In addition, it may
also purchase securities listed on other domestic securities exchanges,
securities traded in the domestic over-the-counter market and foreign securities
provided that they are listed on a domestic or foreign securities exchange or
represented by American depository receipts listed on a domestic securities
exchange or traded in domestic or foreign over-the-counter markets. Investments
of the Equity Portfolio are managed by Eileen Rominger, Managing Director of
Oppenheimer Capital. Ms. Rominger has been an analyst and portfolio manager at
Oppenheimer Capital since 1981. She graduated from Fairfield University with a
BA Cum Laude and earned an MBA in Finance from the Wharton Graduate School of
Business.

Mid Cap Portfolio

The investment objective of the Mid Cap Portfolio is long-term
capital appreciation. The portfolio seeks to achieve its objective through
investments primarily in equity securities of companies with market
capitalizations between $500 million and $5 billion which are believed to be
undervalued in the marketplace in relation to factors such as the company's
discretionary cash flow generation, earnings or assets. It is the Manager's
intention to invest in securities of companies which in the Manager's opinion
possess one or more of the following characteristics: undervalued assets,
valuable consumer or commercial franchises, strong shareholder-value oriented
management, and/or substantial and growing discretionary cash flow, and a
favorable price-to-intrinsic value relationship. Mid-cap companies may, in
some cases, enjoy some distinct business advantages by virtue of their size
and yet be undervalued in the market, in the following respects: (i) such
companies are generally studied by fewer stock analysts than large companies,
resulting in periodic valuation discrepancies; (ii) institutional investors,
which currently represent a majority of trading volume in shares of
publicly-traded companies, often must invest large pools of money and are
reluctant to own the resultant disproportionately large percentages of a
mid-cap company's securities; (iii) such companies may have available a
broader array of opportunities for value creation due to their relatively
smaller size. These opportunities could include: regional or product line
expansion, consolidating acquisitions of a related business, joint ventures,
divestiture of business units, or sale of the entire company; and (iv) such
companies may retain qualities that have been lost or diminished at their
larger

<PAGE>

counterparts including focus, a sharp sense of management accountability and
speedy response to competitive developments. Mid-cap companies also may
enjoy advantages over smaller companies, such as the stability of a longer
operating record, the critical mass to exploit international opportunities
and a more professional management. Investment policies aimed to achieve the
Portfolio's objective are set in a flexible framework of securities selection
which primarily includes equity and equity derivative securities, such as
common stocks, preferred stock, convertible securities, rights, warrants,
options and puts in proportions which vary from time to time. Under normal
circumstances at least 65 percent of the Portfolio's assets will be invested
in equity securities. The majority of securities purchased by the Portfolio
will be traded on the New York Stock Exchange, the American Stock Exchange or
in the over-the-counter market. In addition, the Portfolio may also purchase
foreign securities provided that they are listed on a domestic or foreign
securities exchange or traded in domestic or foreign over-the-counter
markets. The Portfolio may also purchase securities in initial public
offerings, or shortly after such offerings have been completed, when the
Manager believes those securities have greater-than-average market
appreciation potential. Investments in the Mid Cap Portfolio are managed by
Eileen Rominger - Managing Director of Oppenheimer Capital, Alan Gutmann -
Senior Vice President of Oppenheimer Capital, and Louis Goldstein - Senior
Vice President of Oppenheimer Capital. Mr. Gutmann joined Oppenheimer
Capital in 1991 after working in the merger and acquisition department of
Salomon Brothers, Inc. and Oppenheimer & Co., Inc. He graduated from the
Wharton School, Magna Cum Laude and earned an MA with honors from the Heiden
Institute in Jerusalem. Mr. Goldstein joined Oppenheimer Capital in 1991 and
formerly had been an analyst for David J. Greene & Co., Atalanta/Sosnoff
Capital and a corporate finance banking associate at the Blackstone Group.
He earned a BS, Summa Cum Laude and an MBA in Finance with honors from the
Wharton School of Business.

Small Cap Portfolio

The investment objective of the Small Cap Portfolio is to seek capital
appreciation through investments in a diversified portfolio consisting
primarily of equity securities of companies with market capitalizations of
under $1 billion. Smaller-capitalization companies are often under-priced
for the following reasons: (i) institutional investors, which currently
represent a majority of the trading volume in the shares of publicly-traded
companies, are often less interested in such companies because in order to
acquire an equity position that is large enough to be meaningful to an
institutional investor, such an investor may be required to buy a large
percentage of the company's outstanding equity securities and (ii) such
companies may not be regularly researched by stock analysts, thereby
resulting in greater discrepancies in valuation. The Portfolio may also
purchase securities in initial public offerings, or shortly after such
offerings have been completed, when the Manager believes that such securities
have greater-than-average market appreciation potential. Under normal
circumstances at least 65 percent of the Portfolio's assets will be invested
in equity securities. The majority of securities purchased by the Portfolio
will be traded on the New York Stock Exchange (the "NYSE"), the American
Stock Exchange or in the over-the-counter market, and will also include
options, warrants, bonds, notes and debentures which are convertible into or
exchangeable for, or which grant a right to purchase or sell, such
securities. In addition, the Portfolio may also purchase foreign securities
provided that they are listed on a domestic or foreign securities exchange or
are represented by American depository receipts listed on a domestic
securities exchange or traded in domestic or foreign over-the-counter
markets. The Small Cap Portfolio is managed by Timothy McCormack, Senior
Vice President of Oppenheimer Capital and Timothy Curro and Gavin Albert,
both of whom are Vice Presidents of Oppenheimer Capital. Mr. McCormack became
a portfolio manager of the Portfolio in May 1996. He joined Oppenheimer
Capital in 1994. From March 1993 to July 1994 Mr. McCormack was a security
analyst at U.S. Trust Company and prior to that he was a securities analyst
with Gabelli and Company. He has a Masters of Business Administration degree
from the Wharton School. Timothy Curro and Gavin Albert became portfolio
managers of the Portfolio on January 1, 1997. Mr. Curro has been a Vice
President of Oppenheimer Capital since November 1996. Prior thereto, he was
a general partner of Value Holdings, L.P., an investment partnership, from
May 1995 to November 1996, a Vice President in the equity research department
at UBS Securities Inc. from June 1994 through May 1995 and from January 1991
through February 1993 and was a partner with Omega Advisors, Inc. from March
1993 to March 1994. He has a Masters of Business Administration degree from
the University of California, Berkeley. Mr. Albert, Vice President of
Oppenheimer Capital since December 1996, joined the firm in September 1994 as
a research analyst. Prior thereto he was a management consultant for EDS
Energy Management in 1994, attended the Vanderbilt University Business School
from September 1992 to May 1994

<PAGE>

(with a Masters of Business Administration degree in finance and management)
and was a financial analyst in the Corporate Finance department of Texaco,
Inc. from 1990 to 1992.

Global Equity Portfolio

The investment objective of the Global Equity Portfolio is to seek long
term capital appreciation through pursuit of a global investment strategy
primarily involving equity securities. The Portfolio may invest anywhere in
the world with no requirement that any specific percentage of its assets be
committed to any given country. Under normal circumstances, at least 65
percent of the Portfolio's total assets will be invested in equity securities
in at least three different countries, one of which may be the United States.
Opportunities for capital appreciation may also be presented by debt
securities. The Portfolio may invest up to 35 percent of its total assets in
debt obligations with remaining maturities of one year or more of U.S. or
foreign corporate, governmental or bank issuers. It is the present intention
of the Portfolio, although not a fundamental policy, not to invest more than
5 percent of its total assets in debt securities rated below
investment-grade. Although there is no minimum rating for this category of
debt investments of the Portfolio, the Portfolio does not intend to invest in
bonds which are in default. Domestic investments of this Portfolio are
managed by Richard J. Glasebrook II, Managing Director of Oppenheimer
Capital. He joined Oppenheimer Capital in 1991. From 1983 to 1991, he was a
partner with Delafield Asset Management and from 1974 to 1970 he was a
portfolio manager and analyst with Morgan Guaranty Trust Co. Mr. Glasebrook
graduated with a BA from Kenyon College and received an MBA from the Harvard
Graduate School of Business Administration. The Portfolio's investments in
foreign securities are managed by Pierre Daviron, President and Chief
Investment Officer of Oppenheimer Capital International, a division of
Oppenheimer Capital created in 1993 and Managing Director of Oppenheimer
Capital. Previously, he was Chairman and Chief Executive Officer at Indosuez
Gartmore Asset Management, a division of Banque Indosuez, Paris, France.
Prior thereto he was a Managing Director in Mergers and Acquisitions at J.P.
Morgan. Mr. Daviron is a graduate of Hautes Etudes Commerciales in Paris.

U.S. GOVERNMENT INCOME PORTFOLIO

The investment objective of the U.S. Government Income Portfolio is to seek
a high level of current income together with protection of capital by investing
exclusively in debt obligations, including mortgage-backed securities, issued or
guaranteed by the United States government, its agencies or instrumentalities
("U.S. government securities"). Among the securities the Portfolio may purchase
are mortgage-backed securities guaranteed by the Government National Mortgage
Association ("Ginnie Mae"), the Federal Home Loan National Mortgage Corporation
("Freddie Mac") and the Federal National Mortgage Association ("Fannie Mae").
The Portfolio normally intends to maintain at least 65 percent of its assets in
U.S. Government Securities. The average maturity of the Portfolio's investments
will vary based on market conditions. It is estimated that the average dollar
weighted maturity of the Portfolio will be between three and ten years. The
U.S. Government Income Portfolio is managed by Vikki Hanges, Senior Vice
President of Oppenheimer Capital. She joined Oppenheimer Capital in 1982. Ms.
Hanges earned her BS from Cornell University.

Money Market Portfolio

The investment objective of the Money Market Portfolio is to seek
maximum current income consistent with stability of principal and liquidity.
The Portfolio may invest only in money market instruments and corporate
obligations denominated in U.S. dollars which have a maturity at the time of
investment of one year or less within the meaning of the Investment Company
Act of 1940 (the "Act") and repurchase and reverse repurchase agreements
which extend for no more than seven days. The Portfolio does not presently
intend to enter into reverse repurchase agreements. Money market instruments
include U.S. government securities, short-term bank obligations such as
certificates of deposit, bankers' acceptances and letters of credit and
corporate commercial paper. All investments will be of high quality as
determined by one or more nationally-recognized statistical rating
organizations or, in the case of non-rated securities, of comparable quality
in accordance with standards and procedures established by the Board of
Trustees. It is expected that all or almost all of the Portfolio's income
will

<PAGE>

come from interest and that little or no income will be the result of
capital gains. (See "Additional Information on Investment Objectives and
Policies" for a more complete description of the specific securities.)

Managed Portfolio

The investment objective of the Managed Portfolio is to achieve growth
of capital over time through investment in a portfolio consisting of common
stocks, bonds and cash equivalents, the percentages of which will vary based
on the Manager's assessments of the relative outlook for such investments.
In seeking to achieve its investment objective, the types of equity
securities in which the Portfolio may invest are likely to be the same as
those in which the Equity Portfolio invests, although securities of the type
in which the Small Cap Portfolio invests may, to a lesser extent, be
included. Debt securities are expected to be predominantly investment grade
intermediate to long term U.S. Government and corporate debt, although the
Portfolio will also invest in high quality short term money market and cash
equivalent securities and may invest almost all of its assets in such
securities when the Manager deems it advisable in order to preserve capital.
In addition, the Portfolio may also purchase foreign securities provided that
they are listed on a domestic or foreign securities exchange or are
represented by American depository receipts listed on a domestic securities
exchange or traded in domestic or foreign over-the-counter markets.

The allocation of the Portfolio's assets among the different types of
permitted investments will vary from time to time based upon the Manager's
evaluation of economic and market trends and its perception of the relative
values available from such types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Portfolio's assets that
may, at any given time, be invested in any of the types of investments
identified above. Consequently, while the Portfolio will earn income to the
extent it is invested in bonds or cash equivalents, the Portfolio does not
have any specific income objective. Although there is neither a minimum nor
maximum percentage of the Portfolio's assets that may, at any given time, be
invested in any of the types of investments identified above, it is
anticipated that most of the time the majority of the Portfolio's assets will
be invested in common stocks. The investments of the Managed Portfolio are
managed by Richard J. Glasebrook II, Managing Director of Oppenheimer
Capital.

ADDITIONAL INFORMATION ON INVESTMENT OBJECTIVES AND POLICIES

For the Equity, the Mid Cap, the Small Cap and the Global Equity
Portfolios, at times when the investment climate is viewed as favorable,
common stocks will be heavily emphasized. Under normal circumstances, at
least 65 percent of each Portfolio's assets will be invested in common stocks
or securities convertible into common stocks.

Under normal conditions, no less than 65 percent of the assets of the
U.S. Government Income Portfolio will be invested in the debt securities
identified under "U.S. Government Income Portfolio."

In the event that future economic or financial conditions adversely
affect equity securities, or stocks are considered overvalued, each of the
Equity, Mid Cap, Small Cap and Global Equity Portfolios may invest a
substantial portion of its assets in debt securities, with an emphasis on
money market instruments or cash and cash equivalents. The U.S. Government
Income Portfolio may increase the proportion of its assets which are invested
in money market instruments or cash in the event that the Manager deems such
investments advisable to preserve capital.

Each Portfolio (other than the Money Market Portfolio) will in the
normal course have varying amounts of cash assets which have not yet been
invested in accordance with its objectives. This cash will be temporarily
invested in high quality short term money market securities and cash
equivalents.

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<PAGE>

Regulations under Section 817(h) of the Internal Revenue Code ("IRC
817(h)") require each Portfolio to diversify its investments. To comply with
these regulations each Portfolio is required to diversify its investments so
that on the last day of each quarter of a calendar year no more than 55
percent of the value of its total assets is represented by any one
investment, no more than 70 percent is represented by any two investments, no
more than 80 percent is represented by any three investments, and no more
than 90 percent is represented by any four investments. For this purpose,
securities of a given issuer generally are treated as one investment, but
each U.S. Government agency and instrumentality is treated as a separate and
distinct issuer. As such, any security issued, guaranteed, or insured (to
the extent so guaranteed or insured) by the U.S. or an agency or
instrumentality of the U.S. is treated as a security issued by the U.S.
Government or its agency or instrumentality, whichever is applicable. These
diversification rules limit the amount that any Portfolio, and in particular
the U.S. Government Income Portfolio can invest in any single issuer,
including direct obligations of the U.S. Treasury, to 55 percent of the
Portfolio's total assets at the end of any calendar quarter.

SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO INVESTS

(1) Securities issued or guaranteed by the U.S. Government.

(2) Obligations issued or guaranteed by agencies or instrumentalities of
the U.S. Government. Some of such obligations may be supported by the
full faith and credit of the U.S. Treasury while others may be
supported only by the credit of the particular Federal agency or
instrumentality issuing the obligation.

(3) Certificates of deposit, bankers' acceptances and letters of credit of
prime quality of U.S. banks and savings and loan associations and
their foreign branches (Eurodollars), foreign banks, and U.S. branches
of foreign banks (Yankees) having total assets in excess of $500
million.

(4) Certificates of deposit of prime quality fully insured as to principal
by the Federal Deposit Insurance Corp.

(5) Commercial paper of prime quality.

(6) Corporate notes, bonds and debentures that have a remaining maturity
of 365 calendar days or less if a class of short term debt comparable
with the security issued by the same issuer is of prime quality.

(7) Repurchase agreements involving securities listed above, which are
described on page 19 of this Prospectus.

The Portfolio operates under Rule 2a-7 adopted under the Act (the
"Rule") which, if certain conditions are met, allows the Portfolio to use the
amortized cost method of valuing its portfolio securities to determine its
net asset value per share. As long as the Portfolio continues to use the
Rule, it must abide by certain conditions. Some of those conditions relate
to portfolio management: (i) it must maintain a dollar-weighted average
portfolio maturity not in excess of 90 days; (ii) it must limit its
investments, including repurchase agreements, to those instruments which are
denominated in U.S. dollars, and which are of "prime quality" as determined
by any major rating service or in the case of any instrument that is not
rated, of comparable quality as determined by the Board of Trustees in
accordance with procedures adopted pursuant to the Rule; and (iii) it may not
purchase any instruments with a remaining maturity of more than thirteen
months within the meaning of the Act. For the purposes of this prospectus,
prime quality shall mean the security (or the issuer for a comparable
security) is rated in one of the two highest rating categories for short-term
debt obligations by any two of Moody's Investors Service, Inc. ("Moodys"),
Standard & Poor's Corporation ("S&P"), Fitch Investors Service, Inc.
("Fitch"), Duff & Phelps, Inc. ("Duff & Phelps") or Thomson's BankWatch,
Inc., or by one of such rating agencies if only one rating agency has issued
a rating with respect to the security, or, if not rated, judged by the
Manager pursuant to criteria adopted by the Fund's Board of Trustees to be of
comparable quality. See the Appendix for a description of ratings. In
addition, the Rule requires that investments by the Money Market Portfolio
which do not satisfy one of the following requirements are limited in the
aggregate to 5 percent of the Portfolio's assets in regard to issues and 1

16
<PAGE>

percent of assets (or $1 million if greater) in regard to any one issuer of
such issues: (i) issues rated in the highest category (or the issuer is so
rated for a comparable security) by at least two of such rating agencies; or
(ii) if rated by only one agency, rated in the highest category; or (iii) if
unrated determined by the Board of Trustees to be of quality comparable to
issues which qualify under (i) or (ii). For further information, see
"Determination of Net Asset Value" in the Additional Statement.

MANAGEMENT OF ASSETS

The Manager intends to manage each Portfolio's assets by buying and
selling securities to help attain its investment objective. This may result
in increases or decreases in a Portfolio's current income available for
distribution to its shareholders. While none of the Portfolios is managed
with the intent of generating short-term capital gains, each of the
Portfolios may dispose of investments (including money market instruments)
regardless of the holding period if, in the opinion of the Manager, an
issuer's creditworthiness or perceived changes in a company's growth
prospects or asset value make selling them advisable. Such an investment
decision may result in capital gains or losses and could result in a high
portfolio turnover rate during a given period, resulting in increased
transaction costs related to equity securities. Disposing of debt securities
in these circumstances should not increase direct transaction costs since
debt securities are normally traded on a principal basis without brokerage
commissions. However, such transactions do involve a mark-up or mark-down of
the price.

During periods of unusual market conditions when the Manager believes
that investing for defensive purposes is appropriate, or in order to meet
anticipated redemption requests, part or all of the assets of one or more of
the Portfolios may be invested in cash or cash equivalents including
obligations listed above.

The "Financial Highlights" table shows the Portfolios' portfolio
turnover rates. The portfolio turnover rates of the Portfolios cannot be
accurately predicted. Nevertheless, it is anticipated that the Equity, Mid
Cap, Small Cap, U.S. Government Income, Managed and Global Equity Portfolios
will have an annual turnover rate (excluding turnover of securities having a
maturity of one year or less) of less than 100%. A 100 percent annual
turnover rate would occur, for example, if all the securities in a
Portfolio's investment portfolio were replaced once in a period of one year.
Because the Money Market Portfolio will consist of securities with a maturity
of one year or less, the turnover rate as defined is not meaningful. Because
of the short-term nature of its investments, it is anticipated that the
number of purchases and sales or maturities of such securities will be
substantial.

RISK ASPECTS OF THE INDIVIDUAL PORTFOLIOS

MONEY MARKET PORTFOLIO. The Money Market Portfolio conforms to
requirements which permit it to maintain a constant net asset value of $1.00
per share through use of the amortized cost method of valuation. The Money
Market Portfolio may invest in U.S. dollar denominated securities of foreign
branches of U.S. banks and U.S. branches of foreign banks. These investments
involve risks that are different from investments in securities of U.S.
banks. While there is no risk from exchange rate fluctuations, there may be
risk of future unfavorable political and economic developments, possible
withholding taxes, seizure of foreign deposits, currency controls, interest
limitations or other governmental restrictions which might affect payment of
principal or interest. Additionally, there may be less public information
available about foreign banks and their branches.

MANAGED AND U.S. GOVERNMENT INCOME PORTFOLIOS. An investment in the
Managed Portfolio will entail both market and financial risk, the extent of
which depends on the amount of the Portfolio's assets which are committed to
equity, longer term debt or money market securities at any particular time.
The U.S. Government Income Portfolio is expected to have greater interest
rate risk due to the Portfolio's primary investments in mortgage-backed
securities. As the Managed Portfolio may and the U.S. Government Income
Portfolio will invest in mortgage-backed securities, such securities, while
similar to other fixed-income securities, involve the additional risk of
prepayment because mortgage prepayments are passed through to the holder of
the mortgage-backed security and must be reinvested. Prepayments of mortgage
principal reduce the stream of future payments and generate cash which must
be reinvested. When interest rates fall, prepayments tend to rise. As such
these Portfolios may have to reinvest that portion of their respective assets
invested in such securities more frequently when interest rates are low than
when interest rates are high.

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<PAGE>

MID CAP PORTFOLIO. The Mid Cap Portfolio is expected to have greater
risk exposure and reward potential than a portfolio which invests primarily
in larger-capitalization companies. The trading volumes of securities of
mid-capitalization companies are normally less than those of
larger-capitalization companies. This often translates into greater price
swings. The waiting period for the achievement of an investor's objectives
might be longer since these securities are not as closely monitored by
research analysts. Thus, it takes more time for investors to become aware of
fundamental changes or other factors which have motivated the Portfolio's
purchase. However, mid-capitalization companies often achieve higher growth
rates and may experience higher failure rates than do large-capitalization
companies.

SMALL CAP PORTFOLIO. The Small Cap Portfolio is expected to have
greater risk exposure and reward potential than a portfolio which invests
primarily in larger-capitalization companies. The trading volumes of
securities of smaller-capitalization companies are normally less than those
of larger-capitalization companies. This often translates into greater price
swings, both upward and downward. The waiting period for the achievement of
an investor's objectives might be longer since these securities are not
closely monitored by research analysts and, thus, it takes more time for
investors to become aware of fundamental changes or other factors which have
motivated the Portfolio's purchase. Smaller-capitalization companies often
achieve higher growth rates and experience higher failure rates than do
larger-capitalization companies.

ADDITIONAL RISKS OF FOREIGN SECURITIES: The Global Equity, Equity, Mid
Cap, Small Cap and Managed Portfolios may purchase foreign securities that
are listed on a domestic or foreign securities exchange, traded in domestic
or foreign over-the counter markets or represented by American Depository
Receipts. There is no limit to the amount of such foreign securities the
Portfolios may acquire. It will be the general practice of the Global Equity
Portfolio to invest in foreign equity securities. Certain factors and risks
are presented by investment in foreign securities which are in addition to
the usual risks inherent in domestic securities. Foreign companies are not
necessarily subject to uniform accounting, auditing and financial reporting
standards or other regulatory requirements comparable to those applicable to
U.S. companies. Thus, there may be less available information concerning
non-U.S. issuers of securities held by a Portfolio than is available
concerning U.S. companies. In addition, with respect to some foreign
countries, there is the possibility of nationalization, expropriation or
confiscatory taxation; income earned in the foreign nation being subject to
taxation, including withholding taxes on interest and dividends, or other
taxes imposed with respect to investments in the foreign nation; limitations
on the removal of securities, property or other assets of a fund;
difficulties in pursuing legal remedies and obtaining judgments in foreign
courts, or political or social instability or diplomatic developments which
could affect U.S. investments in those countries. For a description of the
risks of possible losses through holding of securities in foreign custodian
banks and depositories, see "Investment of Assets" in the Additional
Statement.

Securities of many non-U.S. companies may be less liquid and their
prices more volatile than securities of comparable U.S. companies. Non-U.S.
stock exchanges and brokers are generally subject to less governmental
supervision and regulation than in the U.S. and commissions on foreign stock
exchanges are generally higher than negotiated commissions on U.S.
transactions. In addition, there may in certain instances be delays in the
settlement of non-U.S. stock exchange transactions. Certain countries
restrict foreign investments in their securities markets. These restrictions
may limit or preclude investment in certain countries, industries or market
sectors, or may increase the cost of investing in securities of particular
companies. Purchasing the shares of investment companies which invest in
securities of a given country may be the only or the most efficient way to
invest in that country. This may require the payment of a premium above the
net asset value of such investment companies and the return will be reduced
by the operating expenses of those investment companies.

A decline in the value of the U.S. dollar against the value of any
particular currency will cause an increase in the U.S. dollar value of a
Portfolio's holdings denominated in such currency. Conversely, a decline in
the value of any particular currency against the U.S. dollar will cause a
decline in the U.S. dollar value of the Portfolio's holdings of securities
denominated in such currency. Some foreign currency values may be volatile
and there is the possibility of governmental controls on currency exchange or
governmental intervention in currency markets which could adversely affect a
Portfolio. The Portfolios do not intend to speculate in foreign currency in
connection with the purchase or sale of securities on a foreign securities
exchange but may enter into foreign currency contracts to hedge their foreign
currency exposure. While those transactions may minimize the impact of
currency appreciation and depreciation, the Portfolios will bear a cost for
entering into the transaction and such

18
<PAGE>

transactions do not protect against a decline in the security's value
relative to other securities denominated in that currency.

It is expected that the Global Equity Portfolio will invest in American
Depository Receipts ("ADRs"),European Depository Receipts ("EDRs"), or Global
Depository Receipts ("GDRs") which are sponsored by persons other than the
underlying issuers. ADRs are U.S. dollar-denominated securities designed for
use in the U.S. securities markets. They represent and may be converted into
the underlying foreign security. EDRs are designed for use in the European
securities market. Issuers of the stock of such unsponsored ADRs are not
obligated to disclose material information in the United States and,
therefore, there may not be a correlation between such information and the
market value of such ADRs.

EMERGING MARKET COUNTRIES: Certain developing countries may have relatively
unstable governments, economies based on only a few industries that are
dependent upon international trade and reduced secondary market liquidity.
Foreign investment in certain emerging market countries is restricted or
controlled in varying degrees. In the past, securities in these countries
have experienced greater price movement, both positive and negative, than
securities of companies located in developed countries. Lower-rated
high-yielding emerging market securities may be considered to have
speculative elements.

HIGH YIELD SECURITIES: It is the present intention of the Manager with
respect to each of the Equity, Mid Cap, Small Cap, Global Equity and Managed
Portfolios to invest no more than 5 percent of its net assets in bonds rated
below Baa3 by Moody's or BBB- by S&P (commonly known as "junk bonds"). In
the event that the Manager intends in the future to invest more than 5
percent of the net assets of any such Portfolio in junk bonds, appropriate
disclosures will be made to existing and prospective shareholders. For
information about the possible risks of investing in junk bonds see
"Investment of Assets" in the Additional Statement.

OPTIONS AND FUTURES: To the extent permitted by applicable state law,
the Global Equity, Mid Cap, Small Cap and Equity Portfolios may engage in
futures contracts and options on futures contracts for bona fide hedging or
other non-speculative purposes. The Global Equity and Small Cap Portfolios
may also engage in options on stock indices. The Mid Cap, Small Cap and
Equity Portfolios may write covered call options on individual securities and
the Mid Cap Portfolio may write uncovered calls and puts. These Portfolios
will not enter into any leveraged futures transactions. Different uses of
futures and options have different risk and return characteristics.
Generally, selling futures contracts, purchasing put options and writing call
options are strategies designed to protect against falling security prices
and can limit potential gains if prices rise. Purchasing futures contracts,
purchasing call options and writing put options are strategies whose returns
tend to rise and fall together with securities prices and can cause losses if
prices fall. If securities prices remain unchanged over time, option writing
strategies tend to be profitable while option buying strategies tend to be
unprofitable. For more information about Options and Futures see "Investment
Techniques" in this Prospectus and "Investment of Assets" in the Additional
Statement.

INVESTMENT TECHNIQUES

The investment techniques or instruments described below are used for
the Portfolios' investment programs:

SHORT-TERM INVESTMENTS. Each Portfolio, other than the Money Market
Portfolio, typically invests a part of its assets in various types of U.S.
Government securities and high quality, short-term debt securities with
remaining maturities of one year or less ("money market instruments"). The
Money Market Portfolio invests all of its assets in these types of
securities. This type of short-term investment is made to provide liquidity
for the purchase of new investments and to effect redemptions of shares. The
money market instruments in which each Portfolio may invest include
government obligations, certificates of deposit, bankers' acceptances,
commercial paper, short-term corporate securities and repurchase agreements.

19
<PAGE>

(usually for one day and not for more than one week) subject to an obligation
of the seller to repurchase and of the Portfolio to resell the debt security
at an agreed-upon higher price, thereby establishing a fixed investment
return during the Portfolio's holding period. A Portfolio will enter into
repurchase agreements with member banks of the Federal Reserve System having
total assets in excess of $500 million and with dealers registered with the
SEC. Under each repurchase agreement the selling institution will be
required to maintain as collateral securities whose market value is at least
equal to the repurchase price. Repurchase agreements could involve certain
risks in the event of default or insolvency of the selling institution,
including costs of disposing of securities held as collateral and any loss
resulting from delays or restrictions upon the Portfolio's ability to dispose
of securities. Pursuant to guidelines established by the Portfolio's Board
of Trustees, the Manager considers the creditworthiness of those banks and
non-bank dealers with which a Portfolio enters into repurchase agreements and
monitors on an ongoing basis the value of securities held as collateral to
ensure that such value is maintained at the required level. A Portfolio will
not enter into a repurchase agreement with a dealer if the agreement has a
maturity beyond seven days. The staff of the SEC has taken the position that
repurchase agreements are loans collateralized by the underlying securities.

LOANS OF PORTFOLIO SECURITIES. Each Portfolio may lend its portfolio
securities if such loans are secured continuously by collateral (cash, U.S.
Government or agency obligations or letters of credit) maintained on a daily
basis in an amount at least equal at all times to the market value of the
securities loaned and if the Portfolio does not incur any fees (other than
the transaction fees of its custodian bank) in connection with such loans. A
Portfolio may call the loan at any time on five days' notice and reacquire
the loaned securities. During the loan period, the Portfolio would continue
to receive the equivalent of the interest paid by the issuer on the
securities loaned and would also have the right to receive the interest on
investment of the cash collateral in short-term debt instruments. A portion
of either or both kinds of such interest may be paid to the borrower of such
securities. It is not intended that the value of the securities loaned, if
any, would exceed 10 percent of the value of the total assets of the Equity,
Mid Cap, Small Cap, Managed and Money Market Portfolios and 33 1/3 percent of
the value of the total assets of the U.S. Government Income and Global Equity
Portfolios. Securities loans must also meet applicable tests under the
Internal Revenue Code. A Portfolio could experience various costs or loss if
a borrower defaults on its obligation to return the borrowed securities.

OPTIONS AND FUTURES. To the extent permitted by applicable state law,
the Global Equity, Mid Cap, Small Cap and Equity Portfolios may engage in
options and futures transactions. The Global Equity Portfolio may purchase
and sell financial futures contracts (including bond futures contracts and
index futures contracts), forward foreign currency contracts, foreign
currency futures contracts, options on futures contracts and stock indices
and options on currencies for bona fide hedging or other non-speculative
purposes. The Mid Cap, Small Cap and Equity Portfolios may engage in futures
contracts or options on futures contracts for bona fide hedging or other
non-speculative purposes and to write calls on individual securities. The
Mid Cap, Small Cap, Equity and Managed Portfolios may also enter into forward
foreign currency contracts to purchase or sell foreign currencies in
connection with any transactions in foreign securities. The Small Cap
Portfolio may also engage in options on stock indices. When any of such
Portfolios anticipate a significant market or market sector advance, the
purchase of a futures contract affords a hedge against not participating in
the advance at a time when such Portfolio is not fully invested
("anticipatory hedge"). Such a purchase of a futures contract would serve as
a temporary substitute for the purchase of individual securities, which then
may be purchased in an orderly fashion once the market has stabilized. As
individual securities are purchased, an equivalent amount of futures
contracts could be terminated by offsetting sales. The Portfolios may sell
futures contracts in anticipation of or in a general market or market sector
decline that may adversely affect the market value of such Portfolio's
securities ("defensive hedge"). To the extent that the Portfolios'
securities change in value in correlation with the underlying security or
index, the sale of futures contracts would substantially reduce the risk to
the Portfolios of a market decline and by so doing, provide an alternative to
the liquidation of securities positions in the Portfolios with attendant
transaction costs. So long as the Commodities Futures Trading Commission
rules so require, none of the Portfolios will enter into any financial
futures or options contract unless such transactions are for bona fide
hedging purposes, or for other purposes only if the aggregate initial margins
and premiums required to establish such non-hedging positions would not
exceed 5 percent of the liquidation value of such Portfolio's assets. When
writing put options, the Fund, on behalf of the Portfolio, will maintain in a
segregated account at its Custodian liquid assets with a value equal to at
least the exercise price of the option to secure its obligation to pay for
the underlying security. As a result, such Portfolio forgoes the opportunity
of trading the segregated assets or writing calls against those assets.
There may not be a

20
<PAGE>

complete correlation between the price of options and futures and the market
prices of the underlying securities. The Portfolio may lose the ability to
profit from an increase in the market value of the underlying security or may
lose its premium payment. If due to a lack of a market a Portfolio could not
effect a closing purchase transaction with respect to an OTC option, it would
have to hold the callable securities until the call lapsed or was exercised.

MORTGAGE-BACKED SECURITIES. The U.S. Government Income and Managed
Portfolios may invest in a type of mortgage-backed security known as modified
pass-through certificates. Each certificate evidences an interest in a
specific pool of mortgages that have been grouped together for sale and
provides investors with payments of interest and principal. The issuer of
modified pass-through certificates guarantees the payment of the principal
and interest whether or not the issuer has collected such amounts on the
underlying mortgage.

The average life of these securities varies with the maturities of the
underlying mortgage instruments (generally up to 30 years) and with the
extent of prepayments on the mortgages themselves. Any such prepayments are
passed through to the certificate holder, reducing the stream of future
payments. Prepayments tend to rise in periods of falling interest rates,
decreasing the average life of the certificate and generating cash which must
be invested in a lower interest rate environment. This could also limit the
appreciation potential of the certificates when compared to similar debt
obligations which may not be paid down at will, and could cause losses on
certificates purchased at a premium or gains on certificates purchased at a
discount. Ginnie Mae certificates represent pools of mortgages insured by
the Federal Housing Administration or the Farmers Home Administration or
guaranteed by the Veteran's Administration. The guarantee of payments under
these certificates is backed by the full faith and credit of the United
States. Fannie Mae is a government-sponsored corporation owned entirely by
private stockholders. The guarantee of payments under these instruments is
that of Fannie Mae only. They are not backed by the full faith and credit of
the United States but the U.S. Treasury may extend credit to Fannie Mae
through discretionary purchases of its securities. The U.S. Government has
no obligation to assume the liabilities of Fannie Mae. Freddie Mac is a
corporate instrumentality of the United States government whose stock is
owned by the Federal Home Loan Banks. Certificates issued by Freddie Mac
represent interest in mortgages from its portfolio. Freddie Mac guarantees
payments under its certificates but this guarantee is not backed by the full
faith and credit of the United States and Freddie Mac does not have authority
to borrow from the U.S. Treasury.

The coupon rate of these instruments is lower than the interest rate on
the underlying mortgages by the amount of fees paid to the issuing agencies,
usually approximately 1/2 of 1 percent. It is not anticipated that the
Portfolios' investments will have any particular maturity. Mortgage-backed
securities, due to the scheduled periodic repayment of principal, and the
possibility of accelerated repayment of underlying mortgage obligations,
fluctuate in value in a different manner than other, non-redeemable debt
securities. The U.S. Government Income and Managed Portfolios also may
invest in "collateralized mortgage obligations" ("CMO's") which are debt
obligations secured by mortgage-backed securities where the investor looks
only to the issuer of the security for payment of principal and interest.

PORTFOLIO TRANSACTIONS. The Manager's primary consideration when
executing security transactions with broker-dealers is to obtain, and
maintain the availability of, execution at the most favorable prices and in
the most effective manner possible. The Manager may select CIBC Oppenheimer
Corp. ("CIBC Oppenheimer"), a former affiliate of the Manager, to execute
transactions for the Portfolios. Selection of broker-dealers to execute
portfolio transactions must be done in a manner consistent with the foregoing
primary consideration, the "Rules of Fair Practice" of the National
Association of Securities Dealers, Inc. and such other policies as the Board
of Trustees may determine. (For a further discussion of portfolio trading,
see the Additional Statement, "Investment Management and Other Services.")

INVESTMENT RESTRICTIONS

Each Portfolio is subject to certain investment restrictions which,
together with its investment objective, are fundamental policies changeable
only by shareholder vote. (The restrictions in 1, 2 and 3 do not apply to
U.S. Government securities.) Under some of those restrictions, each
Portfolio may not:

21
<PAGE>

1. Invest more than 5 percent of the value of its total assets in the
securities of any one issuer, or purchase more than 10 percent of the voting
securities, or more than 10 percent of any class of security, of any issuer
(for this purpose all outstanding debt securities of an issuer are considered
as one class and all preferred stock of an issuer are considered as one
class).

2. Concentrate its investments in any particular industry, but if
deemed appropriate for attaining its investment objective, a Portfolio may
invest up to 25 percent of its total assets (valued at the time of
investment) in any one industry classification used by that Portfolio for
investment purposes.

3. Invest more than 5 percent of the value of its total assets in
securities of issuers having a record, together with predecessors, of less
than three years of continuous operation.

4. Make loans, except through the purchase of U.S. Government
securities and corporate debt obligations, repurchase agreements or lending
portfolio securities as described above under "Loans of Portfolio Securities".

5. Borrow money in excess of 10 percent of the value of its total
assets. It may borrow only as a temporary measure for extraordinary or
emergency purposes and will make no additional investments while such
borrowings exceed 5 percent of the total assets. Such prohibition against
borrowing does not prohibit escrow or other collateral or margin arrangements
in connection with the hedging instruments which a Portfolio is permitted to
use by any of its other fundamental policies.

6. Invest more than 15 percent of its assets in illiquid securities
(securities for which market quotations are not readily available) and
repurchase agreements which have a maturity of longer than seven days.
(Money Market Portfolio may not invest more than 10 percent of its assets in
illiquid securities.) Other investment restrictions are described in the
Additional Statement.

All percentage limitations apply immediately after a purchase or initial
investment and any subsequent change in any applicable percentage resulting
from market fluctuations or other changes in the amount of total assets does
not require elimination of any security from a Portfolio.

MANAGEMENT OF THE FUND

The Fund's Board of Trustees has overall responsibility for the
management of the Fund under the laws of Massachusetts governing the
responsibilities of trustees of a Massachusetts business trust. In general,
such responsibilities are comparable to those of directors of a Massachusetts
business corporation. The Board of Trustees of the Fund has undertaken to
monitor the Fund for the existence of any material irreconcilable conflict
between the interests of variable annuity Contractowners, variable life
insurance Contractowners and Qualified Plans due to the difference of tax
treatment and other considerations, and shall report any such conflict to the
boards of the respective life insurance companies which use the Fund as an
investment vehicle for their respective variable annuity and life insurance
contracts and to the Qualified Plans. The Boards of Directors of those life
insurance companies and the Manager have agreed to be responsible for
reporting any potential or existing conflicts to the Trustees of the Fund. If
a material irreconcilable conflict exists that affects those life insurance
companies, those life insurance companies have agreed, at their own cost, to
remedy such conflict up to and including establishing a new registered
management investment company and segregating the assets underlying the
variable annuity contracts and the variable life insurance contracts.
Qualified Plans which acquire more than 10 percent of the assets of the Fund
will be required to report any potential or existing conflicts to the
Trustees of the Fund, and if a material irreconcilable conflict exists, to
remedy such conflict, up to and including redeeming Shares of the Portfolios
held by the Qualified Plans. The Additional Statement contains information
about the Trustees and Officers.

22
<PAGE>

advice and recommendations with respect to investments, investment policies
and the purchase and sale of securities and provides certain administrative
services for the Fund.

Under the Advisory Agreement the annual management fee is computed at an
annual rate of .80 percent on the first $400 million, .75 percent on the next
$400 million and .70 percent thereafter of the average daily net assets for
the Equity, Mid Cap, Global Equity, Managed and Small Cap Portfolios, .60
percent of the average daily net assets of the U.S. Government Income
Portfolio, and .40 percent of the average daily net assets of the Money
Market Portfolio.

Under the Advisory Agreement, each Portfolio is responsible for bearing
organizational expenses, taxes and governmental fees; brokerage commissions,
interest and other expenses incurred in acquiring and disposing of portfolio
securities; trustees fees, out of pocket travel expenses and other expenses
for trustees who are not interested persons; legal, accounting and audit
expenses; custodian, dividend disbursing and transfer agent fees; and other
expenses not expressly assumed by the Manager under the Advisory Agreement,
which is discussed below. The Manager will reimburse the Fund such that the
total operating expenses (net of any expense offsets) of the Global Equity
Portfolio of the Fund do not exceed 1.25 percent of its average daily net
assets and so that the total operating expenses (net of any expense offsets)
of each of the other Portfolios of the Fund do not exceed 1.00% of their
respective average daily net assets.

The Manager is a subsidiary of Oppenheimer Capital, a registered
investment adviser with approximately $67.6 billion in assets under
management on March 31, 1998. All investment management services performed
under the Advisory Agreement are performed by employees of Oppenheimer
Capital. On November 4, 1997, PIMCO Advisors L.P. ("PIMCO Advisors"), a
registered investment adviser, and its affiliates acquired control of
Oppenheimer Capital and its subsidiary OpCap Advisors, the Manager of the
Fund. PIMCO Advisors and its affiliates (not including Oppenheimer Capital)
had $145.5 billion in assets under management on February 28, 1998. A new
Advisory Agreement (on identical terms as the previous Advisory Agreement)
between the Fund and OpCap Advisors became effective November 5, 1997. The
new Advisory Agreement was approved by the shareholders of each Portfolio of
the Fund at a Special Meeting of Shareholders held on October 14, 1997. On
November 30, 1997, Oppenheimer Capital merged with a subsidiary of PIMCO
Advisors and, as a result, Oppenheimer Capital and OpCap Advisors became
indirect wholly-owned subsidiaries of PIMCO Advisors. PIMCO Advisors has two
general partners: PIMCO Partners, G.P. ("PIMCO G.P.") a California general
partnership, and PIMCO Advisors Holdings L.P. (formerly Oppenheimer Capital,
L.P.), an NYSE-listed Delaware limited partnership of which PIMCO G.P. is the
sole general partner. PIMCO GP beneficially owns or controls (through its
general partner interest in PIMCO Advisors Holdings, L.P., formerly
Oppenheimer Capital, L.P.) greater than 80% of the units of limited
partnership ("Units") of PIMCO Advisors. PIMCO GP has two general partners.
The first of these is PIMCO Holding LLC, a Delaware limited liability company
and an indirect wholly-owned subsidiary of Pacific Life Insurance Company
("Pacific Life"). The managing general partner of PIMCO GP is PIMCO Partners
L.L.C. ("PPLLC"), a California limited liability company. PPLLC's members
are the Managing Directors (the "PIMCO Managers") of Pacific Investment
Management Company, a subsidiary of PIMCO Advisors (the "PIMCO
Subpartnership"). The PIMCO Managers are: William H. Gross, Dean S.
Meiling, James F. Muzzy, William F. Podlich, III, Brent R. Harris, John L.
Hague, William S. Thompson Jr., William S. Powers, David H. Edington,
Benjamin Trosky, William R. Benz, II and Lee R. Thomas, III. PIMCO Advisors
is governed by a Management Board, which consists of sixteen members,
pursuant to a delegation by its general partners. PIMCO GP has the power to
designate up to nine members of the Management Board and the PIMCO
Subpartnership, of which the PIMCO Managers are the Managing Directors, has
the power to designate up to two members. In addition, PIMCO GP, as the
controlling general partner of PIMCO Advisors, has the power to revoke the
delegation to the Management Board and exercise control of PIMCO Advisors.
As a result, Pacific Life and/or the PIMCO Managers may be deemed to control
PIMCO Advisors. Pacific Life and the PIMCO Managers disclaim such control.
Because of direct or indirect power to appoint 25% of the members of the
Equity Board, (i) Pacific Life and (ii) the PIMCO Managers and/or the PIMCO
Subpartnership may each be deemed, under applicable provisions of the
Investment Company Act, to control PIMCO Advisors. Pacific Life, the PIMCO
Subpartnership and the PIMCO Managers disclaim such control. The Additional
Statement contains more information about the Advisory Agreement, including a
more complete description of the management fee and expense arrangements,
exculpation provisions and portfolio transactions for the Fund.

23
<PAGE>
DETERMINATION OF NET ASSET VALUE

The net asset value per share is calculated separately for each
Portfolio. The net asset value of each Portfolio is determined at the close
of the regular trading session ("Close") of the NYSE (currently 4:00 p.m.
Eastern Time) each day the NYSE is open and on each other day on which there
is a sufficient degree of trading in any Portfolio's securities affecting
materially the value of such securities (if the Fund receives a request to
redeem its shares that day), by dividing the value of the Portfolio's net
assets by the number of shares outstanding. The Fund's Board of Trustees has
established procedures to value the Portfolios' securities to determine net
asset value; in general, except for the Money Market Portfolio, those
valuations are based on market value, with special provisions for (i)
securities (including restricted securities) not having readily-available
market quotations and (ii) short-term debt securities. Securities listed on a
national securities exchange or designated as national market system
securities are valued at the last sale price or, if there has been no sale
that day or on the previous day on which the exchange was open (if a week has
not elapsed between such days), at the last bid price. Debt and equity
securities actively traded in the over-the-counter market but not designated
as national market system securities are valued at the most recent bid price.
Valuations may be provided by a pricing service or from independent
securities dealers. Short-term investments with remaining maturities of less
than 60 days are valued at amortized cost so long as the Fund's Board of
Trustees determines in good faith that such method reflects fair value.
Other securities are valued by methods that the Fund's Board of Trustees
believes accurately reflect fair value.

Generally, trading in foreign securities is substantially completed each
day at various times prior to the Close of the NYSE. The values of such
securities used in computing the net asset value of a Portfolio's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the Close of the NYSE. If events materially
affecting the value of such securities and exchange rates occur between the
time of such determination and/or the Close of the NYSE, then these
securities will be valued at their fair value as determined in good faith
under procedures established by and under the supervision of the Fund's
Board. Further details are in the Additional Statement. The Money Market
Portfolio uses the amortized cost method of valuation as described in
"Additional Information on Investment Objectives and Policies - Securities in
which the Money Market Portfolio Invests" in this Prospectus and
"Determination of Net Asset Value" in the Additional Statement and generally
will have a constant net asset value of $1.00 per share except under
extraordinary circumstances.

PURCHASE OF SHARES

Investments in the Fund may be made only by Variable Accounts and
Qualified Plans. Persons desiring to purchase Contracts funded by any
Portfolio or Portfolios of the Fund should read this Prospectus in
conjunction with the Prospectus of the Variable Accounts.

Shares of each Portfolio of the Fund are offered to the Variable
Accounts and Qualified Plans without sales charge at the respective net asset
values of the Portfolios next determined after receipt by the Fund of the
purchase payment in the manner set forth above under "Determination of Net
Asset Value." Certificates representing shares of the Fund will not be
physically issued. OCC Distributors acts without remuneration from the Fund
as the exclusive Distributor of the Fund's shares. The principal executive
office of the Distributor is located at Two World Financial Center, New York,
New York l0080.

REDEMPTION OF SHARES

24
<PAGE>

redemption instructions in proper form. The redemption privilege may be
suspended and payment postponed during any period when: (l) the NYSE is
closed other than for customary weekend or holiday closings or trading
thereon is restricted as determined by the SEC; (2) an emergency, as defined
by the SEC exists making trading of portfolio securities or valuation of net
assets not reasonably practicable; (3) the SEC has by order permitted such
suspension.

STATE LAW RESTRICTIONS

The investments of the Variable Accounts are subject to the provisions
of the insurance laws of the States of domicile of the life insurance
companies offering the Contracts. The Fund and its Portfolios will
voluntarily comply with the statutory investment restrictions applicable to
the investments of life insurance company separate accounts, of the States of
domicile of the life insurance companies offering the Contracts, even though
these state law investment restrictions do not apply to the Fund and its
Portfolios. For a description of the state law restrictions applicable to
the separate accounts of the life insurance companies offering the Contracts,
see the Prospectus for the Variable Accounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Portfolio intends to distribute substantially all of its net
investment income and any net realized capital gains. Dividends from net
investment income and any distributions of realized capital gains will be
paid in additional shares of the Portfolio paying the dividend or making the
distribution and credited to the shareholder's account unless the shareholder
elects to receive such dividends or distributions in cash.

MONEY MARKET PORTFOLIO. Dividends from net income on the Money Market
Portfolio will be declared on each day the NYSE is open for business to
shareholders of record as of the close of business the preceding business
day. Net income, for dividend purposes, includes accrued interest and
accretion of any discount, less the amortization of market premium and the
estimated expenses of the Money Market Portfolio. The amount of dividend may
fluctuate from day to day and may be omitted on some days. Daily dividends
accrued since the prior dividend payment will be paid monthly. Any net
realized long-term capital gains will be declared and paid at least once per
calendar year; net short-term gains may be paid more frequently, with the
distribution of dividends from net investment income.

U.S. GOVERNMENT INCOME PORTFOLIO. Dividends from net investment income
on the U.S. Government Income Portfolio will be declared on each day the
NYSE is open for business to shareholders of record as of the close of
business the preceding business day. The Portfolio will pay monthly
dividends from net investment income. Distributions of realized net
short-term capital gains, if any, and realized long-term capital gains will
be declared and paid at least once per calendar year.

EQUITY, MID CAP, SMALL CAP, GLOBAL EQUITY AND MANAGED PORTFOLIOS.
Dividends from net investment income, if any, on the Small Cap, Mid Cap,
Equity, Global Equity and Managed Portfolios will be declared and paid at
least annually, and any net realized capital gains, if any, will be declared
and paid at least once per calendar year.

TAXES. Because the Fund intends to distribute all of the net investment
income and capital gains of each Portfolio and otherwise qualify each
Portfolio as a regulated investment company under Subchapter M of the
Internal Revenue Code, it is not expected that any Portfolio of the Fund will
be required to pay any federal income tax on such income and capital gains.
Since the Variable Accounts and the Qualified Plans are the sole shareholders
of the Fund, no discussion is presented herein as to the federal income tax
consequences at the shareholder level. For information concerning the
federal income tax consequences to contractowners, see the Prospectus for
the Variable Accounts.

25
<PAGE>

CALCULATION OF PERFORMANCE

From time to time the performance of one or more of the Portfolios may
be advertised. The performance data contained in these advertisements is
based upon historical earnings and is not indicative of future performance.
The data for each Portfolio reflects the results of that Portfolio of the
Fund and recurring charges and deductions borne by or imposed on the
Portfolio. As the performance for any Portfolio does not include charges and
deductions under the Contracts, comparisons with other portfolios used in
connection with different variable accounts may not be useful. Set forth
below for each Portfolio is the manner in which the data contained in such
advertisements will be calculated as well as performance information for the
Portfolios as indicated below. This performance information does not include
charges and deductions which are imposed under the Contracts and described in
the Prospectus for the Variable Accounts.

MONEY MARKET PORTFOLIO. The performance data for this Portfolio will
reflect the "yield" and "effective yield". The "yield" of the Portfolio
refers to the income generated by an investment in the Portfolio over the
seven day period stated in the advertisement. This income is "annualized",
that is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" is calculated similarly,
but, when annualized, the income earned by an investment in the Portfolio is
assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment.

YIELD FOR 7-DAY PERIOD ENDED DECEMBER 31, 1997 FOR
MONEY MARKET PORTFOLIO OF OCC ACCUMULATION TRUST

YIELD
CURRENT EFFECTIVE
<S> <C> <C>
MONEY MARKET PORTFOLIO 4.36% 4.45%
---- ----

</TABLE>

PORTFOLIOS OTHER THAN THE MONEY MARKET PORTFOLIO. The performance data for
these Portfolios will reflect the "total return" and may reflect the "yield.".
The "yield" refers to the income generated by an investment in that Portfolio
over the 30 day period stated in the advertisement and is the result of dividing
that income by the value of the Portfolio. The value of each Portfolio is the
average daily number of shares outstanding multiplied by the net asset value per
share on the last day of the period. "Total Return" for each of these
Portfolios refers to the value a Shareholder would receive on the date indicated
if a $1,000 investment had been made the indicated number of years ago. It
reflects historical investment results less charges and deductions of the Fund.

<TABLE>
<CAPTION>
YIELD FOR 30-DAY PERIOD ENDED DECEMBER 31, 1997 FOR
U.S. GOVERNMENT INCOME PORTFOLIO OF OCC ACCUMULATION TRUST

YIELD
<S> <C>
U.S. GOVERNMENT INCOME PORTFOLIO 5.32%
----
</TABLE>

26
<PAGE>

AVERAGE ANNUAL TOTAL RETURN OF EQUITY, MID CAP, MANAGED, SMALL CAP, U.S.
GOVERNMENT INCOME AND GLOBAL EQUITY PORTFOLIOS
OF OCC ACCUMULATION TRUST(1),(2)

<TABLE>
<CAPTION>
For the one year For the five year For the period from
period ended period ended inception to
Portfolio December 31, 1997 December 31, 1997 December 31, 1997*
--------- ----------------- ------------------ --------------------
<S> <C> <C> <C>
Equity 26.63% 19.41% 17.56%
Mid-Cap N/A N/A N/A
Managed 22.29% 19.86% 20.32%
Small Cap 22.24% 14.61% 15.45%
U.S. Government Income 7.04% N/A 7.66%
Global Equity 14.02% N/A 16.91%
</TABLE>

*Inception date of the Global Equity Portfolio is March 1, 1995, the
inception date of the U.S. Government Income Portfolio is January 3, 1995 and
the inception date of the Mid Cap Portfolio is February 9, 1998. The Equity,
Managed and Small Cap Portfolios commenced operations as part of the Fund on
September 16, 1994. The Old Trust commenced operations on August 1, 1988.

(1)On September 16, 1994, an investment company then called Quest for
Value Accumulation Trust (the "Old Trust") was effectively divided into two
investment funds, the Old Trust and the Fund, at which time the Fund
commenced operations. The total net assets for each of the Equity, Small Cap
and Managed Portfolios immediately after the transaction were $86,789,755,
$139,812,573 and $682,601,380, respectively, with respect to the Old Trust
and for each of the Equity, Small Cap and Managed Portfolios, $3,764,598,
$8,129,274 and $51,345,102 respectively, with respect to the Fund.

For the period prior to September 16, 1994, the performance figures
above for each of the Equity, Small Cap and Managed Portfolios reflect the
performance of the corresponding Portfolios of the Old Trust.

(2)Reflects waivers of all or a portion of the advisory fees and
reimbursement of other expenses for certain Portfolios by the Manager.
Without such waivers and reimbursements, the average annual total return
during the periods would have been lower.

In addition, reference in advertisements may be made to various indices,
including, without limitation, the S&P 500 Stock Index, the S&P Mid Cap
Index, the Wilshire 750 Mid Cap Index, the Russell Mid Cap Index, the Russell
2000, the Lehman Brothers Corporate/Government Index, the Lehman Brothers US
Government Bond Index and the Morgan Stanley International (MSCI) All Country
World Index, and various rankings by independent evaluators such as
Morningstar and Lipper Analytical Services, Inc. in order to provide the
reader a basis for comparison.

ADDITIONAL INFORMATION

ORGANIZATION OF THE FUND. The Fund was organized as a Massachusetts
business trust on May 12, 1994 and is registered with the SEC as an open-end
diversified management investment company. When issued, shares are fully
paid and have no preemptive or conversion rights. The shares of beneficial
interest of the Fund, $0.01 par value, are divided into seven separate
series. The shares of each series are freely-transferable and equal as to
earnings, assets and voting privileges with all other shares of that series.
There are no conversion, preemptive or other subscription rights. Upon
liquidation of the Fund or any Portfolio, shareholders of a Portfolio are
entitled to share pro rata in the net assets of that Portfolio available for
distribution to shareholders after all debts and expenses have been paid.
The shares do not have cumulative voting rights.

27
<PAGE>

identical except as to dividends or may have separate assets and liabilities;
classes having separate assets and liabilities are referred to as "series".
The creation of additional series and offering of their shares (the proceeds
of which would be invested in separate, independently managed portfolios with
distinct investment objectives, policies and restrictions) would not affect
the interests of the current shareholders in the existing Portfolios.

The assets received by the Fund on the sale of shares of each Portfolio
and all income, earnings, profits and proceeds thereof, subject only to the
rights of creditors, are allocated to each Portfolio, and constitute the
assets of such Portfolio. The assets of each Portfolio are required to be
segregated on the Fund's books of account. The Fund's Board of Trustees has
agreed to monitor the portfolio transactions and management of each of the
Portfolios and to consider and resolve any conflict that may arise.

VOTING. For matters affecting only one Portfolio, only the shareholders
of that Portfolio are entitled to vote. For matters relating to all the
Portfolios but affecting the Portfolios differently, separate votes by
Portfolio are required. Approval of an Investment Management Agreement and a
change in fundamental policies would be regarded as matters requiring
separate voting by each Portfolio. To the extent required by law, the
Variable Accounts will vote the shares of the Fund, or any Portfolio of the
Fund, held in the Variable Accounts in accordance with instructions from
Contractowners, as described under the caption "Voting Rights" in the
accompanying Prospectus for the Variable Accounts. Shares for which no
instructions are received as well as shares which the Manager or its parent,
Oppenheimer Capital, may own, will be voted in the same proportion as shares
for which instructions are received. The Fund does not intend to hold annual
meetings of shareholders. However, the Board of Trustees will call special
meetings of shareholders for action by shareholder vote as may be requested
in writing by holders of 10 percent or more of the outstanding shares of a
Portfolio or as may be required by applicable laws or the Declaration of
Trust pursuant to which the Fund has been organized.

Under Massachusetts law shareholders could, in certain circumstances, be
held personally liable as partners for Fund obligations. The Fund's
Declaration of Trust contains an express disclaimer of shareholder liability
for acts or obligations of the Fund and requires that notice of such
disclaimer be given in each instrument entered into or executed by the Fund.
The Declaration of Trust also provides for indemnification out of the Fund's
property for any shareholder held personally liable for any Fund obligation.
Thus, the risk of loss to a shareholder from being held personally liable for
obligations of the Fund is limited to the unlikely circumstance in which the
Fund itself would be unable to meet its obligations.

CUSTODIAN AND TRANSFER AGENT. The custodian of the assets of the Fund
is State Street Bank and Trust Company, P.O. Box 8505, Boston, MA
02266-8505, which also acts as transfer agent and shareholder servicing agent
for the Fund.

CONTRACTOWNERS INQUIRIES. Inquiries concerning the purchase and sale of
shares of the Fund, dividends, account statements and management and
investment policies of the Fund should be directed to the respective life
insurance companies which use the Fund as an investment vehicle for their
respective variable annuity and life insurance contracts.

YEAR 2000 ISSUES. The management services provided to the Fund by the
Manager, and the services provided by the Transfer Agent to shareholders,
depend on the smooth functioning of their computer systems. Many computer
software systems in use today cannot recognize the year 2000, but revert to
1900 or some other incorrect date, due to the manner in which dates were
encoded and calculated. That failure could have a negative impact on the
handling of securities trades, pricing and account services. Improperly
functioning trading systems may result in settlement problems and liquidity
issues. In addition, corporate and governmental data processing errors may
result in production problems for individual companies and overall economic
uncertainties. Earnings of individual issuers may be affected by remediation
costs, which may be substantial. The Manager and Transfer Agent have been
actively working on necessary changes to their own computer systems to deal
with the year 2000 and expect that their systems will be adapted before that
date, but there can be no assurance that they will be successful or that
interaction with other noncomplying computer systems will not impair their
services at that time.

28
<PAGE>
APPENDIX

DESCRIPTION OF COMMERCIAL PAPER AND CORPORATE BOND RATINGS

COMMERCIAL PAPER RATINGS

Moody's commercial paper ratings are opinions of the ability of issuers
to repay promissory obligations when due. Moody's employs the following
three designations, all judged to be investment grade, to indicate the
relative repayment capacity of rated issuers: Prime 1 - Superior Ability for
Repayment; Prime 2 - Strong Ability for Repayment; Prime 3 - Acceptable
Ability for Repayment.

S&P's commercial paper rating is a current assessment of the likelihood
of timely payment. Ratings are graded into four categories, ranging from "A"
for the highest quality obligations to "D" for the lowest. Issues assigned
the highest rating, "A", are regarded as having the greatest capacity for
timely payment. Issues in this category are delineated with the numbers "1",
"2", and "3" to indicate the relative degree of safety. The designation
"A-1" indicates that the degree of safety regarding timely payment is either
overwhelming or very strong. The "A+" designation is applied to those issues
rated "A-1" which possess overwhelming safety characteristics. Capacity for
timely payment on issues with the designation "A-2" is strong. However, the
relative degree of safety is not as high as for issues designated "A-1."

Fitch's commercial paper ratings represent Fitch's assessment of the
issuer's ability to meet its obligations in a timely manner. The assessment
places emphasis on the existence of liquidity. Ratings range from "F-1+"
which represents exceptionally strong credit quality to "F-4" which
represents weak credit quality.

Duff's short-term ratings apply to all obligations with maturities of
under one year, including commercial paper, the uninsured portion of
certificates of deposit, unsecured bank loans, master notes, bankers
acceptances, irrevocable letters of credit and current maturities of
long-term debt. Emphasis is placed on liquidity. Ratings range for Duff 1+
for the highest quality to Duff 5 for the lowest, issuers in default. Issues
rated Duff 1+ are regarded as having the highest certainty of timely payment.
Issues rated Duff 1 are regarded as having very high certainty of timely
payment.

Thomson's BankWatch, Inc. assigns only one Issuer Rating to each
company, based upon a qualitative and quantitative analysis of the
consolidated financials of an issuer and its subsidiaries. The rating
incorporates TBW's opinion of the vulnerability of the company to adverse
developments which may impact the marketability of its securities, as well as
the issuer's ability to repay principal and interest. Ratings range from
"TBW-1" for highest quality to "TBW-3" for the lowest, companies with very
serious problems.

BOND RATINGS

A bond rated "Aaa" by Moody's is judged to be the best quality. They
carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is
deemed secure. While the various protective elements may change, such
foreseeable changes are unlikely to impair the fundamentally strong position
of such issues. Bonds which are rated "Aa" are judged to be of high quality
by all standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. Margins of protection on "Aa" bonds may
not be as large as on "Aaa" securities or fluctuations of protective elements
may be of greater magnitude or there may be other elements present which make
the long-term risks appear somewhat larger than "Aaa" securities. Bonds
which are rated "A" possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the future. Bonds
rated "Baa" are considered medium grade obligations whose interest payments
and principal security appear adequate for the present but may lack certain
protective elements or may be characteristically unreliable over any great
length of time. Moody's applies numerical modifiers "1", "2" and "3" in each
generic rating classification from "Aa" through "B" in its corporate bond
rating system. The modifier "1" indicates that the security ranks in the
higher end of its generic rating category; the modifier "2" indicates a mid-

29
<PAGE>

range ranking; and the modifier "3" indicates that the issue ranks in the
lower end of its generic rating category. Bonds rated "Ba" are judged to have
speculative elements and bonds rated below "Ba" are speculative to a higher
degree.

Debt rated "AAA" by S&P has the highest rating assigned by it. Capacity
to pay interest and repay principal is extremely strong. Debt rated "AA" has
a strong capacity to pay interest and repay principal and differs from "AAA"
issues only in small degree. Debt rated "A" has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt
in higher rated categories. Debt rated "BBB" is regarded as having an
adequate capacity to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. Debt rated "BB" and below is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position within the category.

Debt rated "AAA", the highest rating by Fitch, is considered to be 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. Debt rated "AA" is regarded as very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong. Debt rated "A" is of high credit quality. The obligor's
ability to pay interest and repay principal is considered to be strong, but
may be more vulnerable to adverse changes in economic conditions and
circumstances than debt with higher ratings. Debt rated "BBB" is of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is adequate, however a change in economic conditions may adversely
affect timely payment. Plus (+) and minus (-) signs are used with a rating
symbol (except "AAA") to indicate the relative position within the category.

Debt rated "AAA", the highest rating by Duff is considered to be of the
highest credit quality. The risk factors are negligible being only slightly
more than for risk-free U.S. Treasury debt. Debt rated "AA" is regarded as
high credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions. Debt rated
"A" is considered to have average but adequate protection factors. Bonds
rated "BBB" are considered to have below average protection factors but still
sufficient for prudent investment. Bonds rated "BB" and below are below
investment grade and possess fluctuating protection factors and risk. Plus
(+) and minus (-) signs are used with a rating symbol to indicate the
relative position within the category.

<PAGE>

OCC ACCUMULATION TRUST
One World Financial Center, New York, New York 10281

OCC ACCUMULATION TRUST (formerly known as Quest for Value Accumulation Trust,
the "Fund") is a registered open-end diversified management investment company
offering several investment alternatives. It permits an investor the
flexibility of choosing among different investment objectives, through the
following one Portfolio (the "Portfolio"), which is a separate series of shares
of beneficial interest of the Fund ("Shares"). The investment objective of the
Portfolio is as follows:

EQUITY PORTFOLIO: Long term capital appreciation through investment in a
diversified portfolio of equity securities selected on the basis of a value
oriented approach to investing.

The Fund is an investment vehicle for variable annuity and variable life
insurance contracts of various life insurance companies, and qualified pension
and retirement plans ("Qualified Plans"). Shares of the Fund are currently sold
to variable accounts of various life insurance companies for the purpose of
funding variable annuity and variable life insurance contracts (the
"Contracts"). These variable accounts (the "Variable Accounts") invest in
Shares of the Fund in accordance with allocation instructions received from
owners (the "Contractowners") of the Contracts. Allocation rights are further
described in the accompanying prospectus for the Variable Accounts. The
Variable Accounts will redeem Shares to the extent necessary to provide benefits
under the Contracts.

It is possible, although not presently anticipated, that a material
conflict could arise between and among the various variable accounts which
invest in Shares of the Fund and the Qualified Plans, which may, in the future
invest in Shares of the Fund. Such conflict could cause the liquidation of
assets of one or more of the Fund Portfolios to raise cash at times not
otherwise deemed advantageous by the Fund Manager. See "Management of the
Fund," page 12.

OPCAP ADVISORS
Investment Manager
Prospectus dated May 1, 1998

<PAGE>

TABLE OF CONTENTS

Page
----
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Investment Objective and Policies. . . . . . . . . . . . . . . . . . . . . . .7

Equity Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Additional Information on Investment Objective and Policies. . . . . . . . . .7

Investment Techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . 13

Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

State Law Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . 14

Calculation of Performance . . . . . . . . . . . . . . . . . . . . . . . . . 15

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

2
<PAGE>

PROSPECTUS SUMMARY

THE FUND The Fund is a Massachusetts business trust which issues
its shares in series as separate classes of shares of
beneficial interest. There is currently one series
available for investment through the Variable Accounts,
which is designated as a or the "Portfolio" or the
"Equity Portfolio."

The Fund commenced operations on September 16, 1994
when an investment company then called Quest for Value
Accumulation Trust, with one of its portfolios
corresponding to the one available portfolio of the
Fund, was effectively divided into two investment
funds, the original investment company, whose name was
changed, and the Fund.

INVESTMENT OBJECTIVE
AND RESTRICTIONS The investment objective of the Portfolio is set forth
on the cover page of this Prospectus. This objective
is described in more detail under the heading
"Investment Objective and Policies." Although the
Portfolio will be actively managed by experienced
professionals, there can be no assurance that the
objective will be achieved.

The value of the portfolio securities of the Portfolio
and therefore the Portfolio's net asset value per share
are expected to increase or decrease because of varying
factors. There are generally two types of risk
associated with an investment in one or more of the
Portfolios; market (or interest rate) risk and
financial (or credit) risk. Market risk for equities
is the risk associated with movement of the stock
market in general.

Market risk for fixed income securities is the risk
that interest rates will change, thereby affecting
their value. Generally, the value of fixed income
securities declines as interest rates rise, and
conversely, their value rises as interest rates
decline. The second type of risk, financial or credit
risk, is associated with the financial condition and
profitability of an individual equity or fixed income
issuer. The financial risk in owning equities is
related to earnings stability and overall financial
soundness of individual issuers and of issuers
collectively which are part of a particular industry.
For fixed income securities, credit risk relates to the
financial ability of an issuer to make periodic
interest payments and ultimately repay the principal at
maturity. (See "Additional Information on Investment
Objectives and Policies" for risk aspects of the
individual Portfolios).

INVESTMENT MANAGER OpCap Advisors (the "Manager"), the investment manager
of the Portfolio, is investment manager and sub-adviser
to several other registered investment companies with
assets under management of approximately $18.3 billion
at March 31, 1998 and is a subsidiary of Oppenheimer
Capital, a registered investment adviser, which had
assets under management, including those of OpCap
Advisors, of approximately $67.6 billion at March 31,
1998.

MANAGEMENT FEE The Manager receives a monthly fee from the Portfolio
at varying annual percentage rates of average daily net
assets, as follows: .80 percent on the first $400
million, .75 percent on the next $400 million and .70
percent thereafter of the average daily net assets for
the Equity Portfolio (see page 12).

3
<PAGE>

PURCHASES AND
REDEMPTION OF SHARES Currently, shares of the Fund are sold at their net
asset value per share, without sales charge, for
allocation to the Variable Accounts as the underlying
investment for the Contracts. Accordingly, the
interest of the Contractowner with respect to the Fund
is subject to the terms of the Contract as described in
the accompanying Prospectus for the Variable Accounts,
which should be reviewed carefully by a person
considering the purchase of a Contract. That
Prospectus describes the relationship between increases
or decreases in the net asset value of Fund shares and
any distributions on such shares, and the benefits
provided under a Contract. The rights of the Variable
Accounts as shareholders of the Fund should be
distinguished from the rights of a Contractowner which
are described in the Contract. As long as shares of
the Fund are sold for allocation to the Variable
Accounts, the terms "shareholder" or "shareholders" in
this Prospectus shall refer to the Variable Accounts.
Shares are redeemed at their respective net asset
values as next determined after receipt of proper
notice of redemption.

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus, the Additional Statement, and the accompanying
Prospectus for the Variable Accounts.

4
<PAGE>

OCC ACCUMULATION TRUST

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1997, 1996 and 1995,
and for the period from September 16, 1994 through December 31, 1994 for the
Equity Portfolio have been audited by Price Waterhouse LLP, independent
accountants, whose unqualified report thereon appears in the Additional
Statement (Part B). This information should be read in conjunction with the
financial statements and related notes thereto included in the Additional
Statement. Total return information for the Equity Portfolio provided in the
Financial Highlights does not include charges and deductions which are imposed
under the Contracts and described in the Prospectus for the Variable Accounts.
Inclusion of these charges and deductions would reduce the total return of the
Portfolio of the Fund. Further information about the performance of the Equity
Portfolio is available in the Fund's Annual Report or semi-annual report.
Annual reports or semi-annual reports can be obtained without charge upon
written requests to the insurance companies issuing the Contracts.

5
<PAGE>

OCC ACCUMULATION TRUST
EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

Year ended December 31,
--------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
--------------- ------------ ----------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $30.07 $25.05 $18.12 $18.57
----------- ----------- ---------- ----------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.39 0.21 0.31 0.09
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . 7.34 5.52 6.71 (0.54)
----------- ----------- ---------- ----------
Total income from investment operations. . . . . . . . . . 7.73 5.73 7.02 (0.45)
----------- ----------- ---------- ----------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income . . . . . . . . . . . . . . . . . . (0.28) (0.24) (0.09) -
Distributions to shareholders from
net realized gains. . . . . . . . . . . . . . . . . . . . (1.00) (0.47) - -
----------- ----------- ---------- ----------
Total dividends and distributions to shareholders. . . . . (1.28) (0.71) (0.09) -
----------- ----------- ---------- ----------
Net asset value, end of period . . . . . . . . . . . . . . . $36.52 $30.07 $25.05 $18.12
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Total return (2) . . . . . . . . . . . . . . . . . . . . . . 26.6% 23.4% 38.9% (2.4%)
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Net assets, end of period. . . . . . . . . . . . . . . . . . $28,819,978 $19,842,998 $9,035,982 $4,281,256
----------- ----------- ---------- ----------
Ratio of net operating expenses
to average net assets (5). . . . . . . . . . . . . . . . 0.99%(4) 0.93%(6) 0.72%(6) 0.72%(3,6)
----------- ----------- ---------- ----------
Ratio of net investment income
to average net assets. . . . . . . . . . . . . . . . . . 1.25%(4) 1.29%(6) 1.74%(6) 1.80%(3,6)
----------- ----------- ---------- ----------
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 32% 36% 31% 6%
----------- ----------- ---------- ----------
Average commission rate . . . . . . . . . . . . . . . . . . $0.0557 $0.0588 -- --
----------- ----------- ---------- ----------
- -------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $24,986,972.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net
operating expenses to average net assets and the ratios of net investment
income to average net assets would have been 1.05% and 1.15%,
respectively, for the year ended December 31, 1996, 1.26% and 1.20%,
respectively, for the year ended December 31, 1995 and 2.09% and 0.43%,
annualized, respectively, for the period September 16, 1994 (commencement
of operations) to December 31, 1994.

6
<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

The investment objective and policies of the Portfolio are described below.
The investment objective of the Portfolio is a fundamental policy which cannot
be changed for the Portfolio without a majority vote of the shareholders of the
Portfolio; investment policies are not fundamental and may be adjusted by the
Manager at any time, usually in response to its perception of developments in
the securities markets. The extent to which the Portfolio will be able to
achieve its distinct investment objectives depends upon the Manager's ability to
evaluate and develop the information it receives into a successful investment
program. Although the Portfolio will be managed by experienced professionals,
there can be no assurance that the Portfolio will achieve its investment
objective. The values of the securities held in the Portfolio will fluctuate
and the net asset value per share at the time shares are redeemed may be more or
less than the net asset value per share at the time of purchase. Investors
should also refer to "Investment Techniques" for additional information
concerning the investment techniques employed for the Portfolio.

INVESTMENT OBJECTIVE OF THE PORTFOLIO

EQUITY PORTFOLIO

ADDITIONAL INFORMATION ON INVESTMENT OBJECTIVE AND POLICIES

For the Equity Portfolio, at times when the investment climate is viewed as
favorable, common stocks will be heavily emphasized. Under normal
circumstances, at least 65 percent of the Portfolio's assets will be invested in
common stocks or securities convertible into common stocks.

In the event that future economic or financial conditions adversely affect
equity securities, or stocks are considered overvalued, the Equity Portfolio may
invest a substantial portion of its assets in debt securities, with an emphasis
on money market instruments or cash and cash equivalents.

The Portfolio will in the normal course have varying amounts of cash assets
which have not yet been invested in accordance with its objectives. This cash
will be temporarily invested in high quality short term money market securities
and cash equivalents.

Regulations under Section 817(h) of the Internal Revenue Code ("IRC
817(h)") require the Portfolio to diversify its investments. To comply with
these regulations the Portfolio is required to diversify its investments so that
on the last day of each quarter of a calendar year no more than 55 percent of
the value of its total assets is

7
<PAGE>

represented by any one investment, no more than 70 percent is represented by any
two investments, no more than 80 percent is represented by any three
investments, and no more than 90 percent is represented by any four investments.
For this purpose, securities of a given issuer generally are treated as one
investment, but each U.S. Government agency and instrumentality is treated as a
separate and distinct issuer. As such, any security issued, guaranteed, or
insured (to the extent so guaranteed or insured) by the U.S. or an agency or
instrumentality of the U.S. is treated as a security issued by the U.S.
Government or its agency or instrumentality, whichever is applicable. These
diversification rules limit the amount that the Portfolio can invest in any
single issuer, including direct obligations of the U.S. Treasury, to 55 percent
of the Portfolio's total assets at the end of any calendar quarter.

MANAGEMENT OF ASSETS

The Manager intends to manage the Portfolio's assets by buying and selling
securities to help attain its investment objective. This may result in
increases or decreases in the Portfolio's current income available for
distribution to its shareholders. While the Portfolio is not managed with the
intent of generating short-term capital gains, each of the Portfolios may
dispose of investments (including money market instruments) regardless of the
holding period if, in the opinion of the Manager, an issuer's creditworthiness
or perceived changes in a company's growth prospects or asset value make selling
them advisable. Such an investment decision may result in capital gains or
losses and could result in a high portfolio turnover rate during a given period,
resulting in increased transaction costs related to equity securities.
Disposing of debt securities in these circumstances should not increase direct
transaction costs since debt securities are normally traded on a principal basis
without brokerage commissions. However, such transactions do involve a mark-up
or mark-down of the price.

During periods of unusual market conditions when the Manager believes that
investing for defensive purposes is appropriate, or in order to meet anticipated
redemption requests, part or all of the assets of the Portfolio may be invested
in cash or cash equivalents including obligations listed above.

The "Financial Highlights" table shows the Portfolio's portfolio turnover
rates. The portfolio turnover rate of the Portfolio cannot be accurately
predicted. Nevertheless, it is anticipated that the Equity Portfolio will have
an annual turnover rate (excluding turnover of securities having a maturity of
one year or less) of less than 100%. A 100 percent annual turnover rate would
occur, for example, if all the securities in the Portfolio's investment
portfolio were replaced once in a period of one year.

RISK ASPECTS OF THE PORTFOLIO

ADDITIONAL RISKS OF FOREIGN SECURITIES: The Equity Portfolio may purchase
foreign securities that are listed on a domestic or foreign securities exchange,
traded in domestic or foreign over-the counter markets or represented by
American Depository Receipts. There is no limit to the amount of such foreign
securities the Portfolios may acquire. Certain factors and risks are presented
by investment in foreign securities which are in addition to the usual risks
inherent in domestic securities. Foreign companies are not necessarily subject
to uniform accounting, auditing and financial reporting standards or other
regulatory requirements comparable to those applicable to U.S. companies. Thus,
there may be less available information concerning non-U.S. issuers of
securities held by the Portfolio than is available concerning U.S. companies.
In addition, with respect to some foreign countries, there is the possibility of
nationalization, expropriation or confiscatory taxation; income earned in the
foreign nation being subject to taxation, including withholding taxes on
interest and dividends, or other taxes imposed with respect to investments in
the foreign nation; limitations on the removal of securities, property or other
assets of a fund; difficulties in pursuing legal remedies and obtaining
judgments in foreign courts, or political or social instability or diplomatic
developments which could affect U.S. investments in those countries. For a
description of the risks of possible losses through holding of securities in
foreign custodian banks and depositories, see "Investment of Assets" in the
Additional Statement.

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supervision and regulation than in the U.S. and commissions on foreign stock
exchanges are generally higher than negotiated commissions on U.S. transactions.
In addition, there may in certain instances be delays in the settlement of non-
U.S. stock exchange transactions. Certain countries restrict foreign
investments in their securities markets. These restrictions may limit or
preclude investment in certain countries, industries or market sectors, or may
increase the cost of investing in securities of particular companies.
Purchasing the shares of investment companies which invest in securities of a
given country may be the only or the most efficient way to invest in that
country. This may require the payment of a premium above the net asset value of
such investment companies and the return will be reduced by the operating
expenses of those investment companies.

A decline in the value of the U.S. dollar against the value of any
particular currency will cause an increase in the U.S. dollar value of a
Portfolio's holdings denominated in such currency. Conversely, a decline in the
value of any particular currency against the U.S. dollar will cause a decline in
the U.S. dollar value of the Portfolio's holdings of securities denominated in
such currency. Some foreign currency values may be volatile and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets which could adversely affect the Portfolio.
The Portfolio does not intend to speculate in foreign currency in connection
with the purchase or sale of securities on a foreign securities exchange but may
enter into foreign currency contracts to hedge their foreign currency exposure.
While those transactions may minimize the impact of currency appreciation and
depreciation, the Portfolio will bear a cost for entering into the transaction
and such transactions do not protect against a decline in the security's value
relative to other securities denominated in that currency.

EMERGING MARKET COUNTRIES: Certain developing countries may have relatively
unstable governments, economies based on only a few industries that are
dependent upon international trade and reduced secondary market liquidity.
Foreign investment in certain emerging market countries is restricted or
controlled in varying degrees. In the past, securities in these countries have
experienced greater price movement, both positive and negative, than securities
of companies located in developed countries. Lower-rated high-yielding emerging
market securities may be considered to have speculative elements.

HIGH YIELD SECURITIES: It is the present intention of the Manager with
respect to the Equity Portfolio to invest no more than 5 percent of its net
assets in bonds rated below Baa3 by Moody's or BBB- by S&P (commonly known as
"junk bonds"). In the event that the Manager intends in the future to invest
more than 5 percent of the net assets of the Portfolio in junk bonds,
appropriate disclosures will be made to existing and prospective shareholders.
For information about the possible risks of investing in junk bonds see
"Investment of Assets" in the Additional Statement.

OPTIONS AND FUTURES: To the extent permitted by applicable state law, the
Equity Portfolio may engage in futures contracts and options on futures
contracts for bona fide hedging or other non-speculative purposes. The Equity
Portfolio may write covered call options on individual securities. The
Portfolio will not enter into any leveraged futures transactions. Different
uses of futures and options have different risk and return characteristics.
Generally, selling futures contracts, purchasing put options and writing call
options are strategies designed to protect against falling security prices and
can limit potential gains if prices rise. Purchasing futures contracts,
purchasing call options and writing put options are strategies whose returns
tend to rise and fall together with securities prices and can cause losses if
prices fall. If securities prices remain unchanged over time, option writing
strategies tend to be profitable while option buying strategies tend to be
unprofitable. For more information about Options and Futures see "Investment
Techniques" in this Prospectus and "Investment of Assets" in the Additional
Statement.

INVESTMENT TECHNIQUES

The investment techniques or instruments described below are used for the
Portfolio's investment programs:

SHORT-TERM INVESTMENTS. The Portfolio typically invests a part of its
assets in various types of U.S. Government securities and high quality, short-
term debt securities with remaining maturities of one year or less

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<PAGE>
("money market instruments"). This type of short-term investment is made to
provide liquidity for the purchase of new investments and to effect redemptions
of shares. The money market instruments in which the Portfolio may invest
include government obligations, certificates of deposit, bankers' acceptances,
commercial paper, short-term corporate securities and repurchase agreements.

REPURCHASE AGREEMENTS. The Portfolio may acquire securities subject to
repurchase agreements. Under a typical repurchase agreement, a Portfolio would
acquire a debt security for a relatively short period (usually for one day and
not for more than one week) subject to an obligation of the seller to repurchase
and of the Portfolio to resell the debt security at an agreed-upon higher price,
thereby establishing a fixed investment return during the Portfolio's holding
period. The Portfolio will enter into repurchase agreements with member banks
of the Federal Reserve System having total assets in excess of $500 million and
with dealers registered with the SEC. Under each repurchase agreement the
selling institution will be required to maintain as collateral securities whose
market value is at least equal to the repurchase price. Repurchase agreements
could involve certain risks in the event of default or insolvency of the selling
institution, including costs of disposing of securities held as collateral and
any loss resulting from delays or restrictions upon the Portfolio's ability to
dispose of securities. Pursuant to guidelines established by the Portfolio's
Board of Trustees, the Manager considers the creditworthiness of those banks and
non-bank dealers with which the Portfolio enters into repurchase agreements and
monitors on an ongoing basis the value of securities held as collateral to
ensure that such value is maintained at the required level. The Portfolio will
not enter into a repurchase agreement with a dealer if the agreement has a
maturity beyond seven days. The staff of the SEC has taken the position that
repurchase agreements are loans collateralized by the underlying securities.

LOANS OF PORTFOLIO SECURITIES. The Portfolio may lend its portfolio
securities if such loans are secured continuously by collateral (cash, U.S.
Government or agency obligations or letters of credit) maintained on a daily
basis in an amount at least equal at all times to the market value of the
securities loaned and if the Portfolio does not incur any fees (other than the
transaction fees of its custodian bank) in connection with such loans. The
Portfolio may call the loan at any time on five days' notice and reacquire the
loaned securities. During the loan period, the Portfolio would continue to
receive the equivalent of the interest paid by the issuer on the securities
loaned and would also have the right to receive the interest on investment of
the cash collateral in short-term debt instruments. A portion of either or both
kinds of such interest may be paid to the borrower of such securities. It is
not intended that the value of the securities loaned, if any, would exceed 10
percent of the value of the total assets of the Equity Portfolio. Securities
loans must also meet applicable tests under the Internal Revenue Code. The
Portfolio could experience various costs or loss if a borrower defaults on its
obligation to return the borrowed securities.

OPTIONS AND FUTURES. To the extent permitted by applicable state law, the
Equity Portfolio may engage in options and futures transactions. The Equity
Portfolio may engage in futures contracts or options on futures contracts for
bona fide hedging or other non-speculative purposes and to write calls on
individual securities. The Equity Portfolio may also enter into forward foreign
currency contracts to purchase or sell foreign currencies in connection with any
transactions in foreign securities. When the Portfolio anticipates a significant
market or market sector advance, the purchase of a futures contract affords a
hedge against not participating in the advance at a time when the Portfolio is
not fully invested ("anticipatory hedge"). Such a purchase of a futures
contract would serve as a temporary substitute for the purchase of individual
securities, which then may be purchased in an orderly fashion once the market
has stabilized. As individual securities are purchased, an equivalent amount of
futures contracts could be terminated by offsetting sales. The Portfolio may
sell futures contracts in anticipation of or in a general market or market
sector decline that may adversely affect the market value of the Portfolio's
securities ("defensive hedge"). To the extent that the Portfolio's securities
change in value in correlation with the underlying security or index, the sale
of futures contracts would substantially reduce the risk to the Portfolio of a
market decline and by so doing, provide an alternative to the liquidation of
securities positions in the Portfolios with attendant transaction costs. So
long as the Commodities Futures Trading Commission rules so require, the
Portfolio will not enter into any financial futures or options contract unless
such transactions are for bona fide hedging purposes, or for other purposes only
if the aggregate initial margins and premiums required to establish such non-
hedging positions would not exceed 5 percent of the liquidation value of the
Portfolio's assets. When writing put options, the Fund, on behalf of the
Portfolio, will maintain in a segregated account at its Custodian liquid assets
with a value equal to at least the exercise price of the option to secure its
obligation to pay for the
10
<PAGE>

underlying security. As a result, the Portfolio forgoes the opportunity of
trading the segregated assets or writing calls against those assets. There may
not be a complete correlation between the price of options and futures and the
market prices of the underlying securities. The Portfolio may lose the ability
to profit from an increase in the market value of the underlying security or may
lose its premium payment. If due to a lack of a market the Portfolio could not
effect a closing purchase transaction with respect to an OTC option, it would
have to hold the callable securities until the call lapsed or was exercised.

PORTFOLIO TRANSACTIONS. The Manager's primary consideration when executing
security transactions with broker-dealers is to obtain, and maintain the
availability of, execution at the most favorable prices and in the most
effective manner possible. The Manager may select CIBC Oppenheimer Corp. ("CIBC
Oppenheimer"), a former affiliate of the Manager, to execute transactions for
the Portfolio. Selection of broker-dealers to execute portfolio transactions
must be done in a manner consistent with the foregoing primary consideration,
the "Rules of Fair Practice" of the National Association of Securities Dealers,
Inc. and such other policies as the Board of Trustees may determine. (For a
further discussion of portfolio trading, see the Additional Statement,
"Investment Management and Other Services.")

INVESTMENT RESTRICTIONS

The Portfolio is subject to certain investment restrictions which, together
with its investment objective, are fundamental policies changeable only by
shareholder vote. (The restrictions in 1, 2 and 3 do not apply to U.S.
Government securities.) Under some of those restrictions, the Portfolio may
not:

1. Invest more than 5 percent of the value of its total assets in the
securities of any one issuer, or purchase more than 10 percent of the voting
securities, or more than 10 percent of any class of security, of any issuer (for
this purpose all outstanding debt securities of an issuer are considered as one
class and all preferred stock of an issuer are considered as one class).

2. Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, a Portfolio may invest up to
25 percent of its total assets (valued at the time of investment) in any one
industry classification used by that Portfolio for investment purposes.

3. Invest more than 5 percent of the value of its total assets in
securities of issuers having a record, together with predecessors, of less than
three years of continuous operation.

4. Make loans, except through the purchase of U.S. Government securities
and corporate debt obligations, repurchase agreements or lending portfolio
securities as described above under "Loans of Portfolio Securities".

5. Borrow money in excess of 10 percent of the value of its total assets.
It may borrow only as a temporary measure for extraordinary or emergency
purposes and will make no additional investments while such borrowings exceed 5
percent of the total assets. Such prohibition against borrowing does not
prohibit escrow or other collateral or margin arrangements in connection with
the hedging instruments which a Portfolio is permitted to use by any of its
other fundamental policies.

6. Invest more than 15 percent of its assets in illiquid securities
(securities for which market quotations are not readily available) and
repurchase agreements which have a maturity of longer than seven days. Other
investment restrictions are described in the Additional Statement.

All percentage limitations apply immediately after a purchase or initial
investment and any subsequent change in any applicable percentage resulting from
market fluctuations or other changes in the amount of total assets does not
require elimination of any security from the Portfolio.

11
<PAGE>

MANAGEMENT OF THE FUND

The Fund's Board of Trustees has overall responsibility for the management
of the Fund under the laws of Massachusetts governing the responsibilities of
trustees of a Massachusetts business trust. In general, such responsibilities
are comparable to those of directors of a Massachusetts business corporation.
The Board of Trustees of the Fund has undertaken to monitor the Fund for the
existence of any material irreconcilable conflict between the interests of
variable annuity Contractowners, variable life insurance Contractowners and
Qualified Plans due to the difference of tax treatment and other considerations,
and shall report any such conflict to the boards of the respective life
insurance companies which use the Fund as an investment vehicle for their
respective variable annuity and life insurance contracts and to the Qualified
Plans. The Boards of Directors of those life insurance companies and the
Manager have agreed to be responsible for reporting any potential or existing
conflicts to the Trustees of the Fund. If a material irreconcilable conflict
exists that affects those life insurance companies, those life insurance
companies have agreed, at their own cost, to remedy such conflict up to and
including establishing a new registered management investment company and
segregating the assets underlying the variable annuity contracts and the
variable life insurance contracts. Qualified Plans which acquire more than 10
percent of the assets of the Fund will be required to report any potential or
existing conflicts to the Trustees of the Fund, and if a material irreconcilable
conflict exists, to remedy such conflict, up to and including redeeming Shares
of the Portfolios held by the Qualified Plans. The Additional Statement
contains information about the Trustees and Officers.

THE ADVISORY AGREEMENT. The Manager is responsible for management of the
Fund's business. Pursuant to the investment advisory agreement (the "Advisory
Agreement") with the Fund, and subject to the authority of the Board of
Trustees, the Manager supervises the investment operations of the Portfolio,
furnishes advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities and provides certain
administrative services for the Fund.

Under the Advisory Agreement, each Portfolio is responsible for bearing
organizational expenses, taxes and governmental fees; brokerage commissions,
interest and other expenses incurred in acquiring and disposing of portfolio
securities; trustees fees, out of pocket travel expenses and other expenses for
trustees who are not interested persons; legal, accounting and audit expenses;
custodian, dividend disbursing and transfer agent fees; and other expenses not
expressly assumed by the Manager under the Advisory Agreement, which is
discussed below. The Manager will reimburse the Fund such that the total
operating expenses (net of any expense offsets) of the Equity Portfolio do not
exceed 1.00% of its average daily net assets.

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<PAGE>

owned subsidiary of Pacific Life Insurance Company ("Pacific Life"). The
managing general partner of PIMCO GP is PIMCO Partners L.L.C. ("PPLLC"), a
California limited liability company. PPLLC's members are the Managing
Directors (the "PIMCO Managers") of Pacific Investment Management Company, a
subsidiary of PIMCO Advisors (the "PIMCO Subpartnership"). The PIMCO Managers
are: William H. Gross, Dean S. Meiling, James F. Muzzy, William F. Podlich,
III, Brent R. Harris, John L. Hague, William S. Thompson Jr., William S. Powers,
David H. Edington, Benjamin Trosky, William R. Benz, II and Lee R. Thomas, III.
PIMCO Advisors is governed by a Management Board, which consists of sixteen
members, pursuant to a delegation by its general partners. PIMCO GP has the
power to designate up to nine members of the Management Board and the PIMCO
Subpartnership, of which the PIMCO Managers are the Managing Directors, has the
power to designate up to two members. In addition, PIMCO GP, as the controlling
general partner of PIMCO Advisors, has the power to revoke the delegation to the
Management Board and exercise control of PIMCO Advisors. As a result, Pacific
Life and/or the PIMCO Managers may be deemed to control PIMCO Advisors. Pacific
Life and the PIMCO Managers disclaim such control. Because of direct or
indirect power to appoint 25% of the members of the Equity Board, (i) Pacific
Life and (ii) the PIMCO Managers and/or the PIMCO Subpartnership may each be
deemed, under applicable provisions of the Investment Company Act, to control
PIMCO Advisors. Pacific Life, the PIMCO Subpartnership and the PIMCO Managers
disclaim such control. The Additional Statement contains more information about
the Advisory Agreement, including a more complete description of the management
fee and expense arrangements, exculpation provisions and portfolio transactions
for the Fund.

DETERMINATION OF NET ASSET VALUE

The net asset value per share is calculated separately for each Portfolio.
The net asset value of the Portfolio is determined at the close of the regular
trading session ("Close") of the NYSE (currently 4:00 p.m. Eastern Time) each
day the NYSE is open and on each other day on which there is a sufficient degree
of trading in any Portfolio's securities affecting materially the value of such
securities (if the Fund receives a request to redeem its shares that day), by
dividing the value of the Portfolio's net assets by the number of shares
outstanding. The Fund's Board of Trustees has established procedures to value
the Portfolio's securities to determine net asset value; in general, those
valuations are based on market value, with special provisions for (i) securities
(including restricted securities) not having readily-available market quotations
and (ii) short-term debt securities. Securities listed on a national securities
exchange or designated as national market system securities are valued at the
last sale price or, if there has been no sale that day or on the previous day on
which the exchange was open (if a week has not elapsed between such days), at
the last bid price. Debt and equity securities actively traded in the
over-the-counter market but not designated as national market system securities
are valued at the most recent bid price. Valuations may be provided by a
pricing service or from independent securities dealers. Short-term investments
with remaining maturities of less than 60 days are valued at amortized cost so
long as the Fund's Board of Trustees determines in good faith that such method
reflects fair value. Other securities are valued by methods that the Fund's
Board of Trustees believes accurately reflect fair value.

PURCHASE OF SHARES

Investments in the Fund may be made only by Variable Accounts and
Qualified Plans. Persons desiring to purchase Contracts funded by the Portfolio
should read this Prospectus in conjunction with the Prospectus of the Variable
Accounts.

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<PAGE>

Shares of the Portfolio are offered to the Variable Accounts and Qualified
Plans without sales charge at the respective net asset values of the Portfolio
next determined after receipt by the Fund of the purchase payment in the manner
set forth above under "Determination of Net Asset Value." Certificates
representing shares of the Fund will not be physically issued. OCC Distributors
acts without remuneration from the Fund as the exclusive Distributor of the
Fund's shares. The principal executive office of the Distributor is located at
Two World Financial Center, New York, New York l0080.

REDEMPTION OF SHARES

Shares of the Portfolio can be redeemed by the Variable Accounts and
Qualified Plans at any time for cash, at the net asset value next determined
after receipt of the redemption request in proper form. The market value of the
securities in the Portfolio is subject to daily fluctuation and the net asset
value of the Portfolio's shares are expected to fluctuate accordingly. The
redemption value of the Fund's shares may be either more or less than the
original cost to the Variable Accounts. Payment for redeemed shares is
ordinarily made within seven days after receipt by the Fund's transfer agent of
redemption instructions in proper form. The redemption privilege may be
suspended and payment postponed during any period when: (l) the NYSE is closed
other than for customary weekend or holiday closings or trading thereon is
restricted as determined by the SEC; (2) an emergency, as defined by the SEC
exists making trading of portfolio securities or valuation of net assets not
reasonably practicable; (3) the SEC has by order permitted such suspension.

STATE LAW RESTRICTIONS

The investments of the Variable Accounts are subject to the provisions of
the insurance laws of the States of domicile of the life insurance companies
offering the Contracts. The Fund and its Portfolios will voluntarily comply with
the statutory investment restrictions applicable to the investments of life
insurance company separate accounts, of the States of domicile of the life
insurance companies offering the Contracts, even though these state law
investment restrictions do not apply to the Fund and its Portfolios. For a
description of the state law restrictions applicable to the separate accounts of
the life insurance companies offering the Contracts, see the Prospectus for the
Variable Accounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The Portfolio intends to distribute substantially all of its net investment
income and any net realized capital gains. Dividends from net investment income
and any distributions of realized capital gains will be paid in additional
shares of the Portfolio paying the dividend or making the distribution and
credited to the shareholder's account unless the shareholder elects to receive
such dividends or distributions in cash.

EQUITY PORTFOLIO. Dividends from net investment income, if any, on the
Equity Portfolio will be declared and paid at least annually, and any net
realized capital gains, if any, will be declared and paid at least once per
calendar year.

TAXES. Because the Fund intends to distribute all of the net investment
income and capital gains of the Portfolio and otherwise qualify the Portfolio as
a regulated investment company under Subchapter M of the Internal Revenue Code,
it is not expected that the Portfolio will be required to pay any federal income
tax on such income and capital gains. Since the Variable Accounts and the
Qualified Plans are the sole shareholders of the Fund, no discussion is
presented herein as to the federal income tax consequences at the shareholder
level. For information concerning the federal income tax consequences to
contractowners, see the Prospectus for the Variable Accounts.

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<PAGE>

CALCULATION OF PERFORMANCE

From time to time the performance of the Portfolio may be advertised. The
performance data contained in these advertisements is based upon historical
earnings and is not indicative of future performance. The data for the
Portfolio reflects the results of the Portfolio and recurring charges and
deductions borne by or imposed on the Portfolio. As the performance for the
Portfolio does not include charges and deductions under the Contracts,
comparisons with other portfolios used in connection with different variable
accounts may not be useful. Set forth below for the Portfolio is the manner in
which the data contained in such advertisements will be calculated as well as
performance information for the Portfolio as indicated below. This performance
information does not include charges and deductions which are imposed under the
Contracts and described in the Prospectus for the Variable Accounts.

AVERAGE ANNUAL TOTAL RETURN OF EQUITY PORTFOLIO
OF OCC ACCUMULATION TRUST(1,2)

* The Equity Portfolio commenced operations as part of the Fund on
September 16, 1994. The Old Trust commenced operations on August 1, 1988.

For the period prior to September 16, 1994, the performance figures above
for the Equity Portfolio reflect the performance of the corresponding Portfolio
of the Old Trust.

(2) Reflects waivers of all or a portion of the advisory fees and
reimbursement of other expenses by the Manager. Without such waivers and
reimbursements, the average annual total return during the periods would have
been lower.

In addition, reference in advertisements may be made to various indices,
including, without limitation, the S&P 500 Stock Index and various rankings by
independent evaluators such as Morningstar and Lipper Analytical Services, Inc.
in order to provide the reader a basis for comparison.

ADDITIONAL INFORMATION

ORGANIZATION OF THE FUND. The Fund was organized as a Massachusetts
business trust on May 12, 1994 and is registered with the SEC as an open-end
diversified management investment company. When issued, shares are fully paid
and have no preemptive or conversion rights. The shares of beneficial interest
of the Fund, $0.01 par value, are divided into seven separate series. The
shares of each series are freely-transferable and equal as to earnings, assets
and voting privileges with all other shares of that series. There are no
conversion, preemptive or other subscription rights. Upon liquidation of the
Fund or any Portfolio, shareholders of a Portfolio are entitled to share pro
rata in the net assets of that Portfolio available for distribution to
shareholders after all debts and expenses have been paid. The shares do not
have cumulative voting rights.

liabilities are referred to as "series". The creation of additional series
and offering of their shares (the proceeds of which would be invested in
separate, independently managed portfolios with distinct investment
objectives, policies and restrictions) would not affect the interests of the
current shareholders in the existing Portfolios.

The assets received by the Fund on the sale of shares of each Portfolio and
all income, earnings, profits and proceeds thereof, subject only to the rights
of creditors, are allocated to each Portfolio, and constitute the assets of such
Portfolio. The assets of each Portfolio are required to be segregated on the
Fund's books of account. The Fund's Board of Trustees has agreed to monitor the
portfolio transactions and management of each of the Portfolios and to consider
and resolve any conflict that may arise.

VOTING. For matters affecting only one Portfolio, only the shareholders of
that Portfolio are entitled to vote. For matters relating to all the Portfolios
but affecting the Portfolios differently, separate votes by Portfolio are
required. Approval of an Investment Management Agreement and a change in
fundamental policies would be regarded as matters requiring separate voting by
each Portfolio. To the extent required by law, the Variable Accounts will vote
the shares of the Fund, or any Portfolio of the Fund, held in the Variable
Accounts in accordance with instructions from Contractowners, as described under
the caption "Voting Rights" in the accompanying Prospectus for the Variable
Accounts. Shares for which no instructions are received as well as shares which
the Manager or its parent, Oppenheimer Capital, may own, will be voted in the
same proportion as shares for which instructions are received. The Fund does
not intend to hold annual meetings of shareholders. However, the Board of
Trustees will call special meetings of shareholders for action by shareholder
vote as may be requested in writing by holders of 10 percent or more of the
outstanding shares of a Portfolio or as may be required by applicable laws or
the Declaration of Trust pursuant to which the Fund has been organized.

Under Massachusetts law shareholders could, in certain circumstances, be
held personally liable as partners for Fund obligations. The Fund's Declaration
of Trust contains an express disclaimer of shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given in
each instrument entered into or executed by the Fund. The Declaration of Trust
also provides for indemnification out of the Fund's property for any
shareholder held personally liable for any Fund obligation. Thus, the risk of
loss to a shareholder from being held personally liable for obligations of the
Fund is limited to the unlikely circumstance in which the Fund itself would be
unable to meet its obligations.

CUSTODIAN AND TRANSFER AGENT. The custodian of the assets of the Fund is
State Street Bank and Trust Company, P.O. Box 8505, Boston, MA 02266-8505,
which also acts as transfer agent and shareholder servicing agent for the Fund.

CONTRACTOWNERS INQUIRIES. Inquiries concerning the purchase and sale of
shares of the Fund, dividends, account statements and management and investment
policies of the Fund should be directed to the respective life insurance
companies which use the Fund as an investment vehicle for their respective
variable annuity and life insurance contracts.

YEAR 2000 ISSUES. The management services provided to the Fund by the
Manager, and the services provided by the Transfer Agent to shareholders, depend
on the smooth functioning of their computer systems. Many computer software
systems in use today cannot recognize the year 2000, but revert to 1900 or some
other incorrect date, due to the manner in which dates were encoded and
calculated. That failure could have a negative impact on the handling of
securities trades, pricing and account services. Improperly functioning trading
systems may result in settlement problems and liquidity issues. In addition,
corporate and governmental data processing errors may result in production
problems for individual companies and overall economic uncertainties. Earnings
of individual issuers may be affected by remediation costs, which may be
substantial. The Manager and Transfer Agent have been actively working on
necessary changes to their own computer systems to deal with the year 2000 and
expect that their systems will be adapted before that date, but there can be no
assurance that they will be successful or that interaction with other
noncomplying computer systems will not impair their services at that time.

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APPENDIX

DESCRIPTION OF COMMERCIAL PAPER AND CORPORATE BOND RATINGS

COMMERCIAL PAPER RATINGS

Moody's commercial paper ratings are opinions of the ability of issuers to
repay promissory obligations when due. Moody's employs the following three
designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers: Prime 1 - Superior Ability for Repayment;
Prime 2 - Strong Ability for Repayment; Prime 3 - Acceptable Ability for
Repayment.

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment. Ratings are graded into four categories, ranging from "A" for
the highest quality obligations to "D" for the lowest. Issues assigned the
highest rating, "A", are regarded as having the greatest capacity for timely
payment. Issues in this category are delineated with the numbers "1", "2", and
"3" to indicate the relative degree of safety. The designation "A-1" indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong. The "A+" designation is applied to those issues rated "A-1" which
possess overwhelming safety characteristics. Capacity for timely payment on
issues with the designation "A-2" is strong. However, the relative degree of
safety is not as high as for issues designated "A-1."

Fitch's commercial paper ratings represent Fitch's assessment of the
issuer's ability to meet its obligations in a timely manner. The assessment
places emphasis on the existence of liquidity. Ratings range from "F-1+" which
represents exceptionally strong credit quality to "F-4" which represents weak
credit quality.

Duff's short-term ratings apply to all obligations with maturities of under
one year, including commercial paper, the uninsured portion of certificates of
deposit, unsecured bank loans, master notes, bankers acceptances, irrevocable
letters of credit and current maturities of long-term debt. Emphasis is placed
on liquidity. Ratings range for Duff 1+ for the highest quality to Duff 5 for
the lowest, issuers in default. Issues rated Duff 1+ are regarded as having the
highest certainty of timely payment. Issues rated Duff 1 are regarded as having
very high certainty of timely payment.

Thomson's BankWatch, Inc. assigns only one Issuer Rating to each company,
based upon a qualitative and quantitative analysis of the consolidated
financials of an issuer and its subsidiaries. The rating incorporates TBW's
opinion of the vulnerability of the company to adverse developments which may
impact the marketability of its securities, as well as the issuer's ability to
repay principal and interest. Ratings range from "TBW-1" for highest quality to
"TBW-3" for the lowest, companies with very serious problems.

BOND RATINGS

A bond rated "Aaa" by Moody's is judged to be the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is deemed secure.
While the various protective elements may change, such foreseeable changes are
unlikely to impair the fundamentally strong position of such issues. Bonds
which are rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as high
grade bonds. Margins of protection on "Aa" bonds may not be as large as on
"Aaa" securities or fluctuations of protective elements may be of greater
magnitude or there may be other elements present which make the long-term risks
appear somewhat larger than "Aaa" securities. Bonds which are rated "A" possess
many favorable investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a susceptibility
to impairment some time in the future. Bonds rated "Baa" are considered medium
grade obligations whose interest payments and principal security appear adequate
for the present but may lack certain protective elements or may be
characteristically unreliable over any great length of time. Moody's applies
numerical modifiers "1", "2" and "3" in each generic rating classification from
"Aa" through "B" in its corporate bond rating system. The modifier "1"
indicates that the security ranks in the higher end of its generic rating
category; the modifier "2" indicates a mid-

17
<PAGE>

range ranking; and the modifier "3" indicates that the issue ranks in the lower
end of its generic rating category. Bonds rated "Ba" are judged to have
speculative elements and bonds rated below "Ba" are speculative to a higher
degree.

Debt rated "AAA" by S&P has the highest rating assigned by it. Capacity to
pay interest and repay principal is extremely strong. Debt rated "AA" has a
strong capacity to pay interest and repay principal and differs from "AAA"
issues only in small degree. Debt rated "A" has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories. Debt
rated "BB" and below is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
Plus (+) and minus (-) signs are used with a rating symbol to indicate the
relative position within the category.

Debt rated "AAA", the highest rating by Fitch, is considered to be 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. Debt rated "AA" is regarded as very high credit quality.
The obligor's ability to pay interest and repay principal is very strong. Debt
rated "A" is of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than debt with higher
ratings. Debt rated "BBB" is of satisfactory credit quality. The obligor's
ability to pay interest and repay principal is adequate, however a change in
economic conditions may adversely affect timely payment. Plus (+) and minus (-)
signs are used with a rating symbol (except "AAA") to indicate the relative
position within the category.

Debt rated "AAA", the highest rating by Duff is considered to be of the
highest credit quality. The risk factors are negligible being only slightly
more than for risk-free U.S. Treasury debt. Debt rated "AA" is regarded as high
credit quality. Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. Debt rated "A" is
considered to have average but adequate protection factors. Bonds rated "BBB"
are considered to have below average protection factors but still sufficient for
prudent investment. Bonds rated "BB" and below are below investment grade and
possess fluctuating protection factors and risk. Plus (+) and minus (-) signs
are used with a rating symbol to indicate the relative position within the
category.

18
<PAGE>

OCC ACCUMULATION TRUST
One World Financial Center, New York, New York 10281

OCC ACCUMULATION TRUST (formerly known as Quest for Value Accumulation Trust,
the "Fund") is a registered open-end diversified management investment company
offering several investment alternatives. It permits an investor the
flexibility of choosing among different investment objectives, through the
following three Portfolios (the "Portfolios"), each of which is a separate
series of shares of beneficial interest of the Fund ("Shares"). The investment
objective of each Portfolio is as follows:

EQUITY PORTFOLIO: Long term capital appreciation through investment in a
diversified portfolio of equity securities selected on the basis of a value
oriented approach to investing.

SMALL CAP PORTFOLIO: Capital appreciation through investment in a diversified
portfolio of equity securities of companies with market capitalizations of under
$1 billion.

The Fund is an investment vehicle for variable annuity and variable life
insurance contracts of various life insurance companies, and qualified pension
and retirement plans ("Qualified Plans"). Shares of the Fund are currently sold
to variable accounts of various life insurance companies for the purpose of
funding variable annuity and variable life insurance contracts (the
"Contracts"). These variable accounts (the "Variable Accounts") invest in
Shares of the Fund in accordance with allocation instructions received from
owners (the "Contractowners") of the Contracts. Allocation rights are further
described in the accompanying prospectus for the Variable Accounts. The
Variable Accounts will redeem Shares to the extent necessary to provide benefits
under the Contracts.

It is possible, although not presently anticipated, that a material
conflict could arise between and among the various variable accounts which
invest in Shares of the Fund and the Qualified Plans, which may, in the future
invest in Shares of the Fund. Such conflict could cause the liquidation of
assets of one or more of the Fund Portfolios to raise cash at times not
otherwise deemed advantageous by the Fund Manager. See "Management of the
Fund," page 16.

OPCAP ADVISORS
Investment Manager
Prospectus dated May 1, 1998

<PAGE>

TABLE OF CONTENTS

Page
----
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . .9

Equity Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Small Cap Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Managed Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Additional Information on Investment Objectives and Policies . . . . . . . . 10

Investment Techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . 17

Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

State Law Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . 18

Calculation of Performance . . . . . . . . . . . . . . . . . . . . . . . . . 19

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

2
<PAGE>

PROSPECTUS SUMMARY

THE FUND The Fund is a Massachusetts business trust which issues
its shares in series as separate classes of shares of
beneficial interest. There are currently three series
available for investment through the Variable Accounts,
each of which is designated as a "Portfolio".
Together, the three Portfolios are designed to enable
investors to choose a number of investment alternatives
to achieve their financial goals and to shift assets
conveniently among Portfolios when and if their
investment aims or perception of the marketplace
change.

The Fund commenced operations on September 16, 1994
when an investment company then called Quest for Value
Accumulation Trust, with portfolios corresponding to
the three available portfolios of the Fund, was
effectively divided into two investment funds, the
original investment company, whose name was changed,
and the Fund.

INVESTMENT OBJECTIVES
AND RESTRICTIONS The investment objective of each of the Portfolios is
set forth on the cover page of this Prospectus. These
objectives are described in more detail under the
heading "Investment Objectives and Policies." Although
each Portfolio will be actively managed by experienced
professionals, there can be no assurance that the
objectives will be achieved.

The value of the portfolio securities of each Portfolio
and therefore the Portfolio's net asset value per share
are expected to increase or decrease because of varying
factors. There are generally two types of risk
associated with an investment in one or more of the
Portfolios; market (or interest rate) risk and
financial (or credit) risk. Market risk for equities
is the risk associated with movement of the stock
market in general.

Market risk for fixed income securities is the risk
that interest rates will change, thereby affecting
their value. Generally, the value of fixed income
securities declines as interest rates rise, and
conversely, their value rises as interest rates
decline. The second type of risk, financial or credit
risk, is associated with the financial condition and
profitability of an individual equity or fixed income
issuer. The financial risk in owning equities is
related to earnings stability and overall financial
soundness of individual issuers and of issuers
collectively which are part of a particular industry.
For fixed income securities, credit risk relates to the
financial ability of an issuer to make periodic
interest payments and ultimately repay the principal at
maturity. (See "Additional Information on Investment
Objectives and Policies" for risk aspects of the
individual Portfolios).

INVESTMENT MANAGER OpCap Advisors (the "Manager"), the investment manager
of each of the Portfolios, is investment manager and
sub-adviser to several other registered investment
companies with assets under management of approximately
$18.3 billion at March 31, 1998 and is a subsidiary of
Oppenheimer Capital, a registered investment adviser,
which had assets under management, including those of
OpCap Advisors, of approximately $67.6 billion at March
31, 1998.

MANAGEMENT FEE The Manager receives a monthly fee from each Portfolio
at varying annual percentage rates of average daily net
assets, as follows: .80 percent on the first $400
million, .75 percent on the next $400 million and .70
percent thereafter of

3
<PAGE>

the average daily net assets for the Equity, Small Cap
and Managed Portfolios (see page 16).

PURCHASES AND
REDEMPTION OF SHARES Currently, shares of the Fund are sold at their net
asset value per share, without sales charge, for
allocation to the Variable Accounts as the underlying
investment for the Contracts. Accordingly, the
interest of the Contractowner with respect to the Fund
is subject to the terms of the Contract as described in
the accompanying Prospectus for the Variable Accounts,
which should be reviewed carefully by a person
considering the purchase of a Contract. That
Prospectus describes the relationship between increases
or decreases in the net asset value of Fund shares and
any distributions on such shares, and the benefits
provided under a Contract. The rights of the Variable
Accounts as shareholders of the Fund should be
distinguished from the rights of a Contractowner which
are described in the Contract. As long as shares of
the Fund are sold for allocation to the Variable
Accounts, the terms "shareholder" or "shareholders" in
this Prospectus shall refer to the Variable Accounts.
Shares are redeemed at their respective net asset
values as next determined after receipt of proper
notice of redemption.

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus, the Additional Statement, and the accompanying
Prospectus for the Variable Accounts.

4
<PAGE>

OCC ACCUMULATION TRUST

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1997, 1996 and 1995,
and for the period from September 16, 1994 through December 31, 1994 for the
Equity, Managed and Small Cap Portfolios have been audited by Price Waterhouse
LLP, independent accountants, whose unqualified report thereon appears in the
Additional Statement (Part B). This information should be read in conjunction
with the financial statements and related notes thereto included in the
Additional Statement. Total return information for the Portfolios of the Fund
provided in the Financial Highlights does not include charges and deductions
which are imposed under the Contracts and described in the Prospectus for the
Variable Accounts. Inclusion of these charges and deductions would reduce the
total return of the Portfolios of the Fund. Further information about the
performance of each Portfolio is available in the Fund's Annual Report or semi-
annual report. Annual reports or semi-annual reports can be obtained without
charge upon written requests to the insurance companies issuing the Contracts.

5
<PAGE>
OCC ACCUMULATION TRUST
EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
------------- ----------- ---------- --------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $30.07 $25.05 $18.12 $18.57
----------- ----------- ---------- ----------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.39 0.21 0.31 0.09
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . 7.34 5.52 6.71 (0.54)
----------- ----------- ---------- ----------
Total income from investment operations. . . . . . . . . . 7.73 5.73 7.02 (0.45)
----------- ----------- ---------- ----------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income . . . . . . . . . . . . . . . . . . (0.28) (0.24) (0.09) -
Distributions to shareholders from
net realized gains. . . . . . . . . . . . . . . . . . . . (1.00) (0.47) - -
----------- ----------- ---------- ----------
Total dividends and distributions to shareholders. . . . . (1.28) (0.71) (0.09) -
----------- ----------- ---------- ----------
Net asset value, end of period . . . . . . . . . . . . . . . $36.52 $30.07 $25.05 $18.12
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Total return (2) . . . . . . . . . . . . . . . . . . . . . . 26.6% 23.4% 38.9% (2.4%)
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Net assets, end of period. . . . . . . . . . . . . . . . . . $28,819,978 $19,842,998 $9,035,982 $4,281,256
----------- ----------- ---------- ----------
Ratio of net operating expenses
to average net assets (5). . . . . . . . . . . . . . . . 0.99%(4) 0.93%(6) 0.72%(6) 0.72%(3,6)
----------- ----------- ---------- ----------
Ratio of net investment income
to average net assets. . . . . . . . . . . . . . . . . . 1.25%(4) 1.29%(6) 1.74%(6) 1.80%(3,6)
----------- ----------- ---------- ----------
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 32% 36% 31% 6%
----------- ----------- ---------- ----------
Average commission rate. . . . . . . . . . . . . . . . . . . $0.0557 $0.0588 -- --
----------- ----------- ---------- ----------

- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $24,986,972.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net
operating expenses to average net assets and the ratios of net investment
income to average net assets would have been 1.05% and 1.15%,
respectively, for the year ended December 31, 1996, 1.26% and 1.20%,
respectively, for the year ended December 31, 1995 and 2.09% and 0.43%,
annualized, respectively, for the period September 16, 1994 (commencement
of operations) to December 31, 1994.

6
<PAGE>

OCC ACCUMULATION TRUST
EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
------------- ----------- ---------- --------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $36.21 $30.14 $20.83 $21.80
----------- ----------- ---------- ----------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.34 0.43 0.42 0.14
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . 7.45 6.31 9.02 (1.11)
----------- ----------- ---------- ----------
Total income from investment operations. . . . . . . . . . 7.79 6.74 9.44 (0.97)
----------- ----------- ---------- ----------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income. . . . . . . . . . . . . . . . . . . (0.40) (0.41) (0.13) -
Distributions to shareholders from
net realized gains . . . . . . . . . . . . . . . . . . . . (1.22) (0.26) - -
----------- ----------- ---------- ----------
Total dividends and distributions to shareholders. . . . . . (1.62) (0.67) (0.13) -
----------- ----------- ---------- ----------
Net asset value, end of period . . . . . . . . . . . . . . . $42.38 $36.21 $30.14 $20.83
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Total return (2) . . . . . . . . . . . . . . . . . . . . . . 22.3% 22.8% 45.6% (4.4%)
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Net assets, end of period. . . . . . . . . . . . . . . . . . $466,791,224 $180,728,094 $99,188,147 $54,943,371
----------- ----------- ---------- ----------
Ratio of net operating expenses
to average net assets (5) . . . . . . . . . . . . . . . . 0.87%(4) 0.84%(6) 0.66%(6) 0.66%(3,6)
----------- ----------- ---------- ----------
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . . 1.42%(4) 1.66%(6) 1.85%(6) 2.34%(3,6)
----------- ----------- ---------- ----------
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 32% 27% 22% 8%
----------- ----------- ---------- ----------
Average commission rate. . . . . . . . . . . . . . . . . . . $0.0571 $0.0592 - -
----------- ----------- ---------- ----------

- -----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $290,421,930.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

7
<PAGE>

OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

Year ended December 31,
------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
------------- ----------- ---------- --------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $22.61 $19.91 $17.38 $17.49
----------- ----------- ---------- ----------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.08 0.14 0.26 0.06
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . 4.73 3.45 2.37 (0.17)
----------- ----------- ---------- ----------
Total income from investment operations. . . . . . . . . . 4.81 3.59 2.63 (0.11)
----------- ----------- ---------- ----------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income. . . . . . . . . . . . . . . . . . . (0.13) (0.25) (0.05) ---
Distributions to shareholders from
net realized gains. . . . . . . . . . . . . . . . . . . . (0.92) (0.64) (0.05) ---
----------- ----------- ---------- ----------
Total dividends and distributions to shareholders. . . . . (1.05) (0.89) (0.10) ---
----------- ----------- ---------- ----------
Net asset value, end of period . . . . . . . . . . . . . . . $26.37 $22.61 $19.91 $17.38
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Total return (2) . . . . . . . . . . . . . . . . . . . . . . 22.2% 18.7% 15.2% (0.6%)
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Net assets, end of period. . . . . . . . . . . . . . . . . . $110,564,506 $34,256,671 $16,004,392 $9,210,443
----------- ----------- ---------- ----------
Ratio of net operating expenses
to average net assets (5) . . . . . . . . . . . . . . . . 0.97%(4) 0.93%(6) 0.74%(6) 0.74%(3,6)
----------- ----------- ---------- ----------
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . . . 0.64%(4) 1.03%(6) 1.75%(6) 1.22%(3,6)
----------- ----------- ---------- ----------
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 68% 50% 69% 32%
----------- ----------- ---------- ----------
Average commission rate. . . . . . . . . . . . . . . . . . . $0.0549 $0.0493 -- --
----------- ----------- ---------- ----------
- --------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $62,297,759.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 1.01% and 0.92%, respectively, for the
year ended December 31, 1996, 0.99% and 1.50%, respectively, for the year
ended December 31, 1995 and 1.64% and 0.32%, annualized, respectively, for
the period September 16, 1994 (commencement of operations) to December 31,
1994.

8
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each Portfolio of the Fund are
described below. Investment objectives of each Portfolio are fundamental
policies which cannot be changed for any Portfolio without a majority vote of
the shareholders of that Portfolio; investment policies are not fundamental and
may be adjusted by the Manager at any time, usually in response to its
perception of developments in the securities markets. The extent to which a
Portfolio will be able to achieve its distinct investment objectives depends
upon the Manager's ability to evaluate and develop the information it receives
into a successful investment program. Although each Portfolio will be managed
by experienced professionals, there can be no assurance that any Portfolio will
achieve its investment objectives. The values of the securities held in each
Portfolio will fluctuate and the net asset value per share at the time shares
are redeemed may be more or less than the net asset value per share at the time
of purchase. Investors should also refer to "Investment Techniques" for
additional information concerning the investment techniques employed for some or
all of the Portfolios.

INVESTMENT OBJECTIVES OF THE FUND PORTFOLIOS

EQUITY PORTFOLIO

SMALL CAP PORTFOLIO

represented by American depository receipts listed on a domestic securities
exchange or traded in domestic or foreign over-the-counter markets. The Small
Cap Portfolio is managed by Timothy McCormack, Senior Vice President of
Oppenheimer Capital and Timothy Curro and Gavin Albert, both of whom are Vice
Presidents of Oppenheimer Capital. Mr. McCormack became a portfolio manager of
the Portfolio in May 1996. He joined Oppenheimer Capital in 1994. From March
1993 to July 1994 Mr. McCormack was a security analyst at U.S. Trust Company and
prior to that he was a securities analyst with Gabelli and Company. He has a
Masters of Business Administration degree from the Wharton School. Timothy
Curro and Gavin Albert became portfolio managers of the Portfolio on January 1,
1997. Mr. Curro has been a Vice President of Oppenheimer Capital since November
1996. Prior thereto, he was a general partner of Value Holdings, L.P., an
investment partnership, from May 1995 to November 1996, a Vice President in the
equity research department at UBS Securities Inc. from June 1994 through May
1995 and from January 1991 through February 1993 and was a partner with Omega
Advisors, Inc. from March 1993 to March 1994. He has a Masters of Business
Administration degree from the University of California, Berkeley. Mr. Albert,
Vice President of Oppenheimer Capital since December 1996, joined the firm in
September 1994 as a research analyst. Prior thereto he was a management
consultant for EDS Energy Management in 1994, attended the Vanderbilt University
Business School from September 1992 to May 1994 (with a Masters of Business
Administration degree in finance and management) and was a financial analyst in
the Corporate Finance department of Texaco, Inc. from 1990 to 1992.

MANAGED PORTFOLIO

The investment objective of the Managed Portfolio is to achieve growth of
capital over time through investment in a portfolio consisting of common stocks,
bonds and cash equivalents, the percentages of which will vary based on the
Manager's assessments of the relative outlook for such investments. In seeking
to achieve its investment objective, the types of equity securities in which the
Portfolio may invest are likely to be the same as those in which the Equity
Portfolio invests, although securities of the type in which the Small Cap
Portfolio invests may, to a lesser extent, be included. Debt securities are
expected to be predominantly investment grade intermediate to long term U.S.
Government and corporate debt, although the Portfolio will also invest in high
quality short term money market and cash equivalent securities and may invest
almost all of its assets in such securities when the Manager deems it advisable
in order to preserve capital. In addition, the Portfolio may also purchase
foreign securities provided that they are listed on a domestic or foreign
securities exchange or are represented by American depository receipts listed on
a domestic securities exchange or traded in domestic or foreign over-the-counter
markets.

The allocation of the Portfolio's assets among the different types of
permitted investments will vary from time to time based upon the Manager's
evaluation of economic and market trends and its perception of the relative
values available from such types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Portfolio's assets that may,
at any given time, be invested in any of the types of investments identified
above. Consequently, while the Portfolio will earn income to the extent it is
invested in bonds or cash equivalents, the Portfolio does not have any specific
income objective. Although there is neither a minimum nor maximum percentage of
the Portfolio's assets that may, at any given time, be invested in any of the
types of investments identified above, it is anticipated that most of the time
the majority of the Portfolio's assets will be invested in common stocks. The
investments of the Managed Portfolio are managed by Richard J. Glasebrook II,
Managing Director of Oppenheimer Capital. He joined Oppenheimer Capital in
1991. From 1983 to 1991, he was a partner with Delafield Asset Management and
from 1974 to 1970 he was a portfolio manager and analyst with Morgan Guaranty
Trust Co. Mr. Glasebrook graduated with a BA from Kenyon College and received
an MBA from the Harvard Graduate School of Business Administration.

ADDITIONAL INFORMATION ON INVESTMENT OBJECTIVES AND POLICIES

For the Equity and the Small Cap Portfolios, at times when the investment
climate is viewed as favorable, common stocks will be heavily emphasized. Under
normal circumstances, at least 65 percent of each Portfolio's assets will be
invested in common stocks or securities convertible into common stocks.

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In the event that future economic or financial conditions adversely affect
equity securities, or stocks are considered overvalued, each of the Equity and
Small Cap Portfolios may invest a substantial portion of its assets in debt
securities, with an emphasis on money market instruments or cash and cash
equivalents.

Each Portfolio will in the normal course have varying amounts of cash
assets which have not yet been invested in accordance with its objectives. This
cash will be temporarily invested in high quality short term money market
securities and cash equivalents.

Regulations under Section 817(h) of the Internal Revenue Code ("IRC
817(h)") require each Portfolio to diversify its investments. To comply with
these regulations each Portfolio is required to diversify its investments so
that on the last day of each quarter of a calendar year no more than 55 percent
of the value of its total assets is represented by any one investment, no more
than 70 percent is represented by any two investments, no more than 80 percent
is represented by any three investments, and no more than 90 percent is
represented by any four investments. For this purpose, securities of a given
issuer generally are treated as one investment, but each U.S. Government agency
and instrumentality is treated as a separate and distinct issuer. As such, any
security issued, guaranteed, or insured (to the extent so guaranteed or insured)
by the U.S. or an agency or instrumentality of the U.S. is treated as a security
issued by the U.S. Government or its agency or instrumentality, whichever is
applicable. These diversification rules limit the amount that any Portfolio can
invest in any single issuer, including direct obligations of the U.S. Treasury,
to 55 percent of the Portfolio's total assets at the end of any calendar
quarter.

MANAGEMENT OF ASSETS

The Manager intends to manage each Portfolio's assets by buying and selling
securities to help attain its investment objective. This may result in
increases or decreases in a Portfolio's current income available for
distribution to its shareholders. While none of the Portfolios is managed with
the intent of generating short-term capital gains, each of the Portfolios may
dispose of investments (including money market instruments) regardless of the
holding period if, in the opinion of the Manager, an issuer's creditworthiness
or perceived changes in a company's growth prospects or asset value make selling
them advisable. Such an investment decision may result in capital gains or
losses and could result in a high portfolio turnover rate during a given period,
resulting in increased transaction costs related to equity securities.
Disposing of debt securities in these circumstances should not increase direct
transaction costs since debt securities are normally traded on a principal basis
without brokerage commissions. However, such transactions do involve a mark-up
or mark-down of the price.

During periods of unusual market conditions when the Manager believes that
investing for defensive purposes is appropriate, or in order to meet anticipated
redemption requests, part or all of the assets of one or more of the Portfolios
may be invested in cash or cash equivalents including obligations listed above.

The "Financial Highlights" table shows the Portfolios' portfolio turnover
rates. The portfolio turnover rates of the Portfolios cannot be accurately
predicted. Nevertheless, it is anticipated that the Equity, Small Cap and
Managed Portfolios will have an annual turnover rate (excluding turnover of
securities having a maturity of one year or less) of less than 100%. A 100
percent annual turnover rate would occur, for example, if all the securities in
a Portfolio's investment portfolio were replaced once in a period of one year.

RISK ASPECTS OF THE INDIVIDUAL PORTFOLIOS

MANAGED PORTFOLIO. An investment in the Managed Portfolio will entail both
market and financial risk, the extent of which depends on the amount of the
Portfolio's assets which are committed to equity, longer term debt or money
market securities at any particular time. As the Managed Portfolio will invest
in mortgage-backed securities, such securities, while similar to other fixed-
income securities, involve the additional risk of prepayment because mortgage
prepayments are passed through to the holder of the mortgage-backed security and
must be reinvested. Prepayments of mortgage principal reduce the stream of
future payments and generate cash which

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must be reinvested. When interest rates fall, prepayments tend to rise. As
such these Portfolios may have to reinvest that portion of their respective
assets invested in such securities more frequently when interest rates are low
than when interest rates are high.

SMALL CAP PORTFOLIO. The Small Cap Portfolio is expected to have greater
risk exposure and reward potential than a portfolio which invests primarily in
larger-capitalization companies. The trading volumes of securities of
smaller-capitalization companies are normally less than those of
larger-capitalization companies. This often translates into greater price
swings, both upward and downward. The waiting period for the achievement of an
investor's objectives might be longer since these securities are not closely
monitored by research analysts and, thus, it takes more time for investors to
become aware of fundamental changes or other factors which have motivated the
Portfolio's purchase. Smaller-capitalization companies often achieve higher
growth rates and experience higher failure rates than do larger-capitalization
companies.

ADDITIONAL RISKS OF FOREIGN SECURITIES: The Equity, Small Cap and Managed
Portfolios may purchase foreign securities that are listed on a domestic or
foreign securities exchange, traded in domestic or foreign over-the counter
markets or represented by American Depository Receipts. There is no limit to
the amount of such foreign securities the Portfolios may acquire. Certain
factors and risks are presented by investment in foreign securities which are in
addition to the usual risks inherent in domestic securities. Foreign companies
are not necessarily subject to uniform accounting, auditing and financial
reporting standards or other regulatory requirements comparable to those
applicable to U.S. companies. Thus, there may be less available information
concerning non-U.S. issuers of securities held by a Portfolio than is available
concerning U.S. companies. In addition, with respect to some foreign countries,
there is the possibility of nationalization, expropriation or confiscatory
taxation; income earned in the foreign nation being subject to taxation,
including withholding taxes on interest and dividends, or other taxes imposed
with respect to investments in the foreign nation; limitations on the removal of
securities, property or other assets of a fund; difficulties in pursuing legal
remedies and obtaining judgments in foreign courts, or political or social
instability or diplomatic developments which could affect U.S. investments in
those countries. For a description of the risks of possible losses through
holding of securities in foreign custodian banks and depositories, see
"Investment of Assets" in the Additional Statement.

Securities of many non-U.S. companies may be less liquid and their prices
more volatile than securities of comparable U.S. companies. Non-U.S. stock
exchanges and brokers are generally subject to less governmental supervision and
regulation than in the U.S. and commissions on foreign stock exchanges are
generally higher than negotiated commissions on U.S. transactions. In addition,
there may in certain instances be delays in the settlement of non-U.S. stock
exchange transactions. Certain countries restrict foreign investments in their
securities markets. These restrictions may limit or preclude investment in
certain countries, industries or market sectors, or may increase the cost of
investing in securities of particular companies. Purchasing the shares of
investment companies which invest in securities of a given country may be the
only or the most efficient way to invest in that country. This may require the
payment of a premium above the net asset value of such investment companies and
the return will be reduced by the operating expenses of those investment
companies.

A decline in the value of the U.S. dollar against the value of any
particular currency will cause an increase in the U.S. dollar value of a
Portfolio's holdings denominated in such currency. Conversely, a decline in the
value of any particular currency against the U.S. dollar will cause a decline in
the U.S. dollar value of the Portfolio's holdings of securities denominated in
such currency. Some foreign currency values may be volatile and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets which could adversely affect a Portfolio. The
Portfolios do not intend to speculate in foreign currency in connection with the
purchase or sale of securities on a foreign securities exchange but may enter
into foreign currency contracts to hedge their foreign currency exposure. While
those transactions may minimize the impact of currency appreciation and
depreciation, the Portfolios will bear a cost for entering into the transaction
and such transactions do not protect against a decline in the security's value
relative to other securities denominated in that currency.

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<PAGE>

securities in these countries have experienced greater price movement, both
positive and negative, than securities of companies located in developed
countries. Lower-rated high-yielding emerging market securities may be
considered to have speculative elements.

HIGH YIELD SECURITIES: It is the present intention of the Manager with
respect to each of the Equity, Small Cap and Managed Portfolios to invest no
more than 5 percent of its net assets in bonds rated below Baa3 by Moody's or
BBB- by S&P (commonly known as "junk bonds"). In the event that the Manager
intends in the future to invest more than 5 percent of the net assets of any
such Portfolio in junk bonds, appropriate disclosures will be made to existing
and prospective shareholders. For information about the possible risks of
investing in junk bonds see "Investment of Assets" in the Additional Statement.

OPTIONS AND FUTURES: To the extent permitted by applicable state law, the
Small Cap and Equity Portfolios may engage in futures contracts and options on
futures contracts for bona fide hedging or other non-speculative purposes. The
Small Cap Portfolio may also engage in options on stock indices. The Small Cap
and Equity Portfolios may write covered call options on individual securities.
These Portfolios will not enter into any leveraged futures transactions.
Different uses of futures and options have different risk and return
characteristics. Generally, selling futures contracts, purchasing put options
and writing call options are strategies designed to protect against falling
security prices and can limit potential gains if prices rise. Purchasing
futures contracts, purchasing call options and writing put options are
strategies whose returns tend to rise and fall together with securities prices
and can cause losses if prices fall. If securities prices remain unchanged over
time, option writing strategies tend to be profitable while option buying
strategies tend to be unprofitable. For more information about Options and
Futures see "Investment Techniques" in this Prospectus and "Investment of
Assets" in the Additional Statement.

INVESTMENT TECHNIQUES

The investment techniques or instruments described below are used for the
Portfolios' investment programs:

SHORT-TERM INVESTMENTS. Each Portfolio typically invests a part of its
assets in various types of U.S. Government securities and high quality, short-
term debt securities with remaining maturities of one year or less ("money
market instruments"). This type of short-term investment is made to provide
liquidity for the purchase of new investments and to effect redemptions of
shares. The money market instruments in which each Portfolio may invest include
government obligations, certificates of deposit, bankers' acceptances,
commercial paper, short-term corporate securities and repurchase agreements.

REPURCHASE AGREEMENTS. Each Portfolio may acquire securities subject to
repurchase agreements. Under a typical repurchase agreement, a Portfolio would
acquire a debt security for a relatively short period (usually for one day and
not for more than one week) subject to an obligation of the seller to repurchase
and of the Portfolio to resell the debt security at an agreed-upon higher price,
thereby establishing a fixed investment return during the Portfolio's holding
period. A Portfolio will enter into repurchase agreements with member banks of
the Federal Reserve System having total assets in excess of $500 million and
with dealers registered with the SEC. Under each repurchase agreement the
selling institution will be required to maintain as collateral securities whose
market value is at least equal to the repurchase price. Repurchase agreements
could involve certain risks in the event of default or insolvency of the selling
institution, including costs of disposing of securities held as collateral and
any loss resulting from delays or restrictions upon the Portfolio's ability to
dispose of securities. Pursuant to guidelines established by the Portfolio's
Board of Trustees, the Manager considers the creditworthiness of those banks and
non-bank dealers with which a Portfolio enters into repurchase agreements and
monitors on an ongoing basis the value of securities held as collateral to
ensure that such value is maintained at the required level. A Portfolio will
not enter into a repurchase agreement with a dealer if the agreement has a
maturity beyond seven days. The staff of the SEC has taken the position that
repurchase agreements are loans collateralized by the underlying securities.

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<PAGE>

LOANS OF PORTFOLIO SECURITIES. Each Portfolio may lend its portfolio
securities if such loans are secured continuously by collateral (cash, U.S.
Government or agency obligations or letters of credit) maintained on a daily
basis in an amount at least equal at all times to the market value of the
securities loaned and if the Portfolio does not incur any fees (other than the
transaction fees of its custodian bank) in connection with such loans. A
Portfolio may call the loan at any time on five days' notice and reacquire the
loaned securities. During the loan period, the Portfolio would continue to
receive the equivalent of the interest paid by the issuer on the securities
loaned and would also have the right to receive the interest on investment of
the cash collateral in short-term debt instruments. A portion of either or both
kinds of such interest may be paid to the borrower of such securities. It is
not intended that the value of the securities loaned, if any, would exceed 10
percent of the value of the total assets of the Equity, Small Cap and Managed
Portfolios. Securities loans must also meet applicable tests under the Internal
Revenue Code. A Portfolio could experience various costs or loss if a borrower
defaults on its obligation to return the borrowed securities.

OPTIONS AND FUTURES. To the extent permitted by applicable state law, the
Small Cap and Equity Portfolios may engage in options and futures transactions.
The Small Cap and Equity Portfolios may engage in futures contracts or options
on futures contracts for bona fide hedging or other non-speculative purposes and
to write calls on individual securities. The Small Cap, Equity and Managed
Portfolios may also enter into forward foreign currency contracts to purchase or
sell foreign currencies in connection with any transactions in foreign
securities. The Small Cap Portfolio may also engage in options on stock
indices. When any of such Portfolios anticipate a significant market or market
sector advance, the purchase of a futures contract affords a hedge against not
participating in the advance at a time when such Portfolio is not fully invested
("anticipatory hedge"). Such a purchase of a futures contract would serve as a
temporary substitute for the purchase of individual securities, which then may
be purchased in an orderly fashion once the market has stabilized. As
individual securities are purchased, an equivalent amount of futures contracts
could be terminated by offsetting sales. The Portfolios may sell futures
contracts in anticipation of or in a general market or market sector decline
that may adversely affect the market value of such Portfolio's securities
("defensive hedge"). To the extent that the Portfolios' securities change in
value in correlation with the underlying security or index, the sale of futures
contracts would substantially reduce the risk to the Portfolios of a market
decline and by so doing, provide an alternative to the liquidation of securities
positions in the Portfolios with attendant transaction costs. So long as the
Commodities Futures Trading Commission rules so require, none of the Portfolios
will enter into any financial futures or options contract unless such
transactions are for bona fide hedging purposes, or for other purposes only if
the aggregate initial margins and premiums required to establish such non-
hedging positions would not exceed 5 percent of the liquidation value of such
Portfolio's assets. When writing put options, the Fund, on behalf of the
Portfolio, will maintain in a segregated account at its Custodian liquid assets
with a value equal to at least the exercise price of the option to secure its
obligation to pay for the underlying security. As a result, such Portfolio
forgoes the opportunity of trading the segregated assets or writing calls
against those assets. There may not be a complete correlation between the price
of options and futures and the market prices of the underlying securities. The
Portfolio may lose the ability to profit from an increase in the market value of
the underlying security or may lose its premium payment. If due to a lack of a
market a Portfolio could not effect a closing purchase transaction with respect
to an OTC option, it would have to hold the callable securities until the call
lapsed or was exercised.

MORTGAGE-BACKED SECURITIES. The Managed Portfolio may invest in a type of
mortgage-backed security known as modified pass-through certificates. Each
certificate evidences an interest in a specific pool of mortgages that have been
grouped together for sale and provides investors with payments of interest and
principal. The issuer of modified pass-through certificates guarantees the
payment of the principal and interest whether or not the issuer has collected
such amounts on the underlying mortgage.

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<PAGE>

or guaranteed by the Veteran's Administration. The guarantee of payments under
these certificates is backed by the full faith and credit of the United States.
Fannie Mae is a government-sponsored corporation owned entirely by private
stockholders. The guarantee of payments under these instruments is that of
Fannie Mae only. They are not backed by the full faith and credit of the United
States but the U.S. Treasury may extend credit to Fannie Mae through
discretionary purchases of its securities. The U.S. Government has no
obligation to assume the liabilities of Fannie Mae. Freddie Mac is a corporate
instrumentality of the United States government whose stock is owned by the
Federal Home Loan Banks. Certificates issued by Freddie Mac represent interest
in mortgages from its portfolio. Freddie Mac guarantees payments under its
certificates but this guarantee is not backed by the full faith and credit of
the United States and Freddie Mac does not have authority to borrow from the
U.S. Treasury.

The coupon rate of these instruments is lower than the interest rate on the
underlying mortgages by the amount of fees paid to the issuing agencies, usually
approximately 1/2 of 1 percent. It is not anticipated that the Portfolios'
investments will have any particular maturity. Mortgage-backed securities, due
to the scheduled periodic repayment of principal, and the possibility of
accelerated repayment of underlying mortgage obligations, fluctuate in value in
a different manner than other, non-redeemable debt securities. The Managed
Portfolio also may invest in "collateralized mortgage obligations" ("CMO's")
which are debt obligations secured by mortgage-backed securities where the
investor looks only to the issuer of the security for payment of principal and
interest.

PORTFOLIO TRANSACTIONS. The Manager's primary consideration when executing
security transactions with broker-dealers is to obtain, and maintain the
availability of, execution at the most favorable prices and in the most
effective manner possible. The Manager may select CIBC Oppenheimer Corp. ("CIBC
Oppenheimer"), a former affiliate of the Manager, to execute transactions for
the Portfolios. Selection of broker-dealers to execute portfolio transactions
must be done in a manner consistent with the foregoing primary consideration,
the "Rules of Fair Practice" of the National Association of Securities Dealers,
Inc. and such other policies as the Board of Trustees may determine. (For a
further discussion of portfolio trading, see the Additional Statement,
"Investment Management and Other Services.")

INVESTMENT RESTRICTIONS

Each Portfolio is subject to certain investment restrictions which,
together with its investment objective, are fundamental policies changeable only
by shareholder vote. (The restrictions in 1, 2 and 3 do not apply to U.S.
Government securities.) Under some of those restrictions, each Portfolio may
not:

1. Invest more than 5 percent of the value of its total assets in the
securities of any one issuer, or purchase more than 10 percent of the voting
securities, or more than 10 percent of any class of security, of any issuer (for
this purpose all outstanding debt securities of an issuer are considered as one
class and all preferred stock of an issuer are considered as one class).

2. Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, a Portfolio may invest up to
25 percent of its total assets (valued at the time of investment) in any one
industry classification used by that Portfolio for investment purposes.

3. Invest more than 5 percent of the value of its total assets in
securities of issuers having a record, together with predecessors, of less than
three years of continuous operation.

4. Make loans, except through the purchase of U.S. Government securities
and corporate debt obligations, repurchase agreements or lending portfolio
securities as described above under "Loans of Portfolio Securities".

5. Borrow money in excess of 10 percent of the value of its total assets.
It may borrow only as a temporary measure for extraordinary or emergency
purposes and will make no additional investments while such borrowings exceed 5
percent of the total assets. Such prohibition against borrowing does not
prohibit escrow or other collateral or margin arrangements in connection with
the hedging instruments which a Portfolio is permitted to use by any of its
other fundamental policies.

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<PAGE>

6. Invest more than 15 percent of its assets in illiquid securities
(securities for which market quotations are not readily available) and
repurchase agreements which have a maturity of longer than seven days. Other
investment restrictions are described in the Additional Statement.

All percentage limitations apply immediately after a purchase or initial
investment and any subsequent change in any applicable percentage resulting from
market fluctuations or other changes in the amount of total assets does not
require elimination of any security from a Portfolio.

MANAGEMENT OF THE FUND

The Fund's Board of Trustees has overall responsibility for the management
of the Fund under the laws of Massachusetts governing the responsibilities of
trustees of a Massachusetts business trust. In general, such responsibilities
are comparable to those of directors of a Massachusetts business corporation.
The Board of Trustees of the Fund has undertaken to monitor the Fund for the
existence of any material irreconcilable conflict between the interests of
variable annuity Contractowners, variable life insurance Contractowners and
Qualified Plans due to the difference of tax treatment and other considerations,
and shall report any such conflict to the boards of the respective life
insurance companies which use the Fund as an investment vehicle for their
respective variable annuity and life insurance contracts and to the Qualified
Plans. The Boards of Directors of those life insurance companies and the
Manager have agreed to be responsible for reporting any potential or existing
conflicts to the Trustees of the Fund. If a material irreconcilable conflict
exists that affects those life insurance companies, those life insurance
companies have agreed, at their own cost, to remedy such conflict up to and
including establishing a new registered management investment company and
segregating the assets underlying the variable annuity contracts and the
variable life insurance contracts. Qualified Plans which acquire more than 10
percent of the assets of the Fund will be required to report any potential or
existing conflicts to the Trustees of the Fund, and if a material irreconcilable
conflict exists, to remedy such conflict, up to and including redeeming Shares
of the Portfolios held by the Qualified Plans. The Additional Statement
contains information about the Trustees and Officers.

THE ADVISORY AGREEMENT. The Manager is responsible for management of the
Fund's business. Pursuant to the investment advisory agreement (the "Advisory
Agreement") with the Fund, and subject to the authority of the Board of
Trustees, the Manager supervises the investment operations of each Portfolio,
furnishes advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities and provides certain
administrative services for the Fund.

Under the Advisory Agreement, each Portfolio is responsible for bearing
organizational expenses, taxes and governmental fees; brokerage commissions,
interest and other expenses incurred in acquiring and disposing of portfolio
securities; trustees fees, out of pocket travel expenses and other expenses for
trustees who are not interested persons; legal, accounting and audit expenses;
custodian, dividend disbursing and transfer agent fees; and other expenses not
expressly assumed by the Manager under the Advisory Agreement, which is
discussed below. The Manager will reimburse the Fund such that the total
operating expenses (net of any expense offsets) of each of the Equity, Small Cap
and Managed Portfolios do not exceed 1.00% of their respective average daily net
assets.

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<PAGE>

OpCap Advisors became effective November 5, 1997. The new Advisory Agreement
was approved by the shareholders of each Portfolio of the Fund at a Special
Meeting of Shareholders held on October 14, 1997. On November 30, 1997,
Oppenheimer Capital merged with a subsidiary of PIMCO Advisors and, as a result,
Oppenheimer Capital and OpCap Advisors became indirect wholly-owned subsidiaries
of PIMCO Advisors. PIMCO Advisors has two general partners: PIMCO Partners,
G.P. ("PIMCO G.P.") a California general partnership, and PIMCO Advisors
Holdings L.P. (formerly Oppenheimer Capital, L.P.), an NYSE-listed Delaware
limited partnership of which PIMCO G.P. is the sole general partner. PIMCO GP
beneficially owns or controls (through its general partner interest in PIMCO
Advisors Holdings, L.P., formerly Oppenheimer Capital, L.P.) greater than 80%
of the units of limited partnership ("Units") of PIMCO Advisors. PIMCO GP has
two general partners. The first of these is PIMCO Holding LLC, a Delaware
limited liability company and an indirect wholly-owned subsidiary of Pacific
Life Insurance Company ("Pacific Life"). The managing general partner of PIMCO
GP is PIMCO Partners L.L.C. ("PPLLC"), a California limited liability company.
PPLLC's members are the Managing Directors (the "PIMCO Managers") of Pacific
Investment Management Company, a subsidiary of PIMCO Advisors (the "PIMCO
Subpartnership"). The PIMCO Managers are: William H. Gross, Dean S. Meiling,
James F. Muzzy, William F. Podlich, III, Brent R. Harris, John L. Hague, William
S. Thompson Jr., William S. Powers, David H. Edington, Benjamin Trosky, William
R. Benz, II and Lee R. Thomas, III. PIMCO Advisors is governed by a Management
Board, which consists of sixteen members, pursuant to a delegation by its
general partners. PIMCO GP has the power to designate up to nine members of the
Management Board and the PIMCO Subpartnership, of which the PIMCO Managers are
the Managing Directors, has the power to designate up to two members. In
addition, PIMCO GP, as the controlling general partner of PIMCO Advisors, has
the power to revoke the delegation to the Management Board and exercise control
of PIMCO Advisors. As a result, Pacific Life and/or the PIMCO Managers may be
deemed to control PIMCO Advisors. Pacific Life and the PIMCO Managers disclaim
such control. Because of direct or indirect power to appoint 25% of the members
of the Equity Board, (i) Pacific Life and (ii) the PIMCO Managers and/or the
PIMCO Subpartnership may each be deemed, under applicable provisions of the
Investment Company Act, to control PIMCO Advisors. Pacific Life, the PIMCO
Subpartnership and the PIMCO Managers disclaim such control. The Additional
Statement contains more information about the Advisory Agreement, including a
more complete description of the management fee and expense arrangements,
exculpation provisions and portfolio transactions for the Fund.

DETERMINATION OF NET ASSET VALUE

The net asset value per share is calculated separately for each Portfolio.
The net asset value of each Portfolio is determined at the close of the regular
trading session ("Close") of the NYSE (currently 4:00 p.m. Eastern Time) each
day the NYSE is open and on each other day on which there is a sufficient degree
of trading in any Portfolio's securities affecting materially the value of such
securities (if the Fund receives a request to redeem its shares that day), by
dividing the value of the Portfolio's net assets by the number of shares
outstanding. The Fund's Board of Trustees has established procedures to value
the Portfolios' securities to determine net asset value; in general, those
valuations are based on market value, with special provisions for (i) securities
(including restricted securities) not having readily-available market quotations
and (ii) short-term debt securities. Securities listed on a national securities
exchange or designated as national market system securities are valued at the
last sale price or, if there has been no sale that day or on the previous day on
which the exchange was open (if a week has not elapsed between such days), at
the last bid price. Debt and equity securities actively traded in the
over-the-counter market but not designated as national market system securities
are valued at the most recent bid price. Valuations may be provided by a
pricing service or from independent securities dealers. Short-term investments
with remaining maturities of less than 60 days are valued at amortized cost so
long as the Fund's Board of Trustees determines in good faith that such method
reflects fair value. Other securities are valued by methods that the Fund's
Board of Trustees believes accurately reflect fair value.

17
<PAGE>

determined in good faith under procedures established by and under the
supervision of the Fund's Board. Further details are in the Additional
Statement.

PURCHASE OF SHARES

Investments in the Fund may be made only by Variable Accounts and
Qualified Plans. Persons desiring to purchase Contracts funded by any Portfolio
or Portfolios of the Fund should read this Prospectus in conjunction with the
Prospectus of the Variable Accounts.

Shares of each Portfolio of the Fund are offered to the Variable Accounts
and Qualified Plans without sales charge at the respective net asset values of
the Portfolios next determined after receipt by the Fund of the purchase payment
in the manner set forth above under "Determination of Net Asset Value."
Certificates representing shares of the Fund will not be physically issued. OCC
Distributors acts without remuneration from the Fund as the exclusive
Distributor of the Fund's shares. The principal executive office of the
Distributor is located at Two World Financial Center, New York, New York l0080.

REDEMPTION OF SHARES

Shares of any Portfolio of the Fund can be redeemed by the Variable
Accounts and Qualified Plans at any time for cash, at the net asset value next
determined after receipt of the redemption request in proper form. The market
value of the securities in each of the Portfolios is subject to daily
fluctuation and the net asset value of each Portfolio's shares are expected to
fluctuate accordingly. The redemption value of the Fund's shares may be either
more or less than the original cost to the Variable Accounts. Payment for
redeemed shares is ordinarily made within seven days after receipt by the Fund's
transfer agent of redemption instructions in proper form. The redemption
privilege may be suspended and payment postponed during any period when: (l)
the NYSE is closed other than for customary weekend or holiday closings or
trading thereon is restricted as determined by the SEC; (2) an emergency, as
defined by the SEC exists making trading of portfolio securities or valuation of
net assets not reasonably practicable; (3) the SEC has by order permitted such
suspension.

STATE LAW RESTRICTIONS

The investments of the Variable Accounts are subject to the provisions of
the insurance laws of the States of domicile of the life insurance companies
offering the Contracts. The Fund and its Portfolios will voluntarily comply with
the statutory investment restrictions applicable to the investments of life
insurance company separate accounts, of the States of domicile of the life
insurance companies offering the Contracts, even though these state law
investment restrictions do not apply to the Fund and its Portfolios. For a
description of the state law restrictions applicable to the separate accounts of
the life insurance companies offering the Contracts, see the Prospectus for the
Variable Accounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Portfolio intends to distribute substantially all of its net
investment income and any net realized capital gains. Dividends from net
investment income and any distributions of realized capital gains will be paid
in additional shares of the Portfolio paying the dividend or making the
distribution and credited to the shareholder's account unless the shareholder
elects to receive such dividends or distributions in cash.

EQUITY, SMALL CAP AND MANAGED PORTFOLIOS. Dividends from net investment
income, if any, on the Small Cap, Equity and Managed Portfolios will be declared
and paid at least annually, and any net realized capital gains, if any, will be
declared and paid at least once per calendar year.

18
<PAGE>

TAXES. Because the Fund intends to distribute all of the net investment
income and capital gains of each Portfolio and otherwise qualify each Portfolio
as a regulated investment company under Subchapter M of the Internal Revenue
Code, it is not expected that any Portfolio of the Fund will be required to pay
any federal income tax on such income and capital gains. Since the Variable
Accounts and the Qualified Plans are the sole shareholders of the Fund, no
discussion is presented herein as to the federal income tax consequences at the
shareholder level. For information concerning the federal income tax
consequences to contractowners, see the Prospectus for the Variable Accounts.

CALCULATION OF PERFORMANCE

From time to time the performance of one or more of the Portfolios may be
advertised. The performance data contained in these advertisements is based
upon historical earnings and is not indicative of future performance. The data
for each Portfolio reflects the results of that Portfolio of the Fund and
recurring charges and deductions borne by or imposed on the Portfolio. As the
performance for any Portfolio does not include charges and deductions under the
Contracts, comparisons with other portfolios used in connection with different
variable accounts may not be useful. Set forth below for each Portfolio is the
manner in which the data contained in such advertisements will be calculated as
well as performance information for the Portfolios as indicated below. This
performance information does not include charges and deductions which are
imposed under the Contracts and described in the Prospectus for the Variable
Accounts.

AVERAGE ANNUAL TOTAL RETURN OF EQUITY, MANAGED AND SMALL CAP PORTFOLIOS
OF OCC ACCUMULATION TRUST(1),(2)
<TABLE>
<CAPTION>

For the one year For the five year For the period from
period ended period ended inception to
Portfolio December 31, 1997 December 31, 1997 December 31, 1997*
- --------- ----------------- ----------------- ------------------
<S> <C> <C> <C>
Equity 26.63% 19.41% 17.56%
Managed 22.29% 19.86% 20.32%
Small Cap 22.24% 14.61% 15.45%

</TABLE>

* The Equity, Managed and Small Cap Portfolios commenced operations as part
of the Fund on September 16, 1994. The Old Trust commenced operations on
August 1, 1988.

(1) On September 16, 1994, an investment company then called Quest for
Value Accumulation Trust (the "Old Trust") was effectively divided into two
investment funds, the Old Trust and the Fund, at which time the Fund
commenced operations. The total net assets for each of the Equity, Small Cap
and Managed Portfolios immediately after the transaction were $86,789,755,
$139,812,573 and $682,601,380, respectively, with respect to the Old Trust
and for each of the Equity, Small Cap and Managed Portfolios, $3,764,598,
$8,129,274 and $51,345,102 respectively, with respect to the Fund.

For the period prior to September 16, 1994, the performance figures above
for each of the Equity, Small Cap and Managed Portfolios reflect the
performance of the corresponding Portfolios of the Old Trust.

(2) Reflects waivers of all or a portion of the advisory fees and
reimbursement of other expenses for certain Portfolios by the Manager. Without
such waivers and reimbursements, the average annual total return during the
periods would have been lower.

In addition, reference in advertisements may be made to various indices,
including, without limitation, the S&P 500 Stock Index, the Russell 2000 and
various rankings by independent evaluators such as Morningstar and Lipper
Analytical Services, Inc. in order to provide the reader a basis for comparison.

19
<PAGE>

ADDITIONAL INFORMATION

ORGANIZATION OF THE FUND. The Fund was organized as a Massachusetts
business trust on May 12, 1994 and is registered with the SEC as an open-end
diversified management investment company. When issued, shares are fully paid
and have no preemptive or conversion rights. The shares of beneficial interest
of the Fund, $0.01 par value, are divided into seven separate series. The
shares of each series are freely-transferable and equal as to earnings, assets
and voting privileges with all other shares of that series. There are no
conversion, preemptive or other subscription rights. Upon liquidation of the
Fund or any Portfolio, shareholders of a Portfolio are entitled to share pro
rata in the net assets of that Portfolio available for distribution to
shareholders after all debts and expenses have been paid. The shares do not
have cumulative voting rights.

The Fund's Board of Trustees, whose responsibilities are comparable to
those of directors of a Massachusetts corporation, is empowered to issue
additional classes of shares, which classes may either be identical except as to
dividends or may have separate assets and liabilities; classes having separate
assets and liabilities are referred to as "series". The creation of additional
series and offering of their shares (the proceeds of which would be invested in
separate, independently managed portfolios with distinct investment objectives,
policies and restrictions) would not affect the interests of the current
shareholders in the existing Portfolios.

The assets received by the Fund on the sale of shares of each Portfolio and
all income, earnings, profits and proceeds thereof, subject only to the rights
of creditors, are allocated to each Portfolio, and constitute the assets of such
Portfolio. The assets of each Portfolio are required to be segregated on the
Fund's books of account. The Fund's Board of Trustees has agreed to monitor the
portfolio transactions and management of each of the Portfolios and to consider
and resolve any conflict that may arise.

VOTING. For matters affecting only one Portfolio, only the shareholders of
that Portfolio are entitled to vote. For matters relating to all the Portfolios
but affecting the Portfolios differently, separate votes by Portfolio are
required. Approval of an Investment Management Agreement and a change in
fundamental policies would be regarded as matters requiring separate voting by
each Portfolio. To the extent required by law, the Variable Accounts will vote
the shares of the Fund, or any Portfolio of the Fund, held in the Variable
Accounts in accordance with instructions from Contractowners, as described under
the caption "Voting Rights" in the accompanying Prospectus for the Variable
Accounts. Shares for which no instructions are received as well as shares which
the Manager or its parent, Oppenheimer Capital, may own, will be voted in the
same proportion as shares for which instructions are received. The Fund does
not intend to hold annual meetings of shareholders. However, the Board of
Trustees will call special meetings of shareholders for action by shareholder
vote as may be requested in writing by holders of 10 percent or more of the
outstanding shares of a Portfolio or as may be required by applicable laws or
the Declaration of Trust pursuant to which the Fund has been organized.

Under Massachusetts law shareholders could, in certain circumstances, be
held personally liable as partners for Fund obligations. The Fund's Declaration
of Trust contains an express disclaimer of shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given in
each instrument entered into or executed by the Fund. The Declaration of Trust
also provides for indemnification out of the Fund's property for any
shareholder held personally liable for any Fund obligation. Thus, the risk of
loss to a shareholder from being held personally liable for obligations of the
Fund is limited to the unlikely circumstance in which the Fund itself would be
unable to meet its obligations.

CUSTODIAN AND TRANSFER AGENT. The custodian of the assets of the Fund is
State Street Bank and Trust Company, P.O. Box 8505, Boston, MA 02266-8505,
which also acts as transfer agent and shareholder servicing agent for the Fund.

CONTRACTOWNERS INQUIRIES. Inquiries concerning the purchase and sale of
shares of the Fund, dividends, account statements and management and investment
policies of the Fund should be directed to the respective life insurance
companies which use the Fund as an investment vehicle for their respective
variable annuity and life insurance contracts.

20
<PAGE>

YEAR 2000 ISSUES. The management services provided to the Fund by the
Manager, and the services provided by the Transfer Agent to shareholders, depend
on the smooth functioning of their computer systems. Many computer software
systems in use today cannot recognize the year 2000, but revert to 1900 or some
other incorrect date, due to the manner in which dates were encoded and
calculated. That failure could have a negative impact on the handling of
securities trades, pricing and account services. Improperly functioning trading
systems may result in settlement problems and liquidity issues. In addition,
corporate and governmental data processing errors may result in production
problems for individual companies and overall economic uncertainties. Earnings
of individual issuers may be affected by remediation costs, which may be
substantial. The Manager and Transfer Agent have been actively working on
necessary changes to their own computer systems to deal with the year 2000 and
expect that their systems will be adapted before that date, but there can be no
assurance that they will be successful or that interaction with other
noncomplying computer systems will not impair their services at that time.

21
<PAGE>

APPENDIX

DESCRIPTION OF COMMERCIAL PAPER AND CORPORATE BOND RATINGS

COMMERCIAL PAPER RATINGS

Moody's commercial paper ratings are opinions of the ability of issuers to
repay promissory obligations when due. Moody's employs the following three
designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers: Prime 1 - Superior Ability for Repayment;
Prime 2 - Strong Ability for Repayment; Prime 3 - Acceptable Ability for
Repayment.

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment. Ratings are graded into four categories, ranging from "A" for
the highest quality obligations to "D" for the lowest. Issues assigned the
highest rating, "A", are regarded as having the greatest capacity for timely
payment. Issues in this category are delineated with the numbers "1", "2", and
"3" to indicate the relative degree of safety. The designation "A-1" indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong. The "A+" designation is applied to those issues rated "A-1" which
possess overwhelming safety characteristics. Capacity for timely payment on
issues with the designation "A-2" is strong. However, the relative degree of
safety is not as high as for issues designated "A-1."

Fitch's commercial paper ratings represent Fitch's assessment of the
issuer's ability to meet its obligations in a timely manner. The assessment
places emphasis on the existence of liquidity. Ratings range from "F-1+" which
represents exceptionally strong credit quality to "F-4" which represents weak
credit quality.

Duff's short-term ratings apply to all obligations with maturities of under
one year, including commercial paper, the uninsured portion of certificates of
deposit, unsecured bank loans, master notes, bankers acceptances, irrevocable
letters of credit and current maturities of long-term debt. Emphasis is placed
on liquidity. Ratings range for Duff 1+ for the highest quality to Duff 5 for
the lowest, issuers in default. Issues rated Duff 1+ are regarded as having the
highest certainty of timely payment. Issues rated Duff 1 are regarded as having
very high certainty of timely payment.

Thomson's BankWatch, Inc. assigns only one Issuer Rating to each company,
based upon a qualitative and quantitative analysis of the consolidated
financials of an issuer and its subsidiaries. The rating incorporates TBW's
opinion of the vulnerability of the company to adverse developments which may
impact the marketability of its securities, as well as the issuer's ability to
repay principal and interest. Ratings range from "TBW-1" for highest quality to
"TBW-3" for the lowest, companies with very serious problems.

BOND RATINGS

A bond rated "Aaa" by Moody's is judged to be the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is deemed secure.
While the various protective elements may change, such foreseeable changes are
unlikely to impair the fundamentally strong position of such issues. Bonds
which are rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as high
grade bonds. Margins of protection on "Aa" bonds may not be as large as on
"Aaa" securities or fluctuations of protective elements may be of greater
magnitude or there may be other elements present which make the long-term risks
appear somewhat larger than "Aaa" securities. Bonds which are rated "A" possess
many favorable investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a susceptibility
to impairment some time in the future. Bonds rated "Baa" are considered medium
grade obligations whose interest payments and principal security appear adequate
for the present but may lack certain protective elements or may be
characteristically unreliable over any great length of time. Moody's applies
numerical modifiers "1", "2" and "3" in each generic rating classification from
"Aa" through "B" in its corporate bond rating system. The modifier "1"
indicates that the security ranks in the higher end of its generic rating
category; the modifier "2" indicates a mid-

22
<PAGE>

range ranking; and the modifier "3" indicates that the issue ranks in the lower
end of its generic rating category. Bonds rated "Ba" are judged to have
speculative elements and bonds rated below "Ba" are speculative to a higher
degree.

Debt rated "AAA" by S&P has the highest rating assigned by it. Capacity to
pay interest and repay principal is extremely strong. Debt rated "AA" has a
strong capacity to pay interest and repay principal and differs from "AAA"
issues only in small degree. Debt rated "A" has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories. Debt
rated "BB" and below is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
Plus (+) and minus (-) signs are used with a rating symbol to indicate the
relative position within the category.

Debt rated "AAA", the highest rating by Fitch, is considered to be 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. Debt rated "AA" is regarded as very high credit quality.
The obligor's ability to pay interest and repay principal is very strong. Debt
rated "A" is of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than debt with higher
ratings. Debt rated "BBB" is of satisfactory credit quality. The obligor's
ability to pay interest and repay principal is adequate, however a change in
economic conditions may adversely affect timely payment. Plus (+) and minus (-)
signs are used with a rating symbol (except "AAA") to indicate the relative
position within the category.

Debt rated "AAA", the highest rating by Duff is considered to be of the
highest credit quality. The risk factors are negligible being only slightly
more than for risk-free U.S. Treasury debt. Debt rated "AA" is regarded as high
credit quality. Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. Debt rated "A" is
considered to have average but adequate protection factors. Bonds rated "BBB"
are considered to have below average protection factors but still sufficient for
prudent investment. Bonds rated "BB" and below are below investment grade and
possess fluctuating protection factors and risk. Plus (+) and minus (-) signs
are used with a rating symbol to indicate the relative position within the
category.

<PAGE>

OCC ACCUMULATION TRUST
One World Financial Center, New York, New York 10281

OCC ACCUMULATION TRUST (formerly known as Quest for Value Accumulation Trust,
the "Fund") is a registered open-end diversified management investment company
offering several investment alternatives. It permits an investor the
flexibility of choosing among different investment objectives, through the
following two Portfolios (the "Portfolios"), each of which is a separate series
of shares of beneficial interest of the Fund ("Shares"). The investment
objective of each Portfolio is as follows:

GLOBAL EQUITY PORTFOLIO: Long term capital appreciation through a global
investment strategy primarily involving equity securities.

The Fund is an investment vehicle for variable annuity and variable life
insurance contracts of various life insurance companies, and qualified pension
and retirement plans ("Qualified Plans"). Shares of the Fund are currently sold
to variable accounts of various life insurance companies for the purpose of
funding variable annuity and variable life insurance contracts (the
"Contracts"). These variable accounts (the "Separate Accounts") invest in
Shares of the Fund in accordance with allocation instructions received from
owners (the "Contractowners") of the Contracts. Allocation rights are further
described in the accompanying prospectus for the Variable Accounts. The
Separate Accounts will redeem Shares to the extent necessary to provide benefits
under the Contracts.

It is possible, although not presently anticipated, that a material
conflict could arise between and among the various variable accounts which
invest in Shares of the Fund and the Qualified Plans, which may, in the future
invest in Shares of the Fund. Such conflict could cause the liquidation of
assets of one or more of the Fund Portfolios to raise cash at times not
otherwise deemed advantageous by the Fund Manager. See "Management of the
Fund," page 14.

OPCAP ADVISORS
Investment Manager
Prospectus dated May 1, 1998

<PAGE>

TABLE OF CONTENTS

Page
----
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . .8

Global Equity Portfolio . . . . . . . . . . . . . . . . . . . . . . . . .8

Managed Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Additional Information on Investment Objectives and Policies . . . . . . . . .9

Investment Techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . 15

Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

State Law Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . 17

Calculation of Performance . . . . . . . . . . . . . . . . . . . . . . . . . 17

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

2
<PAGE>
PROSPECTUS SUMMARY

THE FUND The Fund is a Massachusetts business trust which issues
its shares in series as separate classes of shares of
beneficial interest. There are currently two series
available for investment through the Separate Accounts,
each of which is designated as a "Portfolio".
Together, the two Portfolios are designed to enable
investors to choose a number of investment alternatives
to achieve their financial goals and to shift assets
conveniently among Portfolios when and if their
investment aims or perception of the marketplace
change.

The Fund commenced operations on September 16, 1994
when an investment company then called Quest for Value
Accumulation Trust, with portfolios corresponding to
one of the current two available portfolios of the
Fund, was effectively divided into two investment
funds, the original investment company, whose name was
changed, and the Fund.

INVESTMENT OBJECTIVES
AND RESTRICTIONS The investment objective of each of the Portfolios is
set forth on the cover page of this Prospectus. These
objectives are described in more detail under the
heading "Investment Objectives and Policies." Although
each Portfolio will be actively managed by experienced
professionals, there can be no assurance that the
objectives will be achieved.

Market risk for fixed income securities is the risk
that interest rates will change, thereby affecting
their value. Generally, the value of fixed income
securities declines as interest rates rise, and
conversely, their value rises as interest rates
decline. The second type of risk, financial or credit
risk, is associated with the financial condition and
profitability of an individual equity or fixed income
issuer. The financial risk in owning equities is
related to earnings stability and overall financial
soundness of individual issuers and of issuers
collectively which are part of a particular industry.
For fixed income securities, credit risk relates to the
financial ability of an issuer to make periodic
interest payments and ultimately repay the principal at
maturity. (See "Additional Information on Investment
Objectives and Policies" for risk aspects of the
individual Portfolios).

INVESTMENT MANAGER OpCap Advisors (the "Manager"), the investment manager
of each of the Portfolios, is investment manager and
sub-adviser to several other registered investment
companies with assets under management of approximately
$18.3 billion at March 31, 1998 and is a subsidiary of
Oppenheimer Capital, a registered investment adviser,
which had assets under management, including those of
OpCap Advisors, of approximately $67.6 billion at March
31, 1998.

MANAGEMENT FEE The Manager receives a monthly fee from each Portfolio
at varying annual percentage rates of average daily net
assets, as follows: .80 percent on the first $400
million, .75 percent on the next $400 million and .70
percent thereafter of

3
<PAGE>

the average daily net assets for the Managed and Global
Equity Portfolios (see page 14).
PURCHASES AND
REDEMPTION OF SHARES Currently, shares of the Fund are sold at their net
asset value per share, without sales charge, for
allocation to the Separate Accounts as the underlying
investment for the Contracts. Accordingly, the
interest of the Contractowner with respect to the Fund
is subject to the terms of the Contract as described in
the accompanying Prospectus for the Separate Accounts,
which should be reviewed carefully by a person
considering the purchase of a Contract. That
Prospectus describes the relationship between increases
or decreases in the net asset value of Fund shares and
any distributions on such shares, and the benefits
provided under a Contract. The rights of the Separate
Accounts as shareholders of the Fund should be
distinguished from the rights of a Contractowner which
are described in the Contract. As long as shares of
the Fund are sold for allocation to the Separate
Accounts, the terms "shareholder" or "shareholders" in
this Prospectus shall refer to the Separate Accounts.
Shares are redeemed at their respective net asset
values as next determined after receipt of proper
notice of redemption.

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus, the Additional Statement, and the accompanying
Prospectus for the Separate Accounts.

4
<PAGE>

OCC ACCUMULATION TRUST

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1997, 1996 and 1995,
and for the period from September 16, 1994 through December 31, 1994 for the
Managed Portfolio; and for the years ended December 31, 1997 and 1996 and for
the period from March 1, 1995 through December 31, 1995 for the Global Equity
Portfolio have been audited by Price Waterhouse LLP, independent accountants,
whose unqualified report thereon appears in the Additional Statement (Part B).
This information should be read in conjunction with the financial statements and
related notes thereto included in the Additional Statement. Total return
information for the Portfolios of the Fund provided in the Financial Highlights
does not include charges and deductions which are imposed under the Contracts
and described in the Prospectus for the Separate Accounts. Inclusion of these
charges and deductions would reduce the total return of the Portfolios of the
Fund. Further information about the performance of each Portfolio is available
in the Fund's Annual Report or semi-annual report. Annual reports or semi-
annual reports can be obtained without charge upon written requests to the
insurance companies issuing the Contracts.

5
<PAGE>

OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

Year ended December 31,
----------------------------------- March 1, 1995 (1)
1997 1996 December 31, 1995
---------------- -------------- ---------------------
<S> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $13.23 $11.61 $10.00
----------- ----------- -----------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.06 0.04 0.05
Net realized and unrealized gain
on investments . . . . . . . . . . . . . . . . . . . . . . 1.79 1.70 1.83
----------- ----------- -----------
Total income from investment operations. . . . . . . . . . 1.85 1.74 1.88
----------- ----------- -----------
Dividends and distributions to shareholders
Dividends to shareholders from net investment income . . . . (0.04) (0.05) (0.03)
Distributions to shareholders in excess of
net investment income. . . . . . . . . . . . . . . . . . . (0.03) ---- ----
Distributions to shareholders from net realized gains. . . . (0.69) (0.07) (0.24)
----------- ----------- -----------
Total dividends and distributions to shareholders. . . . . (0.76) (0.12) (0.27)
----------- ----------- -----------
Net asset value, end of period . . . . . . . . . . . . . . . $14.32 $13.23 $11.61
----------- ----------- -----------
----------- ----------- -----------
Total return (2) . . . . . . . . . . . . . . . . . . . . . . 14.0% 15.0% 18.9%
----------- ----------- -----------
----------- ----------- -----------
Net assets, end of period. . . . . . . . . . . . . . . . . . $25,873,628 $16,972,488 $2,891,321
----------- ----------- -----------
Ratio of net operating expenses to average net assets (5,6). 1.19%(4) 1.42% 1.25%(3)
----------- ----------- -----------
Ratio of net investment income to average net assets (6) . . 0.45%(4) 0.81% 1.02%(3)
----------- ----------- -----------
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 53% 40% 67%
----------- ----------- -----------
Average commission rate. . . . . . . . . . . . . . . . . . . $0.0253 $0.0254 --
----------- ----------- -----------
- -----------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized ) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $23,063,042.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1H in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income
(loss) to average net assets would have been 1.20% and 0.44%,
respectively, for the year ended December 31, 1997, 1.83% and 0.22%,
respectively, for the year ended December 31, 1996 and 3.94% and (1.67%),
annualized, respectively, for the period March 1, 1995 (commencement of
operations) to December 31, 1995.

6
<PAGE>
OCC ACCUMULATION TRUST
MANAGED PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
---------------- -------------- -------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . $36.21 $30.14 $20.83 $21.80
------------ ------------ ----------- -----------
Income from investment operations
Net investment income. . . . . . . . . . . . 0.34 0.43 0.42 0.14
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . 7.45 6.31 9.02 (1.11)
------------ ------------ ----------- -----------
Total income from investment operations. . 7.79 6.74 9.44 (0.97)
------------ ------------ ----------- -----------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income. . . . . . . . . . . (0.40) (0.41) (0.13)
-
Distributions to shareholders from
net realized gains . . . . . . . . . . . . (1.22) (0.26) - -
------------ ------------ ----------- -----------
Total dividends and distributions to
shareholders . . . . . . . . . . . . . . . (1.62) (0.67) (0.13) -
------------ ------------ ----------- -----------
Net asset value, end of period . . . . . . . $42.38 $36.21 $30.14 $20.83
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
Total return (2) . . . . . . . . . . . . . . 22.3% 22.8% 45.6% (4.4%)
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
Net assets, end of period. . . . . . . . . . $466,791,224 $180,728,094 $99,188,147 $54,943,371
------------ ------------ ----------- -----------
Ratio of net operating expenses
to average net assets (5) . . . . . . . . 0.87%(4) 0.84%(6) 0.66%(6) 0.66%(3,6)
------------ ------------ ----------- -----------
Ratio of net investment income
to average net assets . . . . . . . . . 1.42%(4) 1.66%(6) 1.85%(6) 2.34%(3,6)
------------ ------------ ----------- -----------
Portfolio turnover rate. . . . . . . . . . . 32% 27% 22% 8%
------------ ------------ ----------- -----------
Average commission rate. . . . . . . . . . . $0.0571 $0.0592 - -
------------ ------------ ----------- -----------

- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $290,421,930.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

7
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each Portfolio of the Fund are
described below. Investment objectives of each Portfolio are fundamental
policies which cannot be changed for any Portfolio without a majority vote of
the shareholders of that Portfolio; investment policies are not fundamental and
may be adjusted by the Manager at any time, usually in response to its
perception of developments in the securities markets. The extent to which a
Portfolio will be able to achieve its distinct investment objectives depends
upon the Manager's ability to evaluate and develop the information it receives
into a successful investment program. Although each Portfolio will be managed
by experienced professionals, there can be no assurance that any Portfolio will
achieve its investment objectives. The values of the securities held in each
Portfolio will fluctuate and the net asset value per share at the time shares
are redeemed may be more or less than the net asset value per share at the time
of purchase. Investors should also refer to "Investment Techniques" for
additional information concerning the investment techniques employed for some or
all of the Portfolios.

INVESTMENT OBJECTIVES OF THE FUND PORTFOLIOS

GLOBAL EQUITY PORTFOLIO

The investment objective of the Global Equity Portfolio is to seek long
term capital appreciation through pursuit of a global investment strategy
primarily involving equity securities. The Portfolio may invest anywhere in the
world with no requirement that any specific percentage of its assets be
committed to any given country. Under normal circumstances, at least 65 percent
of the Portfolio's total assets will be invested in equity securities in at
least three different countries, one of which may be the United States.
Opportunities for capital appreciation may also be presented by debt securities.
The Portfolio may invest up to 35 percent of its total assets in debt
obligations with remaining maturities of one year or more of U.S. or foreign
corporate, governmental or bank issuers. It is the present intention of the
Portfolio, although not a fundamental policy, not to invest more than 5 percent
of its total assets in debt securities rated below investment-grade. Although
there is no minimum rating for this category of debt investments of the
Portfolio, the Portfolio does not intend to invest in bonds which are in
default. Domestic investments of this Portfolio are managed by Richard J.
Glasebrook II, Managing Director of Oppenheimer Capital. He joined Oppenheimer
Capital in 1991. From 1983 to 1991, he was a partner with Delafield Asset
Management and from 1974 to 1970 he was a portfolio manager and analyst with
Morgan Guaranty Trust Co. Mr. Glasebrook graduated with a BA from Kenyon
College and received an MBA from the Harvard Graduate School of Business
Administration. The Portfolio's investments in foreign securities are managed
by Pierre Daviron, President and Chief Investment Officer of Oppenheimer Capital
International, a division of Oppenheimer Capital created in 1993 and Managing
Director of Oppenheimer Capital. Previously, he was Chairman and Chief
Executive Officer at Indosuez Gartmore Asset Management, a division of Banque
Indosuez, Paris, France. Prior thereto he was a Managing Director in Mergers
and Acquisitions at J.P. Morgan. Mr. Daviron is a graduate of Hautes Etudes
Commerciales in Paris.

MANAGED PORTFOLIO

The investment objective of the Managed Portfolio is to achieve growth of
capital over time through investment in a portfolio consisting of common stocks,
bonds and cash equivalents, the percentages of which will vary based on the
Manager's assessments of the relative outlook for such investments. In seeking
to achieve its investment objective, the types of equity securities in which the
Portfolio may invest are likely to be the same as those in which the Equity
Portfolio invests, although securities of the type in which the Small Cap
Portfolio invests may, to a lesser extent, be included. Debt securities are
expected to be predominantly investment grade intermediate to long term U.S.
Government and corporate debt, although the Portfolio will also invest in high
quality short term money market and cash equivalent securities and may invest
almost all of its assets in such securities when the Manager deems it advisable
in order to preserve capital. In addition, the Portfolio may also purchase
foreign securities provided that they are listed on a domestic or foreign
securities exchange or are

8
<PAGE>

represented by American depository receipts listed on a domestic securities
exchange or traded in domestic or foreign over-the-counter markets.

The allocation of the Portfolio's assets among the different types of
permitted investments will vary from time to time based upon the Manager's
evaluation of economic and market trends and its perception of the relative
values available from such types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Portfolio's assets that may,
at any given time, be invested in any of the types of investments identified
above. Consequently, while the Portfolio will earn income to the extent it is
invested in bonds or cash equivalents, the Portfolio does not have any specific
income objective. Although there is neither a minimum nor maximum percentage of
the Portfolio's assets that may, at any given time, be invested in any of the
types of investments identified above, it is anticipated that most of the time
the majority of the Portfolio's assets will be invested in common stocks. The
investments of the Managed Portfolio are managed by Richard J. Glasebrook II,
Managing Director of Oppenheimer Capital.

ADDITIONAL INFORMATION ON INVESTMENT OBJECTIVES AND POLICIES

For the Global Equity Portfolio, at times when the investment climate is
viewed as favorable, common stocks will be heavily emphasized. Under normal
circumstances, at least 65 percent of the Portfolio's assets will be invested in
common stocks or securities convertible into common stocks.

In the event that future economic or financial conditions adversely affect
equity securities, or stocks are considered overvalued, the Global Equity
Portfolio may invest a substantial portion of its assets in debt securities,
with an emphasis on money market instruments or cash and cash equivalents.

Regulations under Section 817(h) of the Internal Revenue Code ("IRC
817(h)") require each Portfolio to diversify its investments. To comply with
these regulations each Portfolio is required to diversify its investments so
that on the last day of each quarter of a calendar year no more than 55 percent
of the value of its total assets is represented by any one investment, no more
than 70 percent is represented by any two investments, no more than 80 percent
is represented by any three investments, and no more than 90 percent is
represented by any four investments. For this purpose, securities of a given
issuer generally are treated as one investment, but each U.S. Government agency
and instrumentality is treated as a separate and distinct issuer. As such, any
security issued, guaranteed, or insured (to the extent so guaranteed or insured)
by the U.S. or an agency or instrumentality of the U.S. is treated as a security
issued by the U.S. Government or its agency or instrumentality, whichever is
applicable. These diversification rules limit the amount that any Portfolio can
invest in any single issuer, including direct obligations of the U.S. Treasury,
to 55 percent of the Portfolio's total assets at the end of any calendar
quarter.

MANAGEMENT OF ASSETS

The Manager intends to manage each Portfolio's assets by buying and selling
securities to help attain its investment objective. This may result in
increases or decreases in a Portfolio's current income available for
distribution to its shareholders. While none of the Portfolios is managed with
the intent of generating short-term capital gains, each of the Portfolios may
dispose of investments (including money market instruments) regardless of the
holding period if, in the opinion of the Manager, an issuer's creditworthiness
or perceived changes in a company's growth prospects or asset value make selling
them advisable. Such an investment decision may result in capital gains or
losses and could result in a high portfolio turnover rate during a given period,
resulting in increased transaction costs related to equity securities.
Disposing of debt securities in these circumstances should not increase direct
transaction costs since debt securities are normally traded on a principal basis
without brokerage commissions. However, such transactions do involve a mark-up
or mark-down of the price.

9
<PAGE>

During periods of unusual market conditions when the Manager believes that
investing for defensive purposes is appropriate, or in order to meet anticipated
redemption requests, part or all of the assets of one or more of the Portfolios
may be invested in cash or cash equivalents including obligations listed above.

The "Financial Highlights" table shows the Portfolios' portfolio turnover
rates. The portfolio turnover rates of the Portfolios cannot be accurately
predicted. Nevertheless, it is anticipated that Managed and Global Equity
Portfolios will have an annual turnover rate (excluding turnover of securities
having a maturity of one year or less) of less than 100%. A 100 percent annual
turnover rate would occur, for example, if all the securities in a Portfolio's
investment portfolio were replaced once in a period of one year.

RISK ASPECTS OF THE INDIVIDUAL PORTFOLIOS

MANAGED PORTFOLIO. An investment in the Managed Portfolio will entail both
market and financial risk, the extent of which depends on the amount of the
Portfolio's assets which are committed to equity, longer term debt or money
market securities at any particular time. As the Managed Portfolio may invest
in mortgage-backed securities, such securities, while similar to other fixed-
income securities, involve the additional risk of prepayment because mortgage
prepayments are passed through to the holder of the mortgage-backed security and
must be reinvested. Prepayments of mortgage principal reduce the stream of
future payments and generate cash which must be reinvested. When interest rates
fall, prepayments tend to rise. As such these Portfolios may have to reinvest
that portion of their respective assets invested in such securities more
frequently when interest rates are low than when interest rates are high.

ADDITIONAL RISKS OF FOREIGN SECURITIES: The Global Equity and Managed
Portfolios may purchase foreign securities that are listed on a domestic or
foreign securities exchange, traded in domestic or foreign over-the counter
markets or represented by American Depository Receipts. There is no limit to
the amount of such foreign securities the Portfolios may acquire. It will be
the general practice of the Global Equity Portfolio to invest in foreign equity
securities. Certain factors and risks are presented by investment in foreign
securities which are in addition to the usual risks inherent in domestic
securities. Foreign companies are not necessarily subject to uniform
accounting, auditing and financial reporting standards or other regulatory
requirements comparable to those applicable to U.S. companies. Thus, there may
be less available information concerning non-U.S. issuers of securities held by
a Portfolio than is available concerning U.S. companies. In addition, with
respect to some foreign countries, there is the possibility of nationalization,
expropriation or confiscatory taxation; income earned in the foreign nation
being subject to taxation, including withholding taxes on interest and
dividends, or other taxes imposed with respect to investments in the foreign
nation; limitations on the removal of securities, property or other assets of a
fund; difficulties in pursuing legal remedies and obtaining judgments in foreign
courts, or political or social instability or diplomatic developments which
could affect U.S. investments in those countries. For a description of the
risks of possible losses through holding of securities in foreign custodian
banks and depositories, see "Investment of Assets" in the Additional Statement.

Securities of many non-U.S. companies may be less liquid and their prices
more volatile than securities of comparable U.S. companies. Non-U.S. stock
exchanges and brokers are generally subject to less governmental supervision and
regulation than in the U.S. and commissions on foreign stock exchanges are
generally higher than negotiated commissions on U.S. transactions. In addition,
there may in certain instances be delays in the settlement of non-U.S. stock
exchange transactions. Certain countries restrict foreign investments in their
securities markets. These restrictions may limit or preclude investment in
certain countries, industries or market sectors, or may increase the cost of
investing in securities of particular companies. Purchasing the shares of
investment companies which invest in securities of a given country may be the
only or the most efficient way to invest in that country. This may require the
payment of a premium above the net asset value of such investment companies and
the return will be reduced by the operating expenses of those investment
companies.

which could adversely affect a Portfolio. The Portfolios do not intend to
speculate in foreign currency in connection with the purchase or sale of
securities on a foreign securities exchange but may enter into foreign currency
contracts to hedge their foreign currency exposure. While those transactions
may minimize the impact of currency appreciation and depreciation, the
Portfolios will bear a cost for entering into the transaction and such
transactions do not protect against a decline in the security's value relative
to other securities denominated in that currency.

It is expected that the Global Equity Portfolio will invest in American
Depository Receipts ("ADRs"),European Depository Receipts ("EDRs"), or Global
Depository Receipts ("GDRs") which are sponsored by persons other than the
underlying issuers. ADRs are U.S. dollar-denominated securities designed for
use in the U.S. securities markets. They represent and may be converted into
the underlying foreign security. EDRs are designed for use in the European
securities market. Issuers of the stock of such unsponsored ADRs are not
obligated to disclose material information in the United States and, therefore,
there may not be a correlation between such information and the market value of
such ADRs.

EMERGING MARKET COUNTRIES: Certain developing countries may have relatively
unstable governments, economies based on only a few industries that are
dependent upon international trade and reduced secondary market liquidity.
Foreign investment in certain emerging market countries is restricted or
controlled in varying degrees. In the past, securities in these countries have
experienced greater price movement, both positive and negative, than securities
of companies located in developed countries. Lower-rated high-yielding emerging
market securities may be considered to have speculative elements.

HIGH YIELD SECURITIES: It is the present intention of the Manager with
respect to each of the Global Equity and Managed Portfolios to invest no more
than 5 percent of its net assets in bonds rated below Baa3 by Moody's or BBB- by
S&P (commonly known as "junk bonds"). In the event that the Manager intends in
the future to invest more than 5 percent of the net assets of any such Portfolio
in junk bonds, appropriate disclosures will be made to existing and prospective
shareholders. For information about the possible risks of investing in junk
bonds see "Investment of Assets" in the Additional Statement.

OPTIONS AND FUTURES: To the extent permitted by applicable state law, the
Global Equity Portfolio may engage in futures contracts and options on futures
contracts for bona fide hedging or other non-speculative purposes. The Global
Equity Portfolio may also engage in options on stock indices. The Portfolio
will not enter into any leveraged futures transactions. Different uses of
futures and options have different risk and return characteristics. Generally,
selling futures contracts, purchasing put options and writing call options are
strategies designed to protect against falling security prices and can limit
potential gains if prices rise. Purchasing futures contracts, purchasing call
options and writing put options are strategies whose returns tend to rise and
fall together with securities prices and can cause losses if prices fall. If
securities prices remain unchanged over time, option writing strategies tend to
be profitable while option buying strategies tend to be unprofitable. For more
information about Options and Futures see "Investment Techniques" in this
Prospectus and "Investment of Assets" in the Additional Statement.

INVESTMENT TECHNIQUES

The investment techniques or instruments described below are used for the
Portfolios' investment programs:

11
<PAGE>

LOANS OF PORTFOLIO SECURITIES. Each Portfolio may lend its portfolio
securities if such loans are secured continuously by collateral (cash, U.S.
Government or agency obligations or letters of credit) maintained on a daily
basis in an amount at least equal at all times to the market value of the
securities loaned and if the Portfolio does not incur any fees (other than the
transaction fees of its custodian bank) in connection with such loans. A
Portfolio may call the loan at any time on five days' notice and reacquire the
loaned securities. During the loan period, the Portfolio would continue to
receive the equivalent of the interest paid by the issuer on the securities
loaned and would also have the right to receive the interest on investment of
the cash collateral in short-term debt instruments. A portion of either or both
kinds of such interest may be paid to the borrower of such securities. It is
not intended that the value of the securities loaned, if any, would exceed 10
percent of the value of the total assets of the Managed Portfolio and 33 1/3
percent of the value of the total assets of the Global Equity Portfolio.
Securities loans must also meet applicable tests under the Internal Revenue
Code. A Portfolio could experience various costs or loss if a borrower defaults
on its obligation to return the borrowed securities.

OPTIONS AND FUTURES. To the extent permitted by applicable state law, the
Global Equity Portfolio may engage in options and futures transactions. The
Global Equity Portfolio may purchase and sell financial futures contracts
(including bond futures contracts and index futures contracts), forward foreign
currency contracts, foreign currency futures contracts, options on futures
contracts and stock indices and options on currencies for bona fide hedging or
other non-speculative purposes. The Managed Portfolio may also enter into
forward foreign currency contracts to purchase or sell foreign currencies in
connection with any transactions in foreign securities. When any of such
Portfolios anticipate a significant market or market sector advance, the
purchase of a futures contract affords a hedge against not participating in the
advance at a time when such Portfolio is not fully invested ("anticipatory
hedge"). Such a purchase of a futures contract would serve as a temporary
substitute for the purchase of individual securities, which then may be
purchased in an orderly fashion once the market has stabilized. As individual
securities are purchased, an equivalent amount of futures contracts could be
terminated by offsetting sales. The Portfolios may sell futures contracts in
anticipation of or in a general market or market sector decline that may
adversely affect the market value of such Portfolio's securities ("defensive
hedge"). To the extent that the Portfolios' securities change in value in
correlation with the underlying security or index, the sale of futures contracts
would substantially reduce the risk to the Portfolios of a market decline and by
so doing, provide an alternative to the liquidation of securities positions in
the Portfolios with attendant transaction costs. So long as the Commodities
Futures Trading Commission rules so require, none of the Portfolios will enter
into any financial futures or options contract unless such transactions are for
bona fide hedging purposes, or for other purposes only if the aggregate initial
margins and premiums required to establish such non-hedging positions would not
exceed 5 percent of the liquidation value of such Portfolio's assets. When
writing put options, the Fund, on behalf of the Portfolio, will maintain in a
segregated account at its Custodian liquid assets with a value equal to at least
the exercise price of the option to secure its obligation to pay for the
underlying security. As a result, such Portfolio forgoes the opportunity of
trading the segregated assets or writing calls against those assets. There may
not be a complete correlation between the price of options and futures and the
market prices of the underlying securities. The Portfolio may lose the ability
to profit from an increase in the market value of the underlying security or may

12
<PAGE>

lose its premium payment. If due to a lack of a market a Portfolio could not
effect a closing purchase transaction with respect to an OTC option, it would
have to hold the callable securities until the call lapsed or was exercised.

The average life of these securities varies with the maturities of the
underlying mortgage instruments (generally up to 30 years) and with the extent
of prepayments on the mortgages themselves. Any such prepayments are passed
through to the certificate holder, reducing the stream of future payments.
Prepayments tend to rise in periods of falling interest rates, decreasing the
average life of the certificate and generating cash which must be invested in a
lower interest rate environment. This could also limit the appreciation
potential of the certificates when compared to similar debt obligations which
may not be paid down at will, and could cause losses on certificates purchased
at a premium or gains on certificates purchased at a discount. Ginnie Mae
certificates represent pools of mortgages insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by the Veteran's
Administration. The guarantee of payments under these certificates is backed by
the full faith and credit of the United States. Fannie Mae is a government-
sponsored corporation owned entirely by private stockholders. The guarantee of
payments under these instruments is that of Fannie Mae only. They are not
backed by the full faith and credit of the United States but the U.S. Treasury
may extend credit to Fannie Mae through discretionary purchases of its
securities. The U.S. Government has no obligation to assume the liabilities of
Fannie Mae. Freddie Mac is a corporate instrumentality of the United States
government whose stock is owned by the Federal Home Loan Banks. Certificates
issued by Freddie Mac represent interest in mortgages from its portfolio.
Freddie Mac guarantees payments under its certificates but this guarantee is not
backed by the full faith and credit of the United States and Freddie Mac does
not have authority to borrow from the U.S. Treasury.

The coupon rate of these instruments is lower than the interest rate on the
underlying mortgages by the amount of fees paid to the issuing agencies, usually
approximately 1/2 of 1 percent. It is not anticipated that the Portfolios'
investments will have any particular maturity. Mortgage-backed securities, due
to the scheduled periodic repayment of principal, and the possibility of
accelerated repayment of underlying mortgage obligations, fluctuate in value in
a different manner than other, non-redeemable debt securities. The Managed
Portfolio also may invest in "collateralized mortgage obligations" ("CMO's")
which are debt obligations secured by mortgage-backed securities where the
investor looks only to the issuer of the security for payment of principal and
interest.

PORTFOLIO TRANSACTIONS. The Manager's primary consideration when executing
security transactions with broker-dealers is to obtain, and maintain the
availability of, execution at the most favorable prices and in the most
effective manner possible. The Manager may select CIBC Oppenheimer Corp. ("CIBC
Oppenheimer"), a former affiliate of the Manager, to execute transactions for
the Portfolios. Selection of broker-dealers to execute portfolio transactions
must be done in a manner consistent with the foregoing primary consideration,
the "Rules of Fair Practice" of the National Association of Securities Dealers,
Inc. and such other policies as the Board of Trustees may determine. (For a
further discussion of portfolio trading, see the Additional Statement,
"Investment Management and Other Services.")

INVESTMENT RESTRICTIONS

Each Portfolio is subject to certain investment restrictions which,
together with its investment objective, are fundamental policies changeable only
by shareholder vote. (The restrictions in 1, 2 and 3 do not apply to U.S.
Government securities.) Under some of those restrictions, each Portfolio may
not:

1. Invest more than 5 percent of the value of its total assets in the
securities of any one issuer, or purchase more than 10 percent of the voting
securities, or more than 10 percent of any class of security, of any issuer (for
this purpose all outstanding debt securities of an issuer are considered as one
class and all preferred stock of an issuer are considered as one class).

13
<PAGE>

2. Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, a Portfolio may invest up to
25 percent of its total assets (valued at the time of investment) in any one
industry classification used by that Portfolio for investment purposes.

3. Invest more than 5 percent of the value of its total assets in
securities of issuers having a record, together with predecessors, of less than
three years of continuous operation.

4. Make loans, except through the purchase of U.S. Government securities
and corporate debt obligations, repurchase agreements or lending portfolio
securities as described above under "Loans of Portfolio Securities".

5. Borrow money in excess of 10 percent of the value of its total assets.
It may borrow only as a temporary measure for extraordinary or emergency
purposes and will make no additional investments while such borrowings exceed 5
percent of the total assets. Such prohibition against borrowing does not
prohibit escrow or other collateral or margin arrangements in connection with
the hedging instruments which a Portfolio is permitted to use by any of its
other fundamental policies.

6. Invest more than 15 percent of its assets in illiquid securities
(securities for which market quotations are not readily available) and
repurchase agreements which have a maturity of longer than seven days. Other
investment restrictions are described in the Additional Statement.

All percentage limitations apply immediately after a purchase or initial
investment and any subsequent change in any applicable percentage resulting from
market fluctuations or other changes in the amount of total assets does not
require elimination of any security from a Portfolio.

MANAGEMENT OF THE FUND

The Fund's Board of Trustees has overall responsibility for the management
of the Fund under the laws of Massachusetts governing the responsibilities of
trustees of a Massachusetts business trust. In general, such responsibilities
are comparable to those of directors of a Massachusetts business corporation.
The Board of Trustees of the Fund has undertaken to monitor the Fund for the
existence of any material irreconcilable conflict between the interests of
variable annuity Contractowners, variable life insurance Contractowners and
Qualified Plans due to the difference of tax treatment and other considerations,
and shall report any such conflict to the boards of the respective life
insurance companies which use the Fund as an investment vehicle for their
respective variable annuity and life insurance contracts and to the Qualified
Plans. The Boards of Directors of those life insurance companies and the
Manager have agreed to be responsible for reporting any potential or existing
conflicts to the Trustees of the Fund. If a material irreconcilable conflict
exists that affects those life insurance companies, those life insurance
companies have agreed, at their own cost, to remedy such conflict up to and
including establishing a new registered management investment company and
segregating the assets underlying the variable annuity contracts and the
variable life insurance contracts. Qualified Plans which acquire more than 10
percent of the assets of the Fund will be required to report any potential or
existing conflicts to the Trustees of the Fund, and if a material irreconcilable
conflict exists, to remedy such conflict, up to and including redeeming Shares
of the Portfolios held by the Qualified Plans. The Additional Statement
contains information about the Trustees and Officers.

THE ADVISORY AGREEMENT. The Manager is responsible for management of the
Fund's business. Pursuant to the investment advisory agreement (the "Advisory
Agreement") with the Fund, and subject to the authority of the Board of
Trustees, the Manager supervises the investment operations of each Portfolio,
furnishes advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities and provides certain
administrative services for the Fund.

14
<PAGE>

Under the Advisory Agreement, each Portfolio is responsible for bearing
organizational expenses, taxes and governmental fees; brokerage commissions,
interest and other expenses incurred in acquiring and disposing of portfolio
securities; trustees fees, out of pocket travel expenses and other expenses for
trustees who are not interested persons; legal, accounting and audit expenses;
custodian, dividend disbursing and transfer agent fees; and other expenses not
expressly assumed by the Manager under the Advisory Agreement, which is
discussed below. The Manager will reimburse the Fund such that the total
operating expenses (net of any expense offsets) of the Global Equity Portfolio
of the Fund do not exceed 1.25 percent of its average daily net assets and so
that the total operating expenses (net of any expense offsets) of the Managed
Portfolio of the Fund do not exceed 1.00% of its respective average daily net
assets.

The Manager is a subsidiary of Oppenheimer Capital, a registered investment
adviser with approximately $67.6 billion in assets under management on March 31,
1998. All investment management services performed under the Advisory Agreement
are performed by employees of Oppenheimer Capital. On November 4, 1997, PIMCO
Advisors L.P. ("PIMCO Advisors"), a registered investment adviser, and its
affiliates acquired control of Oppenheimer Capital and its subsidiary OpCap
Advisors, the Manager of the Fund. PIMCO Advisors and its affiliates (not
including Oppenheimer Capital) had $145.5 billion in assets under management on
February 28, 1998. A new Advisory Agreement (on identical terms as the previous
Advisory Agreement) between the Fund and OpCap Advisors became effective
November 5, 1997. The new Advisory Agreement was approved by the shareholders
of each Portfolio of the Fund at a Special Meeting of Shareholders held on
October 14, 1997. On November 30, 1997, Oppenheimer Capital merged with a
subsidiary of PIMCO Advisors and, as a result, Oppenheimer Capital and OpCap
Advisors became indirect wholly-owned subsidiaries of PIMCO Advisors. PIMCO
Advisors has two general partners: PIMCO Partners, G.P. ("PIMCO G.P.") a
California general partnership, and PIMCO Advisors Holdings L.P. (formerly
Oppenheimer Capital, L.P.), an NYSE-listed Delaware limited partnership of which
PIMCO G.P. is the sole general partner. PIMCO GP beneficially owns or controls
(through its general partner interest in PIMCO Advisors Holdings, L.P.,
formerly Oppenheimer Capital, L.P.) greater than 80% of the units of limited
partnership ("Units") of PIMCO Advisors. PIMCO GP has two general partners.
The first of these is PIMCO Holding LLC, a Delaware limited liability company
and an indirect wholly-owned subsidiary of Pacific Life Insurance Company
("Pacific Life"). The managing general partner of PIMCO GP is PIMCO Partners
L.L.C. ("PPLLC"), a California limited liability company. PPLLC's members are
the Managing Directors (the "PIMCO Managers") of Pacific Investment Management
Company, a subsidiary of PIMCO Advisors (the "PIMCO Subpartnership"). The PIMCO
Managers are: William H. Gross, Dean S. Meiling, James F. Muzzy, William F.
Podlich, III, Brent R. Harris, John L. Hague, William S. Thompson Jr., William
S. Powers, David H. Edington, Benjamin Trosky, William R. Benz, II and Lee R.
Thomas, III. PIMCO Advisors is governed by a Management Board, which consists
of sixteen members, pursuant to a delegation by its general partners. PIMCO GP
has the power to designate up to nine members of the Management Board and the
PIMCO Subpartnership, of which the PIMCO Managers are the Managing Directors,
has the power to designate up to two members. In addition, PIMCO GP, as the
controlling general partner of PIMCO Advisors, has the power to revoke the
delegation to the Management Board and exercise control of PIMCO Advisors. As a
result, Pacific Life and/or the PIMCO Managers may be deemed to control PIMCO
Advisors. Pacific Life and the PIMCO Managers disclaim such control. Because
of direct or indirect power to appoint 25% of the members of the Equity Board,
(i) Pacific Life and (ii) the PIMCO Managers and/or the PIMCO Subpartnership may
each be deemed, under applicable provisions of the Investment Company Act, to
control PIMCO Advisors. Pacific Life, the PIMCO Subpartnership and the PIMCO
Managers disclaim such control. The Additional Statement contains more
information about the Advisory Agreement, including a more complete description
of the management fee and expense arrangements, exculpation provisions and
portfolio transactions for the Fund.

DETERMINATION OF NET ASSET VALUE

15
<PAGE>

Fund's Board of Trustees has established procedures to value the Portfolios'
securities to determine net asset value; in general, those valuations are based
on market value, with special provisions for (i) securities (including
restricted securities) not having readily-available market quotations and (ii)
short-term debt securities. Securities listed on a national securities exchange
or designated as national market system securities are valued at the last sale
price or, if there has been no sale that day or on the previous day on which the
exchange was open (if a week has not elapsed between such days), at the last bid
price. Debt and equity securities actively traded in the over-the-counter
market but not designated as national market system securities are valued at the
most recent bid price. Valuations may be provided by a pricing service or from
independent securities dealers. Short-term investments with remaining
maturities of less than 60 days are valued at amortized cost so long as the
Fund's Board of Trustees determines in good faith that such method reflects fair
value. Other securities are valued by methods that the Fund's Board of Trustees
believes accurately reflect fair value.

PURCHASE OF SHARES

Investments in the Fund may be made only by Separate Accounts and Qualified
Plans. Persons desiring to purchase Contracts funded by any Portfolio or
Portfolios of the Fund should read this Prospectus in conjunction with the
Prospectus of the Separate Accounts.

Shares of each Portfolio of the Fund are offered to the Separate Accounts
and Qualified Plans without sales charge at the respective net asset values of
the Portfolios next determined after receipt by the Fund of the purchase payment
in the manner set forth above under "Determination of Net Asset Value."
Certificates representing shares of the Fund will not be physically issued. OCC
Distributors acts without remuneration from the Fund as the exclusive
Distributor of the Fund's shares. The principal executive office of the
Distributor is located at Two World Financial Center, New York, New York l0080.

REDEMPTION OF SHARES

Shares of any Portfolio of the Fund can be redeemed by the Separate
Accounts and Qualified Plans at any time for cash, at the net asset value next
determined after receipt of the redemption request in proper form. The market
value of the securities in each of the Portfolios is subject to daily
fluctuation and the net asset value of each Portfolio's shares are expected to
fluctuate accordingly. The redemption value of the Fund's shares may be either
more or less than the original cost to the Separate Accounts. Payment for
redeemed shares is ordinarily made within seven days after receipt by the Fund's
transfer agent of redemption instructions in proper form. The redemption
privilege may be suspended and payment postponed during any period when: (l)
the NYSE is closed other than for customary weekend or holiday closings or
trading thereon is restricted as determined by the SEC; (2) an emergency, as
defined by the SEC exists making trading of portfolio securities or valuation of
net assets not reasonably practicable; (3) the SEC has by order permitted such
suspension.

STATE LAW RESTRICTIONS

The investments of the Separate Accounts are subject to the provisions of
the insurance laws of the States of domicile of the life insurance companies
offering the Contracts. The Fund and its Portfolios will voluntarily comply with
the statutory investment restrictions applicable to the investments of life
insurance company separate accounts, of the States of domicile of the life
insurance companies offering the Contracts, even though these state

16
<PAGE>

law investment restrictions do not apply to the Fund and its Portfolios. For a
description of the state law restrictions applicable to the separate accounts of
the life insurance companies offering the Contracts, see the Prospectus for the
Separate Accounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Portfolio intends to distribute substantially all of its net
investment income and any net realized capital gains. Dividends from net
investment income and any distributions of realized capital gains will be paid
in additional shares of the Portfolio paying the dividend or making the
distribution and credited to the shareholder's account unless the shareholder
elects to receive such dividends or distributions in cash.

GLOBAL EQUITY AND MANAGED PORTFOLIOS. Dividends from net investment
income, if any, on the Global Equity and Managed Portfolios will be declared and
paid at least annually, and any net realized capital gains, if any, will be
declared and paid at least once per calendar year.

TAXES. Because the Fund intends to distribute all of the net investment
income and capital gains of each Portfolio and otherwise qualify each Portfolio
as a regulated investment company under Subchapter M of the Internal Revenue
Code, it is not expected that any Portfolio of the Fund will be required to pay
any federal income tax on such income and capital gains. Since the Variable
Accounts and the Qualified Plans are the sole shareholders of the Fund, no
discussion is presented herein as to the federal income tax consequences at the
shareholder level. For information concerning the federal income tax
consequences to contractowners, see the Prospectus for the Separate Accounts.

CALCULATION OF PERFORMANCE

From time to time the performance of one or more of the Portfolios may be
advertised. The performance data contained in these advertisements is based
upon historical earnings and is not indicative of future performance. The data
for each Portfolio reflects the results of that Portfolio of the Fund and
recurring charges and deductions borne by or imposed on the Portfolio. As the
performance for any Portfolio does not include charges and deductions under the
Contracts, comparisons with other portfolios used in connection with different
variable accounts may not be useful. Set forth below for each Portfolio is the
manner in which the data contained in such advertisements will be calculated as
well as performance information for the Portfolios as indicated below. This
performance information does not include charges and deductions which are
imposed under the Contracts and described in the Prospectus for the Separate
Accounts.

AVERAGE ANNUAL TOTAL RETURN OF MANAGED AND GLOBAL EQUITY PORTFOLIOS
OF OCC ACCUMULATION TRUST(1,2)
<TABLE>
<CAPTION>
For the one year For the five year For the period from
period ended period ended inception to
Portfolio December 31, 1997 December 31, 1997 December 31, 1997*
- --------- ----------------- ----------------- -------------------
<S> <C> <C> <C>
Managed 22.29% 19.86% 20.32%
Global Equity 14.02% N/A 16.91%
</TABLE>

*Inception date of the Global Equity Portfolio is March 1, 1995. The
Managed Portfolio commenced operations as part of the Fund on September 16,
1994. The Old Trust commenced operations on August 1, 1988.

(1) On September 16, 1994, an investment company then called Quest for
Value Accumulation Trust (the "Old Trust") was effectively divided into two
investment funds, the Old Trust and the Fund, at which time the Fund
commenced operations. The total net assets for the Managed Portfolio
immediately after the transaction were $682,601,380, with respect to the Old
Trust and $51,345,102 with respect to the Fund.

17
<PAGE>

For the period prior to September 16, 1994, the performance figures above
for each of the Small Cap and Managed Portfolios reflect the performance of the
corresponding Portfolios of the Old Trust.

(2) Reflects waivers of all or a portion of the advisory fees and
reimbursement of other expenses for certain Portfolios by the Manager. Without
such waivers and reimbursements, the average annual total return during the
periods would have been lower.

In addition, reference in advertisements may be made to various indices,
including, without limitation, the S&P 500 Stock Index, and the Morgan Stanley
International (MSCI) All Country World Index, and various rankings by
independent evaluators such as Morningstar and Lipper Analytical Services, Inc.
in order to provide the reader a basis for comparison.

ADDITIONAL INFORMATION

ORGANIZATION OF THE FUND. The Fund was organized as a Massachusetts
business trust on May 12, 1994 and is registered with the SEC as an open-end
diversified management investment company. When issued, shares are fully paid
and have no preemptive or conversion rights. The shares of beneficial interest
of the Fund, $0.01 par value, are divided into seven separate series. The
shares of each series are freely-transferable and equal as to earnings, assets
and voting privileges with all other shares of that series. There are no
conversion, preemptive or other subscription rights. Upon liquidation of the
Fund or any Portfolio, shareholders of a Portfolio are entitled to share pro
rata in the net assets of that Portfolio available for distribution to
shareholders after all debts and expenses have been paid. The shares do not
have cumulative voting rights.

The assets received by the Fund on the sale of shares of each Portfolio and
all income, earnings, profits and proceeds thereof, subject only to the rights
of creditors, are allocated to each Portfolio, and constitute the assets of such
Portfolio. The assets of each Portfolio are required to be segregated on the
Fund's books of account. The Fund's Board of Trustees has agreed to monitor the
portfolio transactions and management of each of the Portfolios and to consider
and resolve any conflict that may arise.

VOTING. For matters affecting only one Portfolio, only the shareholders of
that Portfolio are entitled to vote. For matters relating to all the Portfolios
but affecting the Portfolios differently, separate votes by Portfolio are
required. Approval of an Investment Management Agreement and a change in
fundamental policies would be regarded as matters requiring separate voting by
each Portfolio. To the extent required by law, the Variable Accounts will vote
the shares of the Fund, or any Portfolio of the Fund, held in the Separate
Accounts in accordance with instructions from Contractowners, as described under
the caption "Voting Rights" in the accompanying Prospectus for the Separate
Accounts. Shares for which no instructions are received as well as shares which
the Manager or its parent, Oppenheimer Capital, may own, will be voted in the
same proportion as shares for which instructions are received. The Fund does
not intend to hold annual meetings of shareholders. However, the Board of
Trustees will call special meetings of shareholders for action by shareholder
vote as may be requested in writing by holders of 10 percent or more of the
outstanding shares of a Portfolio or as may be required by applicable laws or
the Declaration of Trust pursuant to which the Fund has been organized.

Under Massachusetts law shareholders could, in certain circumstances, be
held personally liable as partners for Fund obligations. The Fund's Declaration
of Trust contains an express disclaimer of shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given in
each instrument entered into or executed by the Fund. The Declaration of Trust
also provides for indemnification out of the Fund's property for any
shareholder held personally liable for any Fund obligation. Thus, the risk of
loss to a shareholder

18
<PAGE>

from being held personally liable for obligations of the Fund is limited to the
unlikely circumstance in which the Fund itself would be unable to meet its
obligations.

CUSTODIAN AND TRANSFER AGENT. The custodian of the assets of the Fund is
State Street Bank and Trust Company, P.O. Box 8505, Boston, MA 02266-8505,
which also acts as transfer agent and shareholder servicing agent for the Fund.

CONTRACTOWNERS INQUIRIES. Inquiries concerning the purchase and sale of
shares of the Fund, dividends, account statements and management and investment
policies of the Fund should be directed to the respective life insurance
companies which use the Fund as an investment vehicle for their respective
variable annuity and life insurance contracts.

YEAR 2000 ISSUES. The management services provided to the Fund by the
Manager, and the services provided by the Transfer Agent to shareholders, depend
on the smooth functioning of their computer systems. Many computer software
systems in use today cannot recognize the year 2000, but revert to 1900 or some
other incorrect date, due to the manner in which dates were encoded and
calculated. That failure could have a negative impact on the handling of
securities trades, pricing and account services. Improperly functioning trading
systems may result in settlement problems and liquidity issues. In addition,
corporate and governmental data processing errors may result in production
problems for individual companies and overall economic uncertainties. Earnings
of individual issuers may be affected by remediation costs, which may be
substantial. The Manager and Transfer Agent have been actively working on
necessary changes to their own computer systems to deal with the year 2000 and
expect that their systems will be adapted before that date, but there can be no
assurance that they will be successful or that interaction with other
noncomplying computer systems will not impair their services at that time.

19
<PAGE>

APPENDIX

DESCRIPTION OF COMMERCIAL PAPER AND CORPORATE BOND RATINGS

COMMERCIAL PAPER RATINGS

Moody's commercial paper ratings are opinions of the ability of issuers to
repay promissory obligations when due. Moody's employs the following three
designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers: Prime 1 - Superior Ability for Repayment;
Prime 2 - Strong Ability for Repayment; Prime 3 - Acceptable Ability for
Repayment.

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment. Ratings are graded into four categories, ranging from "A" for
the highest quality obligations to "D" for the lowest. Issues assigned the
highest rating, "A", are regarded as having the greatest capacity for timely
payment. Issues in this category are delineated with the numbers "1", "2", and
"3" to indicate the relative degree of safety. The designation "A-1" indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong. The "A+" designation is applied to those issues rated "A-1" which
possess overwhelming safety characteristics. Capacity for timely payment on
issues with the designation "A-2" is strong. However, the relative degree of
safety is not as high as for issues designated "A-1."

Fitch's commercial paper ratings represent Fitch's assessment of the
issuer's ability to meet its obligations in a timely manner. The assessment
places emphasis on the existence of liquidity. Ratings range from "F-1+" which
represents exceptionally strong credit quality to "F-4" which represents weak
credit quality.

Duff's short-term ratings apply to all obligations with maturities of under
one year, including commercial paper, the uninsured portion of certificates of
deposit, unsecured bank loans, master notes, bankers acceptances, irrevocable
letters of credit and current maturities of long-term debt. Emphasis is placed
on liquidity. Ratings range for Duff 1+ for the highest quality to Duff 5 for
the lowest, issuers in default. Issues rated Duff 1+ are regarded as having the
highest certainty of timely payment. Issues rated Duff 1 are regarded as having
very high certainty of timely payment.

Thomson's BankWatch, Inc. assigns only one Issuer Rating to each company,
based upon a qualitative and quantitative analysis of the consolidated
financials of an issuer and its subsidiaries. The rating incorporates TBW's
opinion of the vulnerability of the company to adverse developments which may
impact the marketability of its securities, as well as the issuer's ability to
repay principal and interest. Ratings range from "TBW-1" for highest quality to
"TBW-3" for the lowest, companies with very serious problems.

BOND RATINGS

A bond rated "Aaa" by Moody's is judged to be the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is deemed secure.
While the various protective elements may change, such foreseeable changes are
unlikely to impair the fundamentally strong position of such issues. Bonds
which are rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as high
grade bonds. Margins of protection on "Aa" bonds may not be as large as on
"Aaa" securities or fluctuations of protective elements may be of greater
magnitude or there may be other elements present which make the long-term risks
appear somewhat larger than "Aaa" securities. Bonds which are rated "A" possess
many favorable investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a susceptibility
to impairment some time in the future. Bonds rated "Baa" are considered medium
grade obligations whose interest payments and principal security appear adequate
for the present but may lack certain protective elements or may be
characteristically unreliable over any great length of time. Moody's applies
numerical modifiers "1", "2" and "3" in each generic rating classification from
"Aa" through "B" in its corporate bond rating system. The modifier "1"
indicates that the security ranks in the higher end of its generic rating
category; the modifier "2" indicates a mid-

20
<PAGE>

range ranking; and the modifier "3" indicates that the issue ranks in the lower
end of its generic rating category. Bonds rated "Ba" are judged to have
speculative elements and bonds rated below "Ba" are speculative to a higher
degree.

Debt rated "AAA" by S&P has the highest rating assigned by it. Capacity to
pay interest and repay principal is extremely strong. Debt rated "AA" has a
strong capacity to pay interest and repay principal and differs from "AAA"
issues only in small degree. Debt rated "A" has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories. Debt
rated "BB" and below is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
Plus (+) and minus (-) signs are used with a rating symbol to indicate the
relative position within the category.

Debt rated "AAA", the highest rating by Fitch, is considered to be 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. Debt rated "AA" is regarded as very high credit quality.
The obligor's ability to pay interest and repay principal is very strong. Debt
rated "A" is of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than debt with higher
ratings. Debt rated "BBB" is of satisfactory credit quality. The obligor's
ability to pay interest and repay principal is adequate, however a change in
economic conditions may adversely affect timely payment. Plus (+) and minus (-)
signs are used with a rating symbol (except "AAA") to indicate the relative
position within the category.

Debt rated "AAA", the highest rating by Duff is considered to be of the
highest credit quality. The risk factors are negligible being only slightly
more than for risk-free U.S. Treasury debt. Debt rated "AA" is regarded as high
credit quality. Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. Debt rated "A" is
considered to have average but adequate protection factors. Bonds rated "BBB"
are considered to have below average protection factors but still sufficient for
prudent investment. Bonds rated "BB" and below are below investment grade and
possess fluctuating protection factors and risk. Plus (+) and minus (-) signs
are used with a rating symbol to indicate the relative position within the
category.

21
<PAGE>
OCC ACCUMULATION TRUST
One World Financial Center, New York, New York 10281

OCC ACCUMULATION TRUST (formerly known as Quest for Value Accumulation Trust,
the "Fund") is a registered open-end diversified management investment company
offering several investment alternatives. It permits an investor the
flexibility of choosing among different investment objectives, through the
following three Portfolios (the "Portfolios"), each of which is a separate
series of shares of beneficial interest of the Fund ("Shares"). The investment
objective of each Portfolio is as follows:

SMALL CAP PORTFOLIO: Capital appreciation through investment in a diversified
portfolio of equity securities of companies with market capitalizations of under
$1 billion.

GLOBAL EQUITY PORTFOLIO: Long term capital appreciation through a global
investment strategy primarily involving equity securities.

The Fund is an investment vehicle for variable annuity and variable life
insurance contracts of various life insurance companies, and qualified pension
and retirement plans ("Qualified Plans"). Shares of the Fund are currently sold
to variable accounts of various life insurance companies for the purpose of
funding variable annuity and variable life insurance contracts (the
"Contracts"). These variable accounts (the "Separate Accounts") invest in
Shares of the Fund in accordance with allocation instructions received from
owners (the "Contractowners") of the Contracts. Allocation rights are further
described in the accompanying prospectus for the Variable Accounts. The
Separate Accounts will redeem Shares to the extent necessary to provide benefits
under the Contracts.

It is possible, although not presently anticipated, that a material
conflict could arise between and among the various variable accounts which
invest in Shares of the Fund and the Qualified Plans, which may, in the future
invest in Shares of the Fund. Such conflict could cause the liquidation of
assets of one or more of the Fund Portfolios to raise cash at times not
otherwise deemed advantageous by the Fund Manager. See "Management of the
Fund," page 16.

OPCAP ADVISORS
Investment Manager
Prospectus dated May 1, 1998

<PAGE>

TABLE OF CONTENTS

Page
----
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . 9

Small Cap Portfolio . . . . . . . . . . . . . . . . . . . . 9

Global Equity Portfolio . . . . . . . . . . . . . . . . . .10

Managed Portfolio . . . . . . . . . . . . . . . . . . . . .10

Additional Information on Investment Objectives and Policies . . . . . . . .11

Investment Techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . .15

Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . .17

Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

State Law Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . .19

Calculation of Performance . . . . . . . . . . . . . . . . . . . . . . . . .19

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . .20

<PAGE>

PROSPECTUS SUMMARY

THE FUND The Fund is a Massachusetts business trust which issues
its shares in series as separate classes of shares of
beneficial interest. There are currently three series
available for investment through the Separate Accounts,
each of which is designated as a "Portfolio".
Together, the three Portfolios are designed to enable
investors to choose a number of investment alternatives
to achieve their financial goals and to shift assets
conveniently among Portfolios when and if their
investment aims or perception of the marketplace
change.

The Fund commenced operations on September 16, 1994
when an investment company then called Quest for Value
Accumulation Trust, with portfolios corresponding to
two of the current three available portfolios of the
Fund, was effectively divided into two investment
funds, the original investment company, whose name was
changed, and the Fund.

INVESTMENT OBJECTIVES
AND RESTRICTIONS The investment objective of each of the Portfolios is
set forth on the cover page of this Prospectus. These
objectives are described in more detail under the
heading "Investment Objectives and Policies." Although
each Portfolio will be actively managed by experienced
professionals, there can be no assurance that the
objectives will be achieved.

Market risk for fixed income securities is the risk
that interest rates will change, thereby affecting
their value. Generally, the value of fixed income
securities declines as interest rates rise, and
conversely, their value rises as interest rates
decline. The second type of risk, financial or credit
risk, is associated with the financial condition and
profitability of an individual equity or fixed income
issuer. The financial risk in owning equities is
related to earnings stability and overall financial
soundness of individual issuers and of issuers
collectively which are part of a particular industry.
For fixed income securities, credit risk relates to the
financial ability of an issuer to make periodic
interest payments and ultimately repay the principal at
maturity. (See "Additional Information on Investment
Objectives and Policies" for risk aspects of the
individual Portfolios).

INVESTMENT MANAGER OpCap Advisors (the "Manager"), the investment manager
of each of the Portfolios, is investment manager and
sub-adviser to several other registered investment
companies with assets under management of approximately
$18.3 billion at March 31, 1998 and is a subsidiary of
Oppenheimer Capital, a registered investment adviser,
which had assets under management, including those of
OpCap Advisors, of approximately $67.6 billion at March
31, 1998.

MANAGEMENT FEE The Manager receives a monthly fee from each Portfolio
at varying annual percentage rates of average daily net
assets, as follows: .80 percent on the first $400
million, .75 percent on the next $400 million and .70
percent thereafter of

3
<PAGE>

the average daily net assets for the Small Cap, Managed
and Global Equity Portfolios (see page 16).
PURCHASES AND
REDEMPTION OF SHARES Currently, shares of the Fund are sold at their net
asset value per share, without sales charge, for
allocation to the Separate Accounts as the underlying
investment for the Contracts. Accordingly, the
interest of the Contractowner with respect to the Fund
is subject to the terms of the Contract as described in
the accompanying Prospectus for the Separate Accounts,
which should be reviewed carefully by a person
considering the purchase of a Contract. That
Prospectus describes the relationship between increases
or decreases in the net asset value of Fund shares and
any distributions on such shares, and the benefits
provided under a Contract. The rights of the Separate
Accounts as shareholders of the Fund should be
distinguished from the rights of a Contractowner which
are described in the Contract. As long as shares of
the Fund are sold for allocation to the Separate
Accounts, the terms "shareholder" or "shareholders" in
this Prospectus shall refer to the Separate Accounts.
Shares are redeemed at their respective net asset
values as next determined after receipt of proper
notice of redemption.

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus, the Additional Statement, and the accompanying
Prospectus for the Separate Accounts.

<PAGE>

OCC ACCUMULATION TRUST

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1997, 1996 and 1995,
and for the period from September 16, 1994 through December 31, 1994 for the
Managed and Small Cap Portfolios; and for the years ended December 31, 1997 and
1996 and for the period from March 1, 1995 through December 31, 1995 for the
Global Equity Portfolio have been audited by Price Waterhouse LLP, independent
accountants, whose unqualified report thereon appears in the Additional
Statement (Part B). This information should be read in conjunction with the
financial statements and related notes thereto included in the Additional
Statement. Total return information for the Portfolios of the Fund provided in
the Financial Highlights does not include charges and deductions which are
imposed under the Contracts and described in the Prospectus for the Separate
Accounts. Inclusion of these charges and deductions would reduce the total
return of the Portfolios of the Fund. Further information about the performance
of each Portfolio is available in the Fund's Annual Report or semi-annual
report. Annual reports or semi-annual reports can be obtained without charge
upon written requests to the insurance companies issuing the Contracts.

5
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
Year ended December 31,
--------------------------- March 1, 1995 (1)
1997 1996 December 31, 1995
--------- -------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $13.23 $11.61 $10.00
----------- ----------- ---------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.06 0.04 0.05
Net realized and unrealized gain
on investments . . . . . . . . . . . . . . . . . . . . . . 1.79 1.70 1.83
----------- ----------- ---------
Total income from investment operations. . . . . . . . . . 1.85 1.74 1.88
----------- ----------- ---------

Dividends and distributions to shareholders
Dividends to shareholders from net investment income . . . . (0.04) (0.05) (0.03)
Distributions to shareholders in excess of
net investment income. . . . . . . . . . . . . . . . . . . (0.03) -- --
Distributions to shareholders from net realized gains. . . . (0.69) (0.07) (0.24)
----------- ----------- ---------

Total dividends and distributions to shareholders. . . . . (0.76) (0.12) (0.27)
----------- ----------- ---------
Net asset value, end of period . . . . . . . . . . . . . . . $14.32 $13.23 $11.61
----------- ----------- ---------
----------- ----------- ---------
Total return (2) . . . . . . . . . . . . . . . . . . . . . . 14.0% 15.0% 18.9%
----------- ----------- ---------
----------- ----------- ---------

Net assets, end of period. . . . . . . . . . . . . . . . . . $25,873,628 $16,972,488 $2,891,321
----------- ----------- ---------

Ratio of net operating expenses to average net assets (5,6). 1.19%(4) 1.42% 1.25%(3)
----------- ----------- ---------

Ratio of net investment income to average net assets (6) . . 0.45%(4) 0.81% 1.02%(3)
----------- ----------- ---------

Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 53% 40% 67%
----------- ----------- ---------
Average commission rate. . . . . . . . . . . . . . . . . . . $0.0253 $0.0254 --
----------- ------------ ----------
</TABLE>

- -------------------------------------------------------------------------------
(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $23,063,042.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1H in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income
(loss) to average net assets would have been 1.20% and 0.44%, respectively,
for the year ended December 31, 1997, 1.83% and 0.22%, respectively, for
the year ended December 31, 1996 and 3.94% and (1.67%), annualized,
respectively, for the period March 1, 1995 (commencement of operations) to
December 31, 1995.

Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.34 0.43 0.42 0.14
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . 7.45 6.31 9.02 (1.11)
------------ ------------ ------------ ------------
Total income from investment operations . . . . . . . . . 7.79 6.74 9.44 (0.97)
------------ ------------ ------------ ------------

Dividends and distributions to shareholders
Dividends to shareholders from
net investment income . . . . . . . . . . . . . . . . . . (0.40) (0.41) (0.13) --
Distributions to shareholders from
net realized gains. . . . . . . . . . . . . . . . . . . . (1.22) (0.26) -- --
------------ ------------ ------------ ------------
Total dividends and
distributions to shareholders. . . . . . . . . . . . . . . . (1.62) (0.67) (0.13) --
------------ ------------ ------------ ------------

Net asset value, end of period . . . . . . . . . . . . . . . $42.38 $36.21 $30.14 $20.83
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

Total return (2) . . . . . . . . . . . . . . . . . . . . . . 22.3% 22.8% 45.6% (4.4%)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

Net assets, end of period. . . . . . . . . . . . . . . . . . $466,791,224 $180,728,094 $99,188,147 $54,943,371
------------ ------------ ------------ ------------

Ratio of net operating expenses
to average net assets (5) . . . . . . . . . . . . . . . . 0.87%(4) 0.84%(6) 0.66%(6) 0.66%(3,6)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . . . 1.42%(4) 1.66%(6) 1.85%(6) 2.34%(3,6)
------------ ------------ ------------ ------------
Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 32% 27% 22% 8%
------------ ------------ ------------ ------------

Average commission rate. . . . . . . . . . . . . . . . . . . $0.0571 $0.0592 -- --
------------ ------------ ------------ ------------
</TABLE>

- -------------------------------------------------------------------------------
(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $290,421,930.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion of its fees.
If such waivers had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 0.85% and 1.65%, respectively, for the
year ended December 31, 1996, 0.74% and 1.77%, respectively, for the year
ended December 31, 1995 and 0.96% and 2.04%, annualized, respectively, for
the period September 16, 1994 (commencement of operations) to December 31,
1994.
7
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
------------ ------------ ------------ --------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . $22.61 $19.91 $17.38 $17.49
------------ ------------ ------------ ------------

Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . . . 0.08 0.14 0.26 0.06
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . . . 4.73 3.45 2.37 (0.17)
------------ ------------ ------------ ------------
Total income from investment operations. . . . . . . . . . 4.81 3.59 2.63 (0.11)
------------ ------------ ------------ ------------

Dividends and distributions to shareholders
Dividends to shareholders from
net investment income. . . . . . . . . . . . . . . . . . . (0.13) (0.25) (0.05) --
Distributions to shareholders from
net realized gains. . . . . . . . . . . . . . . . . . . . (0.92) (0.64) (0.05) --
------------ ------------ ------------ ------------
Total dividends and distributions to shareholders. . . . . (1.05) (0.89) (0.10) --
------------ ------------ ------------ ------------
Net asset value, end of period . . . . . . . . . . . . . . . $26.37 $22.61 $19.91 $17.38
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return (2) . . . . . . . . . . . . . . . . . . . . . . 22.2% 18.7% 15.2% (0.6%)
------------ ------------ ------------ ------------
Net assets, end of period. . . . . . . . . . . . . . . . . . $110,564,506 $34,256,671 $16,004,392 $9,210,443
------------ ------------ ------------ ------------

Ratio of net operating expenses
to average net assets (5) . . . . . . . . . . . . . . . . 0.97%(4) 0.93%(6) 0.74%(6) 0.74%(3,6)
------------ ------------ ------------ -----------

Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . . . 0.64%(4) 1.03%(6) 1.75%(6) 1.22%(3,6)
------------ ------------ ------------ ------------

Portfolio turnover rate. . . . . . . . . . . . . . . . . . . 68% 50% 69% 32%
------------ ------------ ------------ ------------

Average commission rate. . . . . . . . . . . . . . . . . . . $0.0549 $0.0493 -- --
------------ ------------ ------------ ------------
</TABLE>

- -------------------------------------------------------------------------------

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $62,297,759.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 1.01% and 0.92%, respectively, for the
year ended December 31, 1996, 0.99% and 1.50%, respectively, for the year
ended December 31, 1995 and 1.64% and 0.32%, annualized, respectively, for
the period September 16, 1994 (commencement of operations) to December 31,
1994.
8
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each Portfolio of the Fund are
described below. Investment objectives of each Portfolio are fundamental
policies which cannot be changed for any Portfolio without a majority vote of
the shareholders of that Portfolio; investment policies are not fundamental and
may be adjusted by the Manager at any time, usually in response to its
perception of developments in the securities markets. The extent to which a
Portfolio will be able to achieve its distinct investment objectives depends
upon the Manager's ability to evaluate and develop the information it receives
into a successful investment program. Although each Portfolio will be managed
by experienced professionals, there can be no assurance that any Portfolio will
achieve its investment objectives. The values of the securities held in each
Portfolio will fluctuate and the net asset value per share at the time shares
are redeemed may be more or less than the net asset value per share at the time
of purchase. Investors should also refer to "Investment Techniques" for
additional information concerning the investment techniques employed for some or
all of the Portfolios.

INVESTMENT OBJECTIVES OF THE FUND PORTFOLIOS

SMALL CAP PORTFOLIO

The investment objective of the Small Cap Portfolio is to seek capital
appreciation through investments in a diversified portfolio consisting primarily
of equity securities of companies with market capitalizations of under $1
billion. Smaller-capitalization companies are often under-priced for the
following reasons: (i) institutional investors, which currently represent a
majority of the trading volume in the shares of publicly-traded companies, are
often less interested in such companies because in order to acquire an equity
position that is large enough to be meaningful to an institutional investor,
such an investor may be required to buy a large percentage of the company's
outstanding equity securities and (ii) such companies may not be regularly
researched by stock analysts, thereby resulting in greater discrepancies in
valuation. The Portfolio may also purchase securities in initial public
offerings, or shortly after such offerings have been completed, when the Manager
believes that such securities have greater-than-average market appreciation
potential. Under normal circumstances at least 65 percent of the Portfolio's
assets will be invested in equity securities. The majority of securities
purchased by the Portfolio will be traded on the New York Stock Exchange (the
"NYSE"), the American Stock Exchange or in the over-the-counter market, and will
also include options, warrants, bonds, notes and debentures which are
convertible into or exchangeable for, or which grant a right to purchase or
sell, such securities. In addition, the Portfolio may also purchase foreign
securities provided that they are listed on a domestic or foreign securities
exchange or are represented by American depository receipts listed on a domestic
securities exchange or traded in domestic or foreign over-the-counter markets.
The Small Cap Portfolio is managed by Timothy McCormack, Senior Vice President
of Oppenheimer Capital and Timothy Curro and Gavin Albert, both of whom are Vice
Presidents of Oppenheimer Capital. Mr. McCormack became a portfolio manager of
the Portfolio in May 1996. He joined Oppenheimer Capital in 1994. From March
1993 to July 1994 Mr. McCormack was a security analyst at U.S. Trust Company and
prior to that he was a securities analyst with Gabelli and Company. He has a
Masters of Business Administration degree from the Wharton School. Timothy
Curro and Gavin Albert became portfolio managers of the Portfolio on January 1,
1997. Mr. Curro has been a Vice President of Oppenheimer Capital since November
1996. Prior thereto, he was a general partner of Value Holdings, L.P., an
investment partnership, from May 1995 to November 1996, a Vice President in the
equity research department at UBS Securities Inc. from June 1994 through May
1995 and from January 1991 through February 1993 and was a partner with Omega
Advisors, Inc. from March 1993 to March 1994. He has a Masters of Business
Administration degree from the University of California, Berkeley. Mr. Albert,
Vice President of Oppenheimer Capital since December 1996, joined the firm in
September 1994 as a research analyst. Prior thereto he was a management
consultant for EDS Energy Management in 1994, attended the Vanderbilt University
Business School from September 1992 to May 1994 (with a Masters of Business
Administration degree in finance and management) and was a financial analyst in
the Corporate Finance department of Texaco, Inc. from 1990 to 1992.

<PAGE>

GLOBAL EQUITY PORTFOLIO

The investment objective of the Global Equity Portfolio is to seek long
term capital appreciation through pursuit of a global investment strategy
primarily involving equity securities. The Portfolio may invest anywhere in the
world with no requirement that any specific percentage of its assets be
committed to any given country. Under normal circumstances, at least 65 percent
of the Portfolio's total assets will be invested in equity securities in at
least three different countries, one of which may be the United States.
Opportunities for capital appreciation may also be presented by debt
securities. The Portfolio may invest up to 35 percent of its total assets in
debt obligations with remaining maturities of one year or more of U.S. or
foreign corporate, governmental or bank issuers. It is the present intention
of the Portfolio, although not a fundamental policy, not to invest more than
5 percent of its total assets in debt securities rated below investment-grade.
Although there is no minimum rating for this category of debt investments of
the Portfolio, the Portfolio does not intend to invest in bonds which are in
default. Domestic investments of this Portfolio are managed by Richard J.
Glasebrook II, Managing Director of Oppenheimer Capital. He joined Oppenheimer
Capital in 1991. From 1983 to 1991, he was a partner with Delafield Asset
Management and from 1974 to 1970 he was a portfolio manager and analyst with
Morgan Guaranty Trust Co. Mr. Glasebrook graduated with a BA from Kenyon
College and received an MBA from the Harvard Graduate School of Business
Administration. The Portfolio's investments in foreign securities are managed
by Pierre Daviron, President and Chief Investment Officer of Oppenheimer Capital
International, a division of Oppenheimer Capital created in 1993 and Managing
Director of Oppenheimer Capital. Previously, he was Chairman and Chief
Executive Officer at Indosuez Gartmore Asset Management, a division of Banque
Indosuez, Paris, France. Prior thereto he was a Managing Director in Mergers
and Acquisitions at J.P. Morgan. Mr. Daviron is a graduate of Hautes Etudes
Commerciales in Paris.

MANAGED PORTFOLIO

The investment objective of the Managed Portfolio is to achieve growth of
capital over time through investment in a portfolio consisting of common stocks,
bonds and cash equivalents, the percentages of which will vary based on the
Manager's assessments of the relative outlook for such investments. In seeking
to achieve its investment objective, the types of equity securities in which the
Portfolio may invest are likely to be the same as those in which the Equity
Portfolio invests, although securities of the type in which the Small Cap
Portfolio invests may, to a lesser extent, be included. Debt securities are
expected to be predominantly investment grade intermediate to long term U.S.
Government and corporate debt, although the Portfolio will also invest in high
quality short term money market and cash equivalent securities and may invest
almost all of its assets in such securities when the Manager deems it advisable
in order to preserve capital. In addition, the Portfolio may also purchase
foreign securities provided that they are listed on a domestic or foreign
securities exchange or are represented by American depository receipts listed on
a domestic securities exchange or traded in domestic or foreign over-the-counter
markets.

The allocation of the Portfolio's assets among the different types of
permitted investments will vary from time to time based upon the Manager's
evaluation of economic and market trends and its perception of the relative
values available from such types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Portfolio's assets that may,
at any given time, be invested in any of the types of investments identified
above. Consequently, while the Portfolio will earn income to the extent it is
invested in bonds or cash equivalents, the Portfolio does not have any specific
income objective. Although there is neither a minimum nor maximum percentage of
the Portfolio's assets that may, at any given time, be invested in any of the
types of investments identified above, it is anticipated that most of the time
the majority of the Portfolio's assets will be invested in common stocks. The
investments of the Managed Portfolio are managed by Richard J. Glasebrook II,
Managing Director of Oppenheimer Capital.

<PAGE>

ADDITIONAL INFORMATION ON INVESTMENT OBJECTIVES AND POLICIES

For the Small Cap and the Global Equity Portfolios, at times when the
investment climate is viewed as favorable, common stocks will be heavily
emphasized. Under normal circumstances, at least 65 percent of each Portfolio's
assets will be invested in common stocks or securities convertible into common
stocks.

In the event that future economic or financial conditions adversely affect
equity securities, or stocks are considered overvalued, each of the Small Cap
and Global Equity Portfolios may invest a substantial portion of its assets in
debt securities, with an emphasis on money market instruments or cash and cash
equivalents.

Regulations under Section 817(h) of the Internal Revenue Code ("IRC
817(h)") require each Portfolio to diversify its investments. To comply with
these regulations each Portfolio is required to diversify its investments so
that on the last day of each quarter of a calendar year no more than 55 percent
of the value of its total assets is represented by any one investment, no more
than 70 percent is represented by any two investments, no more than 80 percent
is represented by any three investments, and no more than 90 percent is
represented by any four investments. For this purpose, securities of a given
issuer generally are treated as one investment, but each U.S. Government agency
and instrumentality is treated as a separate and distinct issuer. As such, any
security issued, guaranteed, or insured (to the extent so guaranteed or insured)
by the U.S. or an agency or instrumentality of the U.S. is treated as a security
issued by the U.S. Government or its agency or instrumentality, whichever is
applicable. These diversification rules limit the amount that any Portfolio can
invest in any single issuer, including direct obligations of the U.S. Treasury,
to 55 percent of the Portfolio's total assets at the end of any calendar
quarter.

MANAGEMENT OF ASSETS

The Manager intends to manage each Portfolio's assets by buying and selling
securities to help attain its investment objective. This may result in
increases or decreases in a Portfolio's current income available for
distribution to its shareholders. While none of the Portfolios is managed with
the intent of generating short-term capital gains, each of the Portfolios may
dispose of investments (including money market instruments) regardless of the
holding period if, in the opinion of the Manager, an issuer's creditworthiness
or perceived changes in a company's growth prospects or asset value make selling
them advisable. Such an investment decision may result in capital gains or
losses and could result in a high portfolio turnover rate during a given period,
resulting in increased transaction costs related to equity securities.
Disposing of debt securities in these circumstances should not increase direct
transaction costs since debt securities are normally traded on a principal basis
without brokerage commissions. However, such transactions do involve a mark-up
or mark-down of the price.

During periods of unusual market conditions when the Manager believes that
investing for defensive purposes is appropriate, or in order to meet anticipated
redemption requests, part or all of the assets of one or more of the Portfolios
may be invested in cash or cash equivalents including obligations listed above.

RISK ASPECTS OF THE INDIVIDUAL PORTFOLIOS

11
<PAGE>
securities, such securities, while similar to other fixed-income securities,
involve the additional risk of prepayment because mortgage prepayments are
passed through to the holder of the mortgage-backed security and must be
reinvested. Prepayments of mortgage principal reduce the stream of future
payments and generate cash which must be reinvested. When interest rates fall,
prepayments tend to rise. As such these Portfolios may have to reinvest that
portion of their respective assets invested in such securities more frequently
when interest rates are low than when interest rates are high.

SMALL CAP PORTFOLIO. The Small Cap Portfolio is expected to have greater
risk exposure and reward potential than a portfolio which invests primarily in
larger-capitalization companies. The trading volumes of securities of
smaller-capitalization companies are normally less than those of
larger-capitalization companies. This often translates into greater price
swings, both upward and downward. The waiting period for the achievement of an
investor's objectives might be longer since these securities are not closely
monitored by research analysts and, thus, it takes more time for investors to
become aware of fundamental changes or other factors which have motivated the
Portfolio's purchase. Smaller-capitalization companies often achieve higher
growth rates and experience higher failure rates than do larger-capitalization
companies.

ADDITIONAL RISKS OF FOREIGN SECURITIES: The Global Equity, Small Cap and
Managed Portfolios may purchase foreign securities that are listed on a domestic
or foreign securities exchange, traded in domestic or foreign over-the counter
markets or represented by American Depository Receipts. There is no limit to
the amount of such foreign securities the Portfolios may acquire. It will be
the general practice of the Global Equity Portfolio to invest in foreign equity
securities. Certain factors and risks are presented by investment in foreign
securities which are in addition to the usual risks inherent in domestic
securities. Foreign companies are not necessarily subject to uniform
accounting, auditing and financial reporting standards or other regulatory
requirements comparable to those applicable to U.S. companies. Thus, there may
be less available information concerning non-U.S. issuers of securities held by
a Portfolio than is available concerning U.S. companies. In addition, with
respect to some foreign countries, there is the possibility of nationalization,
expropriation or confiscatory taxation; income earned in the foreign nation
being subject to taxation, including withholding taxes on interest and
dividends, or other taxes imposed with respect to investments in the foreign
nation; limitations on the removal of securities, property or other assets of a
fund; difficulties in pursuing legal remedies and obtaining judgments in foreign
courts, or political or social instability or diplomatic developments which
could affect U.S. investments in those countries. For a description of the
risks of possible losses through holding of securities in foreign custodian
banks and depositories, see "Investment of Assets" in the Additional Statement.

Securities of many non-U.S. companies may be less liquid and their prices
more volatile than securities of comparable U.S. companies. Non-U.S. stock
exchanges and brokers are generally subject to less governmental supervision and
regulation than in the U.S. and commissions on foreign stock exchanges are
generally higher than negotiated commissions on U.S. transactions. In addition,
there may in certain instances be delays in the settlement of non-U.S. stock
exchange transactions. Certain countries restrict foreign investments in their
securities markets. These restrictions may limit or preclude investment in
certain countries, industries or market sectors, or may increase the cost of
investing in securities of particular companies. Purchasing the shares of
investment companies which invest in securities of a given country may be the
only or the most efficient way to invest in that country. This may require the
payment of a premium above the net asset value of such investment companies and
the return will be reduced by the operating expenses of those investment
companies.

A decline in the value of the U.S. dollar against the value of any
particular currency will cause an increase in the U.S. dollar value of a
Portfolio's holdings denominated in such currency. Conversely, a decline in the
value of any particular currency against the U.S. dollar will cause a decline in
the U.S. dollar value of the Portfolio's holdings of securities denominated in
such currency. Some foreign currency values may be volatile and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets which could adversely affect a Portfolio. The
Portfolios do not intend to speculate in foreign currency in connection with the
purchase or sale of securities on a foreign securities exchange but may enter
into foreign currency contracts to hedge their foreign currency exposure. While
those transactions may minimize the impact of currency appreciation and
depreciation, the Portfolios will bear a cost for entering into the transaction
and such transactions do not protect against a decline in the security's value
relative to other securities denominated in that currency.

12
<PAGE>

It is expected that the Global Equity Portfolio will invest in American
Depository Receipts ("ADRs"),European Depository Receipts ("EDRs"), or Global
Depository Receipts ("GDRs") which are sponsored by persons other than the
underlying issuers. ADRs are U.S. dollar-denominated securities designed for
use in the U.S. securities markets. They represent and may be converted into
the underlying foreign security. EDRs are designed for use in the European
securities market. Issuers of the stock of such unsponsored ADRs are not
obligated to disclose material information in the United States and, therefore,
there may not be a correlation between such information and the market value of
such ADRs.

EMERGING MARKET COUNTRIES: Certain developing countries may have relatively
unstable governments, economies based on only a few industries that are
dependent upon international trade and reduced secondary market liquidity.
Foreign investment in certain emerging market countries is restricted or
controlled in varying degrees. In the past, securities in these countries have
experienced greater price movement, both positive and negative, than securities
of companies located in developed countries. Lower-rated high-yielding emerging
market securities may be considered to have speculative elements.

HIGH YIELD SECURITIES: It is the present intention of the Manager with
respect to each of the Small Cap, Global Equity and Managed Portfolios to
invest no more than 5 percent of its net assets in bonds rated below Baa3 by
Moody's or BBB- by S&P (commonly known as "junk bonds"). In the event that the
Manager intends in the future to invest more than 5 percent of the net assets of
any such Portfolio in junk bonds, appropriate disclosures will be made to
existing and prospective shareholders. For information about the possible risks
of investing in junk bonds see "Investment of Assets" in the Additional
Statement.

OPTIONS AND FUTURES: To the extent permitted by applicable state law, the
Global Equity and Small Cap Portfolios may engage in futures contracts and
options on futures contracts for bona fide hedging or other non-speculative
purposes. The Global Equity and Small Cap Portfolios may also engage in options
on stock indices. The Small Cap Portfolio may write covered call options on
individual securities. These Portfolios will not enter into any leveraged
futures transactions. Different uses of futures and options have different risk
and return characteristics. Generally, selling futures contracts, purchasing
put options and writing call options are strategies designed to protect against
falling security prices and can limit potential gains if prices rise.
Purchasing futures contracts, purchasing call options and writing put options
are strategies whose returns tend to rise and fall together with securities
prices and can cause losses if prices fall. If securities prices remain
unchanged over time, option writing strategies tend to be profitable while
option buying strategies tend to be unprofitable. For more information about
Options and Futures see "Investment Techniques" in this Prospectus and
"Investment of Assets" in the Additional Statement.

INVESTMENT TECHNIQUES

The investment techniques or instruments described below are used for the
Portfolios' investment programs:

SHORT-TERM INVESTMENTS. Each Portfolio typically invests a part of its
assets in various types of U.S. Government securities and high quality,
short-term debt securities with remaining maturities of one year or less ("money
market instruments"). This type of short-term investment is made to provide
liquidity for the purchase of new investments and to effect redemptions of
shares. The money market instruments in which each Portfolio may invest include
government obligations, certificates of deposit, bankers' acceptances,
commercial paper, short-term corporate securities and repurchase agreements.

13
<PAGE>

Under each repurchase agreement the selling institution will be required to
maintain as collateral securities whose market value is at least equal to the
repurchase price. Repurchase agreements could involve certain risks in the
event of default or insolvency of the selling institution, including costs of
disposing of securities held as collateral and any loss resulting from delays or
restrictions upon the Portfolio's ability to dispose of securities. Pursuant to
guidelines established by the Portfolio's Board of Trustees, the Manager
considers the creditworthiness of those banks and non-bank dealers with which a
Portfolio enters into repurchase agreements and monitors on an ongoing basis the
value of securities held as collateral to ensure that such value is maintained
at the required level. A Portfolio will not enter into a repurchase agreement
with a dealer if the agreement has a maturity beyond seven days. The staff of
the SEC has taken the position that repurchase agreements are loans
collateralized by the underlying securities.

LOANS OF PORTFOLIO SECURITIES. Each Portfolio may lend its portfolio
securities if such loans are secured continuously by collateral (cash, U.S.
Government or agency obligations or letters of credit) maintained on a daily
basis in an amount at least equal at all times to the market value of the
securities loaned and if the Portfolio does not incur any fees (other than the
transaction fees of its custodian bank) in connection with such loans. A
Portfolio may call the loan at any time on five days' notice and reacquire the
loaned securities. During the loan period, the Portfolio would continue to
receive the equivalent of the interest paid by the issuer on the securities
loaned and would also have the right to receive the interest on investment of
the cash collateral in short-term debt instruments. A portion of either or both
kinds of such interest may be paid to the borrower of such securities. It is
not intended that the value of the securities loaned, if any, would exceed 10
percent of the value of the total assets of the Small Cap and Managed Portfolios
and 33 1/3 percent of the value of the total assets of the Global Equity
Portfolio. Securities loans must also meet applicable tests under the Internal
Revenue Code. A Portfolio could experience various costs or loss if a borrower
defaults on its obligation to return the borrowed securities.

OPTIONS AND FUTURES. To the extent permitted by applicable state law, the
Global Equity and Small Cap Portfolios may engage in options and futures
transactions. The Global Equity Portfolio may purchase and sell financial
futures contracts (including bond futures contracts and index futures
contracts), forward foreign currency contracts, foreign currency futures
contracts, options on futures contracts and stock indices and options on
currencies for bona fide hedging or other non-speculative purposes. The Small
Cap Portfolio may engage in futures contracts or options on futures contracts
for bona fide hedging or other non-speculative purposes and to write calls on
individual securities. The Small Cap and Managed Portfolios may also enter into
forward foreign currency contracts to purchase or sell foreign currencies in
connection with any transactions in foreign securities. The Small Cap Portfolio
may also engage in options on stock indices. When any of such Portfolios
anticipate a significant market or market sector advance, the purchase of a
futures contract affords a hedge against not participating in the advance at a
time when such Portfolio is not fully invested ("anticipatory hedge"). Such a
purchase of a futures contract would serve as a temporary substitute for the
purchase of individual securities, which then may be purchased in an orderly
fashion once the market has stabilized. As individual securities are purchased,
an equivalent amount of futures contracts could be terminated by offsetting
sales. The Portfolios may sell futures contracts in anticipation of or in a
general market or market sector decline that may adversely affect the market
value of such Portfolio's securities ("defensive hedge"). To the extent that
the Portfolios' securities change in value in correlation with the underlying
security or index, the sale of futures contracts would substantially reduce the
risk to the Portfolios of a market decline and by so doing, provide an
alternative to the liquidation of securities positions in the Portfolios with
attendant transaction costs. So long as the Commodities Futures Trading
Commission rules so require, none of the Portfolios will enter into any
financial futures or options contract unless such transactions are for bona fide
hedging purposes, or for other purposes only if the aggregate initial margins
and premiums required to establish such non-hedging positions would not exceed 5
percent of the liquidation value of such Portfolio's assets. When writing put
options, the Fund, on behalf of the Portfolio, will maintain in a segregated
account at its Custodian liquid assets with a value equal to at least the
exercise price of the option to secure its obligation to pay for the underlying
security. As a result, such Portfolio forgoes the opportunity of trading the
segregated assets or writing calls against those assets. There may not be a
complete correlation between the price of options and futures and the market
prices of the underlying securities. The Portfolio may lose the ability to
profit from an increase in the market value of the underlying security or may
lose its premium payment. If due to a lack of a market a Portfolio could not
effect a closing purchase transaction with respect to an OTC option, it would
have to hold the callable securities until the call lapsed or was exercised.

14
<PAGE>

The average life of these securities varies with the maturities of the
underlying mortgage instruments (generally up to 30 years) and with the extent
of prepayments on the mortgages themselves. Any such prepayments are passed
through to the certificate holder, reducing the stream of future payments.
Prepayments tend to rise in periods of falling interest rates, decreasing the
average life of the certificate and generating cash which must be invested in a
lower interest rate environment. This could also limit the appreciation
potential of the certificates when compared to similar debt obligations which
may not be paid down at will, and could cause losses on certificates purchased
at a premium or gains on certificates purchased at a discount. Ginnie Mae
certificates represent pools of mortgages insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by the Veteran's
Administration. The guarantee of payments under these certificates is backed by
the full faith and credit of the United States. Fannie Mae is a
government-sponsored corporation owned entirely by private stockholders. The
guarantee of payments under these instruments is that of Fannie Mae only. They
are not backed by the full faith and credit of the United States but the U.S.
Treasury may extend credit to Fannie Mae through discretionary purchases of its
securities. The U.S. Government has no obligation to assume the liabilities of
Fannie Mae. Freddie Mac is a corporate instrumentality of the United States
government whose stock is owned by the Federal Home Loan Banks. Certificates
issued by Freddie Mac represent interest in mortgages from its portfolio.
Freddie Mac guarantees payments under its certificates but this guarantee is not
backed by the full faith and credit of the United States and Freddie Mac does
not have authority to borrow from the U.S. Treasury.

The coupon rate of these instruments is lower than the interest rate on the
underlying mortgages by the amount of fees paid to the issuing agencies, usually
approximately 1/2 of 1 percent. It is not anticipated that the Portfolios'
investments will have any particular maturity. Mortgage-backed securities, due
to the scheduled periodic repayment of principal, and the possibility of
accelerated repayment of underlying mortgage obligations, fluctuate in value in
a different manner than other, non-redeemable debt securities. The Managed
Portfolio also may invest in "collateralized mortgage obligations" ("CMO's")
which are debt obligations secured by mortgage-backed securities where the
investor looks only to the issuer of the security for payment of principal and
interest.

PORTFOLIO TRANSACTIONS. The Manager's primary consideration when executing
security transactions with broker-dealers is to obtain, and maintain the
availability of, execution at the most favorable prices and in the most
effective manner possible. The Manager may select CIBC Oppenheimer Corp. ("CIBC
Oppenheimer"), a former affiliate of the Manager, to execute transactions for
the Portfolios. Selection of broker-dealers to execute portfolio transactions
must be done in a manner consistent with the foregoing primary consideration,
the "Rules of Fair Practice" of the National Association of Securities Dealers,
Inc. and such other policies as the Board of Trustees may determine. (For a
further discussion of portfolio trading, see the Additional Statement,
"Investment Management and Other Services.")

INVESTMENT RESTRICTIONS

Each Portfolio is subject to certain investment restrictions which,
together with its investment objective, are fundamental policies changeable only
by shareholder vote. (The restrictions in 1, 2 and 3 do not apply to U.S.
Government securities.) Under some of those restrictions, each Portfolio may
not:

1. Invest more than 5 percent of the value of its total assets in the
securities of any one issuer, or purchase more than 10 percent of the voting
securities, or more than 10 percent of any class of security, of any issuer (for
this purpose all outstanding debt securities of an issuer are considered as one
class and all preferred stock of an issuer are considered as one class).

<PAGE>

2. Concentrate its investments in any particular industry, but if deemed
appropriate for attaining its investment objective, a Portfolio may invest up to
25 percent of its total assets (valued at the time of investment) in any one
industry classification used by that Portfolio for investment purposes.

3. Invest more than 5 percent of the value of its total assets in
securities of issuers having a record, together with predecessors, of less than
three years of continuous operation.

4. Make loans, except through the purchase of U.S. Government securities
and corporate debt obligations, repurchase agreements or lending portfolio
securities as described above under "Loans of Portfolio Securities".

5. Borrow money in excess of 10 percent of the value of its total assets.
It may borrow only as a temporary measure for extraordinary or emergency
purposes and will make no additional investments while such borrowings exceed 5
percent of the total assets. Such prohibition against borrowing does not
prohibit escrow or other collateral or margin arrangements in connection with
the hedging instruments which a Portfolio is permitted to use by any of its
other fundamental policies.

6. Invest more than 15 percent of its assets in illiquid securities
(securities for which market quotations are not readily available) and
repurchase agreements which have a maturity of longer than seven days. Other
investment restrictions are described in the Additional Statement.

All percentage limitations apply immediately after a purchase or initial
investment and any subsequent change in any applicable percentage resulting from
market fluctuations or other changes in the amount of total assets does not
require elimination of any security from a Portfolio.

MANAGEMENT OF THE FUND

The Fund's Board of Trustees has overall responsibility for the management
of the Fund under the laws of Massachusetts governing the responsibilities of
trustees of a Massachusetts business trust. In general, such responsibilities
are comparable to those of directors of a Massachusetts business corporation.
The Board of Trustees of the Fund has undertaken to monitor the Fund for the
existence of any material irreconcilable conflict between the interests of
variable annuity Contractowners, variable life insurance Contractowners and
Qualified Plans due to the difference of tax treatment and other considerations,
and shall report any such conflict to the boards of the respective life
insurance companies which use the Fund as an investment vehicle for their
respective variable annuity and life insurance contracts and to the Qualified
Plans. The Boards of Directors of those life insurance companies and the
Manager have agreed to be responsible for reporting any potential or existing
conflicts to the Trustees of the Fund. If a material irreconcilable conflict
exists that affects those life insurance companies, those life insurance
companies have agreed, at their own cost, to remedy such conflict up to and
including establishing a new registered management investment company and
segregating the assets underlying the variable annuity contracts and the
variable life insurance contracts. Qualified Plans which acquire more than 10
percent of the assets of the Fund will be required to report any potential or
existing conflicts to the Trustees of the Fund, and if a material irreconcilable
conflict exists, to remedy such conflict, up to and including redeeming Shares
of the Portfolios held by the Qualified Plans. The Additional Statement
contains information about the Trustees and Officers.

THE ADVISORY AGREEMENT. The Manager is responsible for management of the
Fund's business. Pursuant to the investment advisory agreement (the "Advisory
Agreement") with the Fund, and subject to the authority of the Board of
Trustees, the Manager supervises the investment operations of each Portfolio,
furnishes advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities and provides certain
administrative services for the Fund.

<PAGE>

Under the Advisory Agreement, each Portfolio is responsible for bearing
organizational expenses, taxes and governmental fees; brokerage commissions,
interest and other expenses incurred in acquiring and disposing of portfolio
securities; trustees fees, out of pocket travel expenses and other expenses for
trustees who are not interested persons; legal, accounting and audit expenses;
custodian, dividend disbursing and transfer agent fees; and other expenses not
expressly assumed by the Manager under the Advisory Agreement, which is
discussed below. The Manager will reimburse the Fund such that the total
operating expenses (net of any expense offsets) of the Global Equity Portfolio
of the Fund do not exceed 1.25 percent of its average daily net assets and so
that the total operating expenses (net of any expense offsets) of each of the
other Portfolios of the Fund do not exceed 1.00% of their respective average
daily net assets.

The Manager is a subsidiary of Oppenheimer Capital, a registered investment
adviser with approximately $67.6 billion in assets under management on March 31,
1998. All investment management services performed under the Advisory Agreement
are performed by employees of Oppenheimer Capital. On November 4, 1997, PIMCO
Advisors L.P. ("PIMCO Advisors"), a registered investment adviser, and its
affiliates acquired control of Oppenheimer Capital and its subsidiary OpCap
Advisors, the Manager of the Fund. PIMCO Advisors and its affiliates (not
including Oppenheimer Capital) had $145.5 billion in assets under management on
February 28, 1998. A new Advisory Agreement (on identical terms as the previous
Advisory Agreement) between the Fund and OpCap Advisors became effective
November 5, 1997. The new Advisory Agreement was approved by the shareholders
of each Portfolio of the Fund at a Special Meeting of Shareholders held on
October 14, 1997. On November 30, 1997, Oppenheimer Capital merged with a
subsidiary of PIMCO Advisors and, as a result, Oppenheimer Capital and OpCap
Advisors became indirect wholly-owned subsidiaries of PIMCO Advisors. PIMCO
Advisors has two general partners: PIMCO Partners, G.P. ("PIMCO G.P.") a
California general partnership, and PIMCO Advisors Holdings L.P. (formerly
Oppenheimer Capital, L.P.), an NYSE-listed Delaware limited partnership of which
PIMCO G.P. is the sole general partner. PIMCO GP beneficially owns or controls
(through its general partner interest in PIMCO Advisors Holdings, L.P.,
formerly Oppenheimer Capital, L.P.) greater than 80% of the units of limited
partnership ("Units") of PIMCO Advisors. PIMCO GP has two general partners.
The first of these is PIMCO Holding LLC, a Delaware limited liability company
and an indirect wholly-owned subsidiary of Pacific Life Insurance Company
("Pacific Life"). The managing general partner of PIMCO GP is PIMCO Partners
L.L.C. ("PPLLC"), a California limited liability company. PPLLC's members are
the Managing Directors (the "PIMCO Managers") of Pacific Investment Management
Company, a subsidiary of PIMCO Advisors (the "PIMCO Subpartnership"). The PIMCO
Managers are: William H. Gross, Dean S. Meiling, James F. Muzzy, William F.
Podlich, III, Brent R. Harris, John L. Hague, William S. Thompson Jr., William
S. Powers, David H. Edington, Benjamin Trosky, William R. Benz, II and Lee R.
Thomas, III. PIMCO Advisors is governed by a Management Board, which consists
of sixteen members, pursuant to a delegation by its general partners. PIMCO GP
has the power to designate up to nine members of the Management Board and the
PIMCO Subpartnership, of which the PIMCO Managers are the Managing Directors,
has the power to designate up to two members. In addition, PIMCO GP, as the
controlling general partner of PIMCO Advisors, has the power to revoke the
delegation to the Management Board and exercise control of PIMCO Advisors. As a
result, Pacific Life and/or the PIMCO Managers may be deemed to control PIMCO
Advisors. Pacific Life and the PIMCO Managers disclaim such control. Because
of direct or indirect power to appoint 25% of the members of the Equity Board,
(i) Pacific Life and (ii) the PIMCO Managers and/or the PIMCO Subpartnership may
each be deemed, under applicable provisions of the Investment Company Act, to
control PIMCO Advisors. Pacific Life, the PIMCO Subpartnership and the PIMCO
Managers disclaim such control. The Additional Statement contains more
information about the Advisory Agreement, including a more complete description
of the management fee and expense arrangements, exculpation provisions and
portfolio transactions for the Fund.

DETERMINATION OF NET ASSET VALUE

<PAGE>

in general, those valuations are based on market value, with special provisions
for (i) securities (including restricted securities) not having
readily-available market quotations and (ii) short-term debt securities.
Securities listed on a national securities exchange or designated as national
market system securities are valued at the last sale price or, if there has been
no sale that day or on the previous day on which the exchange was open (if a
week has not elapsed between such days), at the last bid price. Debt and equity
securities actively traded in the over-the-counter market but not designated as
national market system securities are valued at the most recent bid price.
Valuations may be provided by a pricing service or from independent securities
dealers. Short-term investments with remaining maturities of less than 60 days
are valued at amortized cost so long as the Fund's Board of Trustees determines
in good faith that such method reflects fair value. Other securities are valued
by methods that the Fund's Board of Trustees believes accurately reflect fair
value.

PURCHASE OF SHARES

REDEMPTION OF SHARES

STATE LAW RESTRICTIONS

<PAGE>

restrictions applicable to the separate accounts of the life insurance companies
offering the Contracts, see the Prospectus for the Separate Accounts.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Portfolio intends to distribute substantially all of its net
investment income and any net realized capital gains. Dividends from net
investment income and any distributions of realized capital gains will be paid
in additional shares of the Portfolio paying the dividend or making the
distribution and credited to the shareholder's account unless the shareholder
elects to receive such dividends or distributions in cash.

SMALL CAP, GLOBAL EQUITY AND MANAGED PORTFOLIOS. Dividends from net
investment income, if any, on the Small Cap, Global Equity and Managed
Portfolios will be declared and paid at least annually, and any net realized
capital gains, if any, will be declared and paid at least once per calendar
year.

TAXES. Because the Fund intends to distribute all of the net investment
income and capital gains of each Portfolio and otherwise qualify each Portfolio
as a regulated investment company under Subchapter M of the Internal Revenue
Code, it is not expected that any Portfolio of the Fund will be required to pay
any federal income tax on such income and capital gains. Since the Variable
Accounts and the Qualified Plans are the sole shareholders of the Fund, no
discussion is presented herein as to the federal income tax consequences at the
shareholder level. For information concerning the federal income tax
consequences to contractowners, see the Prospectus for the Separate Accounts.

CALCULATION OF PERFORMANCE

From time to time the performance of one or more of the Portfolios may be
advertised. The performance data contained in these advertisements is based
upon historical earnings and is not indicative of future performance. The data
for each Portfolio reflects the results of that Portfolio of the Fund and
recurring charges and deductions borne by or imposed on the Portfolio. As the
performance for any Portfolio does not include charges and deductions under the
Contracts, comparisons with other portfolios used in connection with different
variable accounts may not be useful. Set forth below for each Portfolio is the
manner in which the data contained in such advertisements will be calculated as
well as performance information for the Portfolios as indicated below. This
performance information does not include charges and deductions which are
imposed under the Contracts and described in the Prospectus for the Separate
Accounts.

AVERAGE ANNUAL TOTAL RETURN OF MANAGED, SMALL CAP AND GLOBAL EQUITY
PORTFOLIOS OF OCC ACCUMULATION TRUST(1,2)

<TABLE>
For the one year For the five year For the period from
period ended period ended inception to
Portfolio December 31, 1997 December 31, 1997 December 31, 1997*
- --------- ---------------- ----------------- ------------------
<S> <C> <C> <C>

Managed 22.29% 19.86% 20.32%
Small Cap 22.24% 14.61% 15.45%
Global Equity 14.02% N/A 16.91%
</TABLE>

*Inception date of the Global Equity Portfolio is March 1, 1995. The
Managed and Small Cap Portfolios commenced operations as part of the Fund on
September 16, 1994. The Old Trust commenced operations on August 1, 1988.

<PAGE>

transaction were $139,812,573 and $682,601,380, respectively, with respect to
the Old Trust and for each of the Small Cap and Managed Portfolios, $8,129,274
and $51,345,102 respectively, with respect to the Fund.

For the period prior to September 16, 1994, the performance figures above
for each of the Small Cap and Managed Portfolios reflect the performance of the
corresponding Portfolios of the Old Trust.

(2)Reflects waivers of all or a portion of the advisory fees and
reimbursement of other expenses for certain Portfolios by the Manager. Without
such waivers and reimbursements, the average annual total return during the
periods would have been lower.

In addition, reference in advertisements may be made to various indices,
including, without limitation, the S&P 500 Stock Index, the Russell 2000 and the
Morgan Stanley International (MSCI) All Country World Index, and various
rankings by independent evaluators such as Morningstar and Lipper Analytical
Services, Inc. in order to provide the reader a basis for comparison.

ADDITIONAL INFORMATION

ORGANIZATION OF THE FUND. The Fund was organized as a Massachusetts
business trust on May 12, 1994 and is registered with the SEC as an open-end
diversified management investment company. When issued, shares are fully paid
and have no preemptive or conversion rights. The shares of beneficial interest
of the Fund, $0.01 par value, are divided into seven separate series. The
shares of each series are freely-transferable and equal as to earnings, assets
and voting privileges with all other shares of that series. There are no
conversion, preemptive or other subscription rights. Upon liquidation of the
Fund or any Portfolio, shareholders of a Portfolio are entitled to share pro
rata in the net assets of that Portfolio available for distribution to
shareholders after all debts and expenses have been paid. The shares do not
have cumulative voting rights.

The assets received by the Fund on the sale of shares of each Portfolio and
all income, earnings, profits and proceeds thereof, subject only to the rights
of creditors, are allocated to each Portfolio, and constitute the assets of such
Portfolio. The assets of each Portfolio are required to be segregated on the
Fund's books of account. The Fund's Board of Trustees has agreed to monitor the
portfolio transactions and management of each of the Portfolios and to consider
and resolve any conflict that may arise.

VOTING. For matters affecting only one Portfolio, only the shareholders of
that Portfolio are entitled to vote. For matters relating to all the Portfolios
but affecting the Portfolios differently, separate votes by Portfolio are
required. Approval of an Investment Management Agreement and a change in
fundamental policies would be regarded as matters requiring separate voting by
each Portfolio. To the extent required by law, the Variable Accounts will vote
the shares of the Fund, or any Portfolio of the Fund, held in the Separate
Accounts in accordance with instructions from Contractowners, as described under
the caption "Voting Rights" in the accompanying Prospectus for the Separate
Accounts. Shares for which no instructions are received as well as shares which
the Manager or its parent, Oppenheimer Capital, may own, will be voted in the
same proportion as shares for which instructions are received. The Fund does
not intend to hold annual meetings of shareholders. However, the Board of
Trustees will call special meetings of shareholders for action by shareholder
vote as may be requested in writing by holders of 10 percent or more of the
outstanding shares of a Portfolio or as may be required by applicable laws or
the Declaration of Trust pursuant to which the Fund has been organized.

entered into or executed by the Fund. The Declaration of Trust also provides
for indemnification out of the Fund's property for any shareholder held
personally liable for any Fund obligation. Thus, the risk of loss to a
shareholder from being held personally liable for obligations of the Fund is
limited to the unlikely circumstance in which the Fund itself would be unable to
meet its obligations.

CUSTODIAN AND TRANSFER AGENT. The custodian of the assets of the Fund is
State Street Bank and Trust Company, P.O. Box 8505, Boston, MA 02266-8505,
which also acts as transfer agent and shareholder servicing agent for the Fund.

CONTRACTOWNERS INQUIRIES. Inquiries concerning the purchase and sale of
shares of the Fund, dividends, account statements and management and investment
policies of the Fund should be directed to the respective life insurance
companies which use the Fund as an investment vehicle for their respective
variable annuity and life insurance contracts.

YEAR 2000 ISSUES. The management services provided to the Fund by the
Manager, and the services provided by the Transfer Agent to shareholders, depend
on the smooth functioning of their computer systems. Many computer software
systems in use today cannot recognize the year 2000, but revert to 1900 or some
other incorrect date, due to the manner in which dates were encoded and
calculated. That failure could have a negative impact on the handling of
securities trades, pricing and account services. Improperly functioning trading
systems may result in settlement problems and liquidity issues. In addition,
corporate and governmental data processing errors may result in production
problems for individual companies and overall economic uncertainties. Earnings
of individual issuers may be affected by remediation costs, which may be
substantial. The Manager and Transfer Agent have been actively working on
necessary changes to their own computer systems to deal with the year 2000 and
expect that their systems will be adapted before that date, but there can be no
assurance that they will be successful or that interaction with other
noncomplying computer systems will not impair their services at that time.

<PAGE>

APPENDIX

DESCRIPTION OF COMMERCIAL PAPER AND CORPORATE BOND RATINGS

COMMERCIAL PAPER RATINGS

Moody's commercial paper ratings are opinions of the ability of issuers to
repay promissory obligations when due. Moody's employs the following three
designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers: Prime 1 - Superior Ability for Repayment;
Prime 2 - Strong Ability for Repayment; Prime 3 - Acceptable Ability for
Repayment.

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment. Ratings are graded into four categories, ranging from "A" for
the highest quality obligations to "D" for the lowest. Issues assigned the
highest rating, "A", are regarded as having the greatest capacity for timely
payment. Issues in this category are delineated with the numbers "1", "2", and
"3" to indicate the relative degree of safety. The designation "A-1" indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong. The "A+" designation is applied to those issues rated "A-1" which
possess overwhelming safety characteristics. Capacity for timely payment on
issues with the designation "A-2" is strong. However, the relative degree of
safety is not as high as for issues designated "A-1."

Fitch's commercial paper ratings represent Fitch's assessment of the
issuer's ability to meet its obligations in a timely manner. The assessment
places emphasis on the existence of liquidity. Ratings range from "F-1+" which
represents exceptionally strong credit quality to "F-4" which represents weak
credit quality.

Duff's short-term ratings apply to all obligations with maturities of under
one year, including commercial paper, the uninsured portion of certificates of
deposit, unsecured bank loans, master notes, bankers acceptances, irrevocable
letters of credit and current maturities of long-term debt. Emphasis is placed
on liquidity. Ratings range for Duff 1+ for the highest quality to Duff 5 for
the lowest, issuers in default. Issues rated Duff 1+ are regarded as having the
highest certainty of timely payment. Issues rated Duff 1 are regarded as having
very high certainty of timely payment.

Thomson's BankWatch, Inc. assigns only one Issuer Rating to each company,
based upon a qualitative and quantitative analysis of the consolidated
financials of an issuer and its subsidiaries. The rating incorporates TBW's
opinion of the vulnerability of the company to adverse developments which may
impact the marketability of its securities, as well as the issuer's ability to
repay principal and interest. Ratings range from "TBW-1" for highest quality to
"TBW-3" for the lowest, companies with very serious problems.

BOND RATINGS

A bond rated "Aaa" by Moody's is judged to be the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is deemed secure.
While the various protective elements may change, such foreseeable changes are
unlikely to impair the fundamentally strong position of such issues. Bonds
which are rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as high
grade bonds. Margins of protection on "Aa" bonds may not be as large as on
"Aaa" securities or fluctuations of protective elements may be of greater
magnitude or there may be other elements present which make the long-term risks
appear somewhat larger than "Aaa" securities. Bonds which are rated "A" possess
many favorable investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a susceptibility
to impairment some time in the future. Bonds rated "Baa" are considered medium
grade obligations whose interest payments and principal security appear adequate
for the present but may lack certain protective elements or may be
characteristically unreliable over any great length of time. Moody's applies
numerical modifiers "1", "2" and "3" in each generic rating classification from
"Aa" through "B" in its corporate bond rating system. The modifier "1"
indicates that the security ranks in the higher end of its generic rating
category; the modifier "2" indicates a mid-

<PAGE>

range ranking; and the modifier "3" indicates that the issue ranks in the lower
end of its generic rating category. Bonds rated "Ba" are judged to have
speculative elements and bonds rated below "Ba" are speculative to a higher
degree.

Debt rated "AAA" by S&P has the highest rating assigned by it. Capacity to
pay interest and repay principal is extremely strong. Debt rated "AA" has a
strong capacity to pay interest and repay principal and differs from "AAA"
issues only in small degree. Debt rated "A" has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories. Debt
rated "BB" and below is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
Plus (+) and minus (-) signs are used with a rating symbol to indicate the
relative position within the category.

Debt rated "AAA", the highest rating by Fitch, is considered to be 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. Debt rated "AA" is regarded as very high credit quality.
The obligor's ability to pay interest and repay principal is very strong. Debt
rated "A" is of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than debt with higher
ratings. Debt rated "BBB" is of satisfactory credit quality. The obligor's
ability to pay interest and repay principal is adequate, however a change in
economic conditions may adversely affect timely payment. Plus (+) and minus (-)
signs are used with a rating symbol (except "AAA") to indicate the relative
position within the category.

Debt rated "AAA", the highest rating by Duff is considered to be of the
highest credit quality. The risk factors are negligible being only slightly
more than for risk-free U.S. Treasury debt. Debt rated "AA" is regarded as high
credit quality. Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. Debt rated "A" is
considered to have average but adequate protection factors. Bonds rated "BBB"
are considered to have below average protection factors but still sufficient for
prudent investment. Bonds rated "BB" and below are below investment grade and
possess fluctuating protection factors and risk. Plus (+) and minus (-) signs
are used with a rating symbol to indicate the relative position within the
category.

<PAGE>

OCC ACCUMULATION TRUST
One World Financial Center, New York, New York 10281

OCC ACCUMULATION TRUST (formerly known as Quest for Value Accumulation Trust,
the "Fund") is a registered open-end diversified management investment company
offering several investment alternatives. It permits an investor the
flexibility of choosing among different investment objectives, through the
following two Portfolios (the "Portfolios"), each of which is a separate series
of shares of beneficial interest of the Fund ("Shares"). The investment
objective of each Portfolio is as follows:

SMALL CAP PORTFOLIO: Capital appreciation through investment in a diversified
portfolio of equity securities of companies with market capitalizations of under
$1 billion.

The Fund is an investment vehicle for variable annuity and variable life
insurance contracts of various life insurance companies, and qualified pension
and retirement plans ("Qualified Plans"). Shares of the Fund are currently sold
to variable accounts of various life insurance companies for the purpose of
funding variable annuity and variable life insurance contracts (the
"Contracts"). These variable accounts (the "Variable Accounts") invest in
Shares of the Fund in accordance with allocation instructions received from
owners (the "Contractowners") of the Contracts. Allocation rights are further
described in the accompanying prospectus for the Variable Accounts. The
Variable Accounts will redeem Shares to the extent necessary to provide benefits
under the Contracts.

It is possible, although not presently anticipated, that a material
conflict could arise between and among the various variable accounts which
invest in Shares of the Fund and the Qualified Plans, which may, in the future
invest in Shares of the Fund. Such conflict could cause the liquidation of
assets of one or more of the Fund Portfolios to raise cash at times not
otherwise deemed advantageous by the Fund Manager. See "Management of the
Fund," page 14.

OPCAP ADVISORS
Investment Manager
Prospectus dated May 1, 1998

<PAGE>

TABLE OF CONTENTS

Page
----

Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . .8

Small Cap Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Managed Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Additional Information on Investment Objectives and Policies . . . . . . . . .9

Investment Techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . 16

Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

State Law Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . 17

Calculation of Performance . . . . . . . . . . . . . . . . . . . . . . . . . 17

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

2
<PAGE>
PROSPECTUS SUMMARY

THE FUND The Fund is a Massachusetts business trust which issues
its shares in series as separate classes of shares of
beneficial interest. There are currently two series
available for investment through the Variable Accounts,
each of which is designated as a "Portfolio".
Together, the two Portfolios are designed to enable
investors to choose a number of investment alternatives
to achieve their financial goals and to shift assets
conveniently among Portfolios when and if their
investment aims or perception of the marketplace
change.

The Fund commenced operations on September 16, 1994
when an investment company then called Quest for Value
Accumulation Trust, with portfolios corresponding to
the two available portfolios of the Fund, was
effectively divided into two investment funds, the
original investment company, whose name was changed,
and the Fund.

INVESTMENT OBJECTIVES
AND RESTRICTIONS The investment objective of each of the Portfolios is
set forth on the cover page of this Prospectus. These
objectives are described in more detail under the
heading "Investment Objectives and Policies." Although
each Portfolio will be actively managed by experienced
professionals, there can be no assurance that the
objectives will be achieved.

Market risk for fixed income securities is the risk
that interest rates will change, thereby affecting
their value. Generally, the value of fixed income
securities declines as interest rates rise, and
conversely, their value rises as interest rates
decline. The second type of risk, financial or credit
risk, is associated with the financial condition and
profitability of an individual equity or fixed income
issuer. The financial risk in owning equities is
related to earnings stability and overall financial
soundness of individual issuers and of issuers
collectively which are part of a particular industry.
For fixed income securities, credit risk relates to the
financial ability of an issuer to make periodic
interest payments and ultimately repay the principal at
maturity. (See "Additional Information on Investment
Objectives and Policies" for risk aspects of the
individual Portfolios).

INVESTMENT MANAGER OpCap Advisors (the "Manager"), the investment manager
of each of the Portfolios, is investment manager and
sub-adviser to several other registered investment
companies with assets under management of approximately
$18.3 billion at March 31, 1998 and is a subsidiary of
Oppenheimer Capital, a registered investment adviser,
which had assets under management, including those of
OpCap Advisors, of approximately $67.6 billion at March
31, 1998.

MANAGEMENT FEE The Manager receives a monthly fee from each Portfolio
at varying annual percentage rates of average daily net
assets, as follows: .80 percent on the first $400
million, .75 percent on the next $400 million and .70
percent thereafter of

3
<PAGE>

the average daily net assets for the Small Cap, and
Managed Portfolios; (see page 14).
PURCHASES AND
REDEMPTION OF SHARES Currently, shares of the Fund are sold at their net
asset value per share, without sales charge, for
allocation to the Variable Accounts as the underlying
investment for the Contracts. Accordingly, the
interest of the Contractowner with respect to the Fund
is subject to the terms of the Contract as described in
the accompanying Prospectus for the Variable Accounts,
which should be reviewed carefully by a person
considering the purchase of a Contract. That
Prospectus describes the relationship between increases
or decreases in the net asset value of Fund shares and
any distributions on such shares, and the benefits
provided under a Contract. The rights of the Variable
Accounts as shareholders of the Fund should be
distinguished from the rights of a Contractowner which
are described in the Contract. As long as shares of
the Fund are sold for allocation to the Variable
Accounts, the terms "shareholder" or "shareholders" in
this Prospectus shall refer to the Variable Accounts.
Shares are redeemed at their respective net asset
values as next determined after receipt of proper
notice of redemption.

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus, the Additional Statement, and the accompanying
Prospectus for the Variable Accounts.

4
<PAGE>

OCC ACCUMULATION TRUST

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1997, 1996 and 1995,
and for the period from September 16, 1994 through December 31, 1994 for the
Managed and Small Cap Portfolios have been audited by Price Waterhouse LLP,
independent accountants, whose unqualified report thereon appears in the
Additional Statement (Part B). This information should be read in conjunction
with the financial statements and related notes thereto included in the
Additional Statement. Total return information for the Portfolios of the Fund
provided in the Financial Highlights does not include charges and deductions
which are imposed under the Contracts and described in the Prospectus for the
Variable Accounts. Inclusion of these charges and deductions would reduce the
total return of the Portfolios of the Fund. Further information about the
performance of each Portfolio is available in the Fund's Annual Report or semi-
annual report. Annual reports or semi-annual reports can be obtained without
charge upon written requests to the insurance companies issuing the Contracts.

5
<PAGE>
OCC ACCUMULATION TRUST
MANAGED PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
----------- ----------- --------- ---------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $36.21 $30.14 $20.83 $21.80
------------ ------------ ----------- -----------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . 0.34 0.43 0.42 0.14
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . 7.45 6.31 9.02 (1.11)
------------ ------------ ----------- -----------
Total income from investment operations. . . . . . . . 7.79 6.74 9.44 (0.97)
------------ ------------ ----------- -----------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income. . . . . . . . . . . . . . . . . (0.40) (0.41) (0.13) -
Distributions to shareholders from
net realized gains . . . . . . . . . . . . . . . . . . (1.22) (0.26) - -
------------ ------------ ----------- -----------
Total dividends and distributions to shareholders. . . . (1.62) (0.67) (0.13) -
------------ ------------ ----------- -----------
Net asset value, end of period . . . . . . . . . . . . . $42.38 $36.21 $30.14 $20.83
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
Total return (2) . . . . . . . . . . . . . . . . . . . . 22.3% 22.8% 45.6% (4.4%)
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
Net assets, end of period. . . . . . . . . . . . . . . . $466,791,224 $180,728,094 $99,188,147 $54,943,371
------------ ------------ ----------- -----------
Ratio of net operating expenses
to average net assets (5) . . . . . . . . . . . . . . 0.87%(4) 0.84%(6) 0.66%(6) 0.66%(3,6)
------------ ------------ ----------- -----------
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . 1.42%(4) 1.66%(6) 1.85%(6) 2.34%(3,6)
------------ ------------ ----------- -----------
Portfolio turnover rate. . . . . . . . . . . . . . . . . 32% 27% 22% 8%
------------ ------------ ----------- -----------
Average commission rate. . . . . . . . . . . . . . . . . $0.0571 $0.0592 - -
------------ ------------ ----------- -----------

- --------------------------------------------------------------------------------
</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $290,421,930.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion of its fees.
If such waivers had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 0.85% and 1.65%, respectively, for the
year ended December 31, 1996, 0.74% and 1.77%, respectively, for the year
ended December 31, 1995 and 0.96% and 2.04%, annualized, respectively, for
the period September 16, 1994 (commencement of operations) to December 31,
1994.
6
<PAGE>
OCC ACCUMULATION TRUST
SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------- September 16, 1994 (1)
1997 1996 1995 to December 31, 1994
----------- ----------- --------- ---------------------
<S> <C> <C> <C> <C>

Net asset value, beginning of period . . . . . . . . . . $22.61 $19.91 $17.38 $17.49
------------ ----------- ----------- ----------
Income from investment operations
Net investment income. . . . . . . . . . . . . . . . . . 0.08 0.14 0.26 0.06
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . . . . . 4.73 3.45 2.37 (0.17)
------------ ----------- ----------- ----------
Total income from investment operations. . . . . . . . 4.81 3.59 2.63 (0.11)
------------ ----------- ----------- ----------
Dividends and distributions to shareholders
Dividends to shareholders from
net investment income. . . . . . . . . . . . . . . . . (0.13) (0.25) (0.05) ---
Distributions to shareholders from
net realized gains. . . . . . . . . . . . . . . . . . (0.92) (0.64) (0.05) ---
------------ ----------- ----------- ----------
Total dividends and distributions to shareholders. . . (1.05) (0.89) (0.10) ---
------------ ----------- ----------- ----------
Net asset value, end of period . . . . . . . . . . . . . $26.37 $22.61 $19.91 $17.38
------------ ----------- ----------- ----------
------------ ----------- ----------- ----------
Total return (2) . . . . . . . . . . . . . . . . . . . . 22.2% 18.7% 15.2% (0.6%)
------------ ----------- ----------- ----------
------------ ----------- ----------- ----------
Net assets, end of period. . . . . . . . . . . . . . . . $110,564,506 $34,256,671 $16,004,392 $9,210,443
------------ ----------- ----------- ----------
Ratio of net operating expenses
to average net assets (5) . . . . . . . . . . . . . . 0.97%(4) 0.93%(6) 0.74%(6) 0.74%(3,6)
------------ ----------- ----------- ----------
Ratio of net investment income
to average net assets . . . . . . . . . . . . . . . . 0.64%(4) 1.03%(6) 1.75%(6) 1.22%(3,6)
------------ ----------- ----------- ----------
Portfolio turnover rate. . . . . . . . . . . . . . . . . 68% 50% 69% 32%
------------ ----------- ----------- ----------
Average commission rate. . . . . . . . . . . . . . . . . $0.0549 $0.0493 -- --
------------ ----------- ----------- ----------

- --------------------------------------------------------------------------------
</TABLE>

(1) Commencement of operations.

(2) Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.

(3) Annualized.

(4) Average net assets for the year ended December 31, 1997 were $62,297,759.

(5) For fiscal periods ending after September 1, 1995, the ratios are
calculated to include expenses offset by earnings credits from a custodian
bank (See note 1G in Notes to Financial Statements).

(6) During the periods noted above, the Adviser waived a portion or all of its
fees and assumed a portion of the Portfolio's operating expenses. If such
waivers and assumptions had not been in effect, the ratios of net operating
expenses to average net assets and the ratios of net investment income to
average net assets would have been 1.01% and 0.92%, respectively, for the
year ended December 31, 1996, 0.99% and 1.50%, respectively, for the year
ended December 31, 1995 and 1.64% and 0.32%, annualized, respectively, for
the period September 16, 1994 (commencement of operations) to December 31,
1994.
7
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each Portfolio of the Fund are
described below. Investment objectives of each Portfolio are fundamental
policies which cannot be changed for any Portfolio without a majority vote of
the shareholders of that Portfolio; investment policies are not fundamental and
may be adjusted by the Manager at any time, usually in response to its
perception of developments in the securities markets. The extent to which a
Portfolio will be able to achieve its distinct investment objectives depends
upon the Manager's ability to evaluate and develop the information it receives
into a successful investment program. Although each Portfolio will be managed
by experienced professionals, there can be no assurance that any Portfolio will
achieve its investment objectives. The values of the securities held in each
Portfolio will fluctuate and the net asset value per share at the time shares
are redeemed may be more or less than the net asset value per share at the time
of purchase. Investors should also refer to "Investment Techniques" for
additional information concerning the investment techniques employed for some or
all of the Portfolios.

INVESTMENT OBJECTIVES OF THE FUND PORTFOLIOS

SMALL CAP PORTFOLIO

The investment objective of the Small Cap Portfolio is to seek capital
appreciation through investments in a diversified portfolio consisting primarily
of equity securities of companies with market capitalizations of under $1
billion. Smaller-capitalization companies are often under-priced for the
following reasons: (i) institutional investors, which currently represent a
majority of the trading volume in the shares of publicly-traded companies, are
often less interested in such companies because in order to acquire an equity
position that is large enough to be meaningful to an institutional investor,
such an investor may be required to buy a large percentage of the company's
outstanding equity securities and (ii) such companies may not be regularly
researched by stock analysts, thereby resulting in greater discrepancies in
valuation. The Portfolio may also purchase securities in initial public
offerings, or shortly after such offerings have been completed, when the Manager
believes that such securities have greater-than-average market appreciation
potential. Under normal circumstances at least 65 percent of the Portfolio's
assets will be invested in equity securities. The majority of securities
purchased by the Portfolio will be traded on the New York Stock Exchange (the
"NYSE"), the American Stock Exchange or in the over-the-counter market, and will
also include options, warrants, bonds, notes and debentures which are
convertible into or exchangeable for, or which grant a right to purchase or
sell, such securities. In addition, the Portfolio may also purchase foreign
securities provided that they are listed on a domestic or foreign securities
exchange or are represented by American depository receipts listed on a domestic
securities exchange or traded in domestic or foreign over-the-counter markets.
The Small Cap Portfolio is managed by Timothy McCormack, Senior Vice President
of Oppenheimer Capital and Timothy Curro and Gavin Albert, both of whom are Vice
Presidents of Oppenheimer Capital. Mr. McCormack became a portfolio manager of
the Portfolio in May 1996. He joined Oppenheimer Capital in 1994. From March
1993 to July 1994 Mr. McCormack was a security analyst at U.S. Trust Company and
prior to that he was a securities analyst with Gabelli and Company. He has a
Masters of Business Administration degree from the Wharton School. Timothy
Curro and Gavin Albert became portfolio managers of the Portfolio on January 1,
1997. Mr. Curro has been a Vice President of Oppenheimer Capital since November
1996. Prior thereto, he was a general partner of Value Holdings, L.P., an
investment partnership, from May 1995 to November 1996, a Vice President in the
equity research department at UBS Securities Inc. from June 1994 through May
1995 and from January 1991 through February 1993 and was a partner with Omega
Advisors, Inc. from March 1993 to March 1994. He has a Masters of Business
Administration degree from the University of California, Berkeley. Mr. Albert,
Vice President of Oppenheimer Capital since December 1996, joined the firm in
September 1994 as a research analyst. Prior thereto he was a management
consultant for EDS Energy Management in 1994, attended the Vanderbilt University
Business School from September 1992 to May 1994 (with a Masters of Business
Administration degree in finance and management) and was a financial analyst in
the Corporate Finance department of Texaco, Inc. from 1990 to 1992.

8
<PAGE>

MANAGED PORTFOLIO

The investment objective of the Managed Portfolio is to achieve growth of
capital over time through investment in a portfolio consisting of common stocks,
bonds and cash equivalents, the percentages of which will vary based on the
Manager's assessments of the relative outlook for such investments. In seeking
to achieve its investment objective, the types of equity securities in which the
Portfolio may invest are likely to be the same as those in which the Equity
Portfolio invests, although securities of the type in which the Small Cap
Portfolio invests may, to a lesser extent, be included. Debt securities are
expected to be predominantly investment grade intermediate to long term U.S.
Government and corporate debt, although the Portfolio will also invest in high
quality short term money market and cash equivalent securities and may invest
almost all of its assets in such securities when the Manager deems it advisable
in order to preserve capital. In addition, the Portfolio may also purchase
foreign securities provided that they are listed on a domestic or foreign
securities exchange or are represented by American depository receipts listed on
a domestic securities exchange or traded in domestic or foreign over-the-counter
markets.

The allocation of the Portfolio's assets among the different types of
permitted investments will vary from time to time based upon the Manager's
evaluation of economic and market trends and its perception of the relative
values available from such types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Portfolio's assets that may,
at any given time, be invested in any of the types of investments identified
above. Consequently, while the Portfolio will earn income to the extent it is
invested in bonds or cash equivalents, the Portfolio does not have any specific
income objective. Although there is neither a minimum nor maximum percentage of
the Portfolio's assets that may, at any given time, be invested in any of the
types of investments identified above, it is anticipated that most of the time
the majority of the Portfolio's assets will be invested in common stocks. The
investments of the Managed Portfolio are managed by Richard J. Glasebrook II,
Managing Director of Oppenheimer Capital. He joined Oppenheimer Capital in
1991. From 1983 to 1991, he was a partner with Delafield Asset Management and
from 1974 to 1970 he was a portfolio manager and analyst with Morgan Guaranty
Trust Co. Mr. Glasebrook graduated with a BA from Kenyon College and received
an MBA from the Harvard Graduate School of Business Administration.

ADDITIONAL INFORMATION ON INVESTMENT OBJECTIVES AND POLICIES

For the Small Cap Portfolio, at times when the investment climate is viewed
as favorable, common stocks will be heavily emphasized. Under normal
circumstances, at least 65 percent of each Portfolio's assets will be invested
in common stocks or securities convertible into common stocks.

In the event that future economic or financial conditions adversely affect
equity securities, or stocks are considered overvalued, the Small Cap Portfolio
may invest a substantial portion of its assets in debt securities, with an
emphasis on money market instruments or cash and cash equivalents.

Regulations under Section 817(h) of the Internal Revenue Code ("IRC
817(h)") require each Portfolio to diversify its investments. To comply with
these regulations each Portfolio is required to diversify its investments so
that on the last day of each quarter of a calendar year no more than 55 percent
of the value of its total assets is represented by any one investment, no more
than 70 percent is represented by any two investments, no more than 80 percent
is represented by any three investments, and no more than 90 percent is
represented by any four investments. For this purpose, securities of a given
issuer generally are treated as one investment, but each U.S. Government agency
and instrumentality is treated as a separate and distinct issuer. As such, any
security issued, guaranteed, or insured (to the extent so guaranteed or insured)
by the U.S. or an agency or instrumentality of the U.S. is treated as a security
issued by the U.S. Government or its agency or instrumentality, whichever is
applicable. These diversification rules limit the amount that any Portfolio can
invest in any single issuer, including

9
<PAGE>

direct obligations of the U.S. Treasury, to 55 percent of the Portfolio's total
assets at the end of any calendar quarter.

MANAGEMENT OF ASSETS

The Manager intends to manage each Portfolio's assets by buying and selling
securities to help attain its investment objective. This may result in
increases or decreases in a Portfolio's current income available for
distribution to its shareholders. While none of the Portfolios is managed with
the intent of generating short-term capital gains, each of the Portfolios may
dispose of investments (including money market instruments) regardless of the
holding period if, in the opinion of the Manager, an issuer's creditworthiness
or perceived changes in a company's growth prospects or asset value make selling
them advisable. Such an investment decision may result in capital gains or
losses and could result in a high portfolio turnover rate during a given period,
resulting in increased transaction costs related to equity securities.
Disposing of debt securities in these circumstances should not increase direct
transaction costs since debt securities are normally traded on a principal basis
without brokerage commissions. However, such transactions do involve a mark-up
or mark-down of the price.

During periods of unusual market conditions when the Manager believes that
investing for defensive purposes is appropriate, or in order to meet anticipated
redemption requests, part or all of the assets of one or more of the Portfolios
may be invested in cash or cash equivalents including obligations listed above.

The "Financial Highlights" table shows the Portfolios' portfolio turnover
rates. The portfolio turnover rates of the Portfolios cannot be accurately
predicted. Nevertheless, it is anticipated that the Small Cap and Managed
Portfolios will have an annual turnover rate (excluding turnover of securities
having a maturity of one year or less) of less than 100%. A 100 percent annual
turnover rate would occur, for example, if all the securities in a Portfolio's
investment portfolio were replaced once in a period of one year.

RISK ASPECTS OF THE INDIVIDUAL PORTFOLIOS

MANAGED PORTFOLIO. An investment in the Managed Portfolio will entail both
market and financial risk, the extent of which depends on the amount of the
Portfolio's assets which are committed to equity, longer term debt or money
market securities at any particular time. As the Managed Portfolio may invest
in mortgage-backed securities, such securities, while similar to other fixed-
income securities, involve the additional risk of prepayment because mortgage
prepayments are passed through to the holder of the mortgage-backed security and
must be reinvested. Prepayments of mortgage principal reduce the stream of
future payments and generate cash which must be reinvested. When interest rates
fall, prepayments tend to rise. As such these Portfolios may have to reinvest
that portion of their respective assets invested in such securities more
frequently when interest rates are low than when interest rates are high.

SMALL CAP PORTFOLIO. The Small Cap Portfolio is expected to have greater
risk exposure and reward potential than a portfolio which invests primarily in
larger-capitalization companies. The trading volumes of securities of smaller-
capitalization companies are normally less than those of larger-capitalization
companies. This often translates into greater price swings, both upward and
downward. The waiting period for the achievement of an investor's objectives
might be longer since these securities are not closely monitored by research
analysts and, thus, it takes more time for investors to become aware of
fundamental changes or other factors which have motivated the Portfolio's
purchase. Smaller-capitalization companies often achieve higher growth rates
and experience higher failure rates than do larger-capitalization companies.

ADDITIONAL RISKS OF FOREIGN SECURITIES: The Small Cap and Managed
Portfolios may purchase foreign securities that are listed on a domestic or
foreign securities exchange, traded in domestic or foreign over-the counter
markets or represented by American Depository Receipts. There is no limit to
the amount of such foreign securities the Portfolios may acquire. Certain
factors and risks are presented by investment in foreign securities which are in
addition to the usual risks inherent in domestic securities. Foreign companies
are not necessarily subject to uniform accounting, auditing and financial
reporting standards or other regulatory requirements comparable to those
applicable to U.S. companies. Thus, there may be less available information
concerning non-U.S. issuers of securities held by a Portfolio than is available
concerning U.S. companies. In addition, with respect

10
<PAGE>

to some foreign countries, there is the possibility of nationalization,
expropriation or confiscatory taxation; income earned in the foreign nation
being subject to taxation, including withholding taxes on interest and
dividends, or other taxes imposed with respect to investments in the foreign
nation; limitations on the removal of securities, property or other assets of a
fund; difficulties in pursuing legal remedies and obtaining judgments in foreign
courts, or political or social instability or diplomatic developments which
could affect U.S. investments in those countries. For a description of the
risks of possible losses through holding of securities in foreign custodian
banks and depositories, see "Investment of Assets" in the Additional Statement.

Securities of many non-U.S. companies may be less liquid and their prices
more volatile than securities of comparable U.S. companies. Non-U.S. stock
exchanges and brokers are generally subject to less governmental supervision and
regulation than in the U.S. and commissions on foreign stock exchanges are
generally higher than negotiated commissions on U.S. transactions. In addition,
there may in certain instances be delays in the settlement of non-U.S. stock
exchange transactions. Certain countries restrict foreign investments in their
securities markets. These restrictions may limit or preclude investment in
certain countries, industries or market sectors, or may increase the cost of
investing in securities of particular companies. Purchasing the shares of
investment companies which invest in securities of a given country may be the
only or the most efficient way to invest in that country. This may require the
payment of a premium above the net asset value of such investment companies and
the return will be reduced by the operating expenses of those investment
companies.

A decline in the value of the U.S. dollar against the value of any
particular currency will cause an increase in the U.S. dollar value of a
Portfolio's holdings denominated in such currency. Conversely, a decline in the
value of any particular currency against the U.S. dollar will cause a decline in
the U.S. dollar value of the Portfolio's holdings of securities denominated in
such currency. Some foreign currency values may be volatile and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets which could adversely affect a Portfolio. The
Portfolios do not intend to speculate in foreign currency in connection with the
purchase or sale of securities on a foreign securities exchange but may enter
into foreign currency contracts to hedge their foreign currency exposure. While
those transactions may minimize the impact of currency appreciation and
depreciation, the Portfolios will bear a cost for entering into the transaction
and such transactions do not protect against a decline in the security's value
relative to other securities denominated in that currency.

EMERGING MARKET COUNTRIES: Certain developing countries may have relatively
unstable governments, economies based on only a few industries that are
dependent upon international trade and reduced secondary market liquidity.
Foreign investment in certain emerging market countries is restricted or
controlled in varying degrees. In the past, securities in these countries have
experienced greater price movement, both positive and negative, than securities
of companies located in developed countries. Lower-rated high-yielding emerging
market securities may be considered to have speculative elements.

HIGH YIELD SECURITIES: It is the present intention of the Manager with
respect to each of the Small Cap and Managed Portfolios to invest no more than 5
percent of its net assets in bonds rated below Baa3 by Moody's or BBB- by S&P
(commonly known as "junk bonds"). In the event that the Manager intends in the
future to invest more than 5 percent of the net assets of any such Portfolio in
junk bonds, appropriate disclosures will be made to existing and prospective
shareholders. For information about the possible risks of investing in junk
bonds see "Investment of Assets" in the Additional Statement.

OPTIONS AND FUTURES: To the extent permitted by applicable state law, the
Small Cap Portfolio may engage in futures contracts and options on futures
contracts for bona fide hedging or other non-speculative purposes. The Small
Cap Portfolio may also engage in options on stock indices. The Small Cap
Portfolio may write covered call options on individual securities. The
Portfolio will not enter into any leveraged futures transactions. Different
uses of futures and options have different risk and return characteristics.
Generally, selling futures contracts, purchasing put options and writing call
options are strategies designed to protect against falling security prices and
can limit potential gains if prices rise. Purchasing futures contracts,
purchasing call options and writing put options are strategies whose returns
tend to rise and fall together with securities prices and can cause losses if
prices fall. If securities prices remain unchanged over time, option writing
strategies tend to be

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profitable while option buying strategies tend to be unprofitable. For more
information about Options and Futures see "Investment Techniques" in this
Prospectus and "Investment of Assets" in the Additional Statement.

INVESTMENT TECHNIQUES

The investment techniques or instruments described below are used for the
Portfolios' investment programs:

LOANS OF PORTFOLIO SECURITIES. Each Portfolio may lend its portfolio
securities if such loans are secured continuously by collateral (cash, U.S.
Government or agency obligations or letters of credit) maintained on a daily
basis in an amount at least equal at all times to the market value of the
securities loaned and if the Portfolio does not incur any fees (other than the
transaction fees of its custodian bank) in connection with such loans. A
Portfolio may call the loan at any time on five days' notice and reacquire the
loaned securities. During the loan period, the Portfolio would continue to
receive the equivalent of the interest paid by the issuer on the securities
loaned and would also have the right to receive the interest on investment of
the cash collateral in short-term debt instruments. A portion of either or both
kinds of such interest may be paid to the borrower of such securities. It is
not intended that the value of the securities loaned, if any, would exceed 10
percent of the value of the total assets of the Small Cap and Managed
Portfolios. Securities loans must also meet applicable tests under the Internal
Revenue Code. A Portfolio could experience various costs or loss if a borrower
defaults on its obligation to return the borrowed securities.

OPTIONS AND FUTURES. To the extent permitted by applicable state law, the
Small Cap Portfolio may engage in options and futures transactions. The Small
Cap Portfolio may engage in futures contracts or options on futures contracts
for bona fide hedging or other non-speculative purposes and to write calls on
individual securities. The Small Cap and Managed Portfolios may also enter into
forward foreign currency contracts to purchase or sell foreign currencies in
connection with any transactions in foreign securities. The Small Cap Portfolio
may also engage in options on stock indices. When any of such Portfolios
anticipate a significant market or market sector advance, the purchase of a
futures contract affords a hedge against not participating in the advance at a
time when such Portfolio is not fully invested ("anticipatory hedge"). Such a
purchase of a futures contract would serve as a temporary substitute for the
purchase of individual securities, which then may be purchased in an orderly
fashion

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once the market has stabilized. As individual securities are purchased, an
equivalent amount of futures contracts could be terminated by offsetting sales.
The Portfolios may sell futures contracts in anticipation of or in a general
market or market sector decline that may adversely affect the market value of
such Portfolio's securities ("defensive hedge"). To the extent that the
Portfolios' securities change in value in correlation with the underlying
security or index, the sale of futures contracts would substantially reduce the
risk to the Portfolios of a market decline and by so doing, provide an
alternative to the liquidation of securities positions in the Portfolios with
attendant transaction costs. So long as the Commodities Futures Trading
Commission rules so require, none of the Portfolios will enter into any
financial futures or options contract unless such transactions are for bona fide
hedging purposes, or for other purposes only if the aggregate initial margins
and premiums required to establish such non-hedging positions would not exceed 5
percent of the liquidation value of such Portfolio's assets. When writing put
options, the Fund, on behalf of the Portfolio, will maintain in a segregated
account at its Custodian liquid assets with a value equal to at least the
exercise price of the option to secure its obligation to pay for the underlying
security. As a result, such Portfolio forgoes the opportunity of trading the
segregated assets or writing calls against those assets. There may not be a
complete correlation between the price of options and futures and the market
prices of the underlying securities. The Portfolio may lose the ability to
profit from an increase in the market value of the underlying security or may
lose its premium payment. If due to a lack of a market a Portfolio could not
effect a closing purchase transaction with respect to an OTC option, it would
have to hold the callable securities until the call lapsed or was exercised.

The average life of these securities varies with the maturities of the
underlying mortgage instruments (generally up to 30 years) and with the extent
of prepayments on the mortgages themselves. Any such prepayments are passed
through to the certificate holder, reducing the stream of future payments.
Prepayments tend to rise in periods of falling interest rates, decreasing the
average life of the certificate and generating cash which must be invested in a
lower interest rate environment. This could also limit the appreciation
potential of the certificates when compared to similar debt obligations which
may not be paid down at will, and could cause losses on certificates purchased
at a premium or gains on certificates purchased at a discount. Ginnie Mae
certificates represent pools of mortgages insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by the Veteran's
Administration. The guarantee of payments under these certificates is backed by
the full faith and credit of the United States. Fannie Mae is a
government-sponsored corporation owned entirely by private stockholders. The
guarantee of payments under these instruments is that of Fannie Mae only. They
are not backed by the full faith and credit of the United States but the U.S.
Treasury may extend credit to Fannie Mae through discretionary purchases of its
securities. The U.S. Government has no obligation to assume the liabilities of
Fannie Mae. Freddie Mac is a corporate instrumentality of the United States
government whose stock is owned by the Federal Home Loan Banks. Certificates
issued by Freddie Mac represent interest in mortgages from its portfolio.
Freddie Mac guarantees payments under its certificates but this guarantee is not
backed by the full faith and credit of the United States and Freddie Mac does
not have authority to borrow from the U.S. Treasury.

The coupon rate of these instruments is lower than the interest rate on the
underlying mortgages by the amount of fees paid to the issuing agencies, usually
approximately 1/2 of 1 percent. It is not anticipated that the Portfolios'
investments will have any particular maturity. Mortgage-backed securities, due
to the scheduled periodic repayment of principal, and the possibility of
accelerated repayment of underlying mortgage obligations, fluctuate in value in
a different manner than other, non-redeemable debt securities. The Managed
Portfolio also may invest in "collateralized mortgage obligations" ("CMO's")
which are debt obligations secured by mortgage-backed securities where the
investor looks only to the issuer of the security for payment of principal and
interest.

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transactions must be done in a manner consistent with the foregoing primary
consideration, the "Rules of Fair Practice" of the National Association of
Securities Dealers, Inc. and such other policies as the Board of Trustees may
determine. (For a further discussion of portfolio trading, see the Additional
Statement, "Investment Management and Other Services.")