<PAGE>
OCC ACCUMULATION TRUST
MANAGED BY
[OPCAP ADVISORS LOGO]
We are pleased to report on the investment activities and results of the
portfolios in the OCC Accumulation Trust for the first half of 1998, a period of
generally rising stock and bond prices. Financial markets continued to benefit
in the six months from a favorable economic environment of sustained low
inflation, declining long-term interest rates and moderate economic growth.
We continue to be optimistic about the prospects for the U.S. economy. In
our view, the low-inflation economy that has driven the stock market's strong
performance of recent years remains intact.
However, even as prices of most types of securities continued to rise in
the first half, there were important investment cross-currents. In the United
States, the common stocks of many large companies advanced sharply to new highs,
but stocks of smaller companies posted more modest gains. Outside the United
States, stock prices in many European markets increased, while prices in Asia
fell because of the region's economic problems.
One potential cloud hanging over the U.S. stock market is the issue of
valuation. Having risen almost without letup for the past three-and-a-half years
at the end of the first half, the market is now highly valued by traditional
measures such as price/earnings ratios and dividend yields. The favorable
economic environment suggested that stocks could keep advancing, while high
valuations suggested the market could be vulnerable to a decline and indeed
early in the second half prices of many stocks declined substantially.
Our objective, as in all market environments, is to make as much money as
possible for the Trust's shareholders without taking large risks. We believe
that achieving consistent returns and avoiding sizable losses almost always
produces better long-term results than do sporadic gains.
We focus more on the long-term business prospects of the companies in which
the Trust is invested and less on attempting to predict the short-term direction
of the stock market. We believe some of the best investment value is found in
the stocks of companies that generate a high and sustainable level of cash flow,
where management uses that cash flow to benefit shareholders, such as through
share repurchase, dividends, high-return internal investments or acquisitions.
Through intensive research, we get to know these companies extremely well,
looking for those which have an intrinsic business value significantly greater
than the price of the stock. In time, as the merits of an undervalued company
become more widely known in the investment community, the stock price is likely
to approach or reach intrinsic value, enabling us to sell at a profit.
Rather than trading in and out of the market, which often adds to
volatility and increases transaction costs, we typically buy and hold quality
businesses for the long term. We believe our philosophy of investing in superior
businesses at reasonable prices is well suited for long-term investors seeking
to achieve excellent returns without taking large risks.
<PAGE>
EQUITY PORTFOLIO
The Equity Portfolio invests in a diverse group of large and mid-sized
companies chosen for their superior business characteristics and reasonable
stock market valuations.
The Equity Portfolio trailed its performance benchmarks in the first half
of 1998, but continued its strong results over longer periods. While we are
never happy to underperform even for short periods, our primary focus is on
achieving excellent long-term results and protecting against large losses in
down markets.
The return for the Standard & Poor's 500 Index with dividends included (S&P
500) was 17.7% in the first half. The S&P 500 is an unmanaged index of 500 of
the largest corporations weighted by market capitalization. According to BARRA,
Inc., a leading provider of analytical investment information, the 'growth'
stocks in the S&P 500 outperformed the 'value' stocks, the type owned by the
Portfolio. The S&P 500/BARRA Growth Index was up 23.1% in the half, while the
S&P 500/BARRA Value Index was up 12.1%.
The Portfolio's total return was 12.8% in the half. This compared with an
average total return of 15.6% for the funds in Lipper's Variable Insurance
Products Performance Analysis Service Report capital appreciation category. The
Portfolio's performance was 31st among the 49 funds in this Lipper category.
In addition to the effects of a challenging environment for value
investing, the Portfolio's performance in the half was dampened somewhat by an
above-average cash position. As the stock market rose to new highs, we increased
the Portfolio's cash and cash equivalents to 15% of net assets as of June 30,
1998 from 12% six months earlier. This cash is a resource to buy stocks we like
as they become available at attractive prices. The remaining 85% of the
Portfolio's net assets as of June 30, 1998 were invested in common stocks.
The Portfolio continues to deliver excellent returns over longer periods.
For the three years ended June 30, 1998, the Portfolio provided an average
annual total return of 25.6%, compared with 22.9% for the funds in the Lipper
capital appreciation category and 30.2% for the S&P 500. The Portfolio's
three-year performance was 11th among the 35 funds in this Lipper universe.
For the five years ended June 30, 1998, the Portfolio's average annual
total return of 21.3%* compared with an average annual total return of 18.8% for
the funds in the Lipper capital appreciation category and an average annual
total return of 23.1% for the S&P 500. The Portfolio's five-year performance was
fifth among the 24 funds in this Lipper category. Since its inception on August
1, 1988, the Portfolio has generated an average annual total return of 18.0%*,
compared with 18.8% for the S&P 500. Returns for the Portfolio take into account
expenses incurred by the Portfolio, but not other charges imposed by the
Variable Accounts.
As of June 30, 1998, approximately one-third of the Portfolio's net assets
were invested in companies in the financial services industry, including
insurance and banking, where many quality companies continue to sell at
reasonable prices. Our ownership of these stocks is not a bet on interest rates,
but instead reflects the superior fundamentals of the companies themselves and
their prospects for growth. The Fund also owns an eclectic group of other
companies chosen for their strong managements, high returns on capital and
dominant market positions, as well as their reasonable valuations.
In the first half of 1998, we established new positions in the common
stocks of several companies, including Boeing Co., Green Tree Financial Corp.,
Rockwell International Corp. and Union Pacific Corp. The price of Boeing stock
has declined over the past year as the company has struggled to overcome
production delays in the manufacture of aircraft. We believe this decline has
created a buying opportunity. As Boeing's production problems are resolved, the
company's earnings and cash flow are likely to increase significantly. Rockwell
International is a world leader in industrial automation, avionics and
communications and electronic commerce. Green Tree Financial is a leader in
manufactured housing mortgage loans and proved to be an excellent investment.
Immediately after the end of the half, the company was acquired by Conseco, Inc.
at a price significantly above our average purchase price.
We eliminated seven holdings in the half: Armstrong World Industry, Inc.,
Arrow Electronics, Inc., Avon Products, Inc., General Electric Co., Monsanto
Co., Solutia, Inc. and Sysco Corp. We sell a stock when it reaches our price
target, when the fundamentals that caused us to buy the stock change or when we
find another stock that offers compellingly better value. Monsanto is an
example. Its conversion from commodity chemicals to the
<PAGE>
number one position in agricultural biotechnology propelled a more-or-less
non-stop price rise for the stock over the past year. As it reached our price
target, we sold at a profit.
The Portfolio's five largest equity positions at June 30, 1998 were ACE,
Ltd., a Bermuda-based provider of excess directors and officers liability
insurance, representing 5.3% of the Portfolio's net assets; EXEL Ltd., a
strongly capitalized specialty insurance company headquartered in Bermuda, 4.9%
of net assets; Green Tree Financial Corp., which makes mortgage loans on
manufactured housing, 3.9% of net assets; Lockheed Martin Corp., a major
aerospace and defense contractor, 3.7% of net assets; and General Re Corp., a
leading reinsurance company, 3.4% of net assets.
The top five industry positions at the end of June were in the insurance
sector, 21.4% of the Portfolio's net assets; financial services, 8.9% of net
assets; aerospace/defense, 5.3% of net assets; transportation, 4.9% of net
assets; and machinery/engineering, 4.7% of net assets.
- ------------------
* Based on results of the OCC Accumulation Trust and its predecessor. On
September 16, 1994, an investment company which had commenced operations on
August 1, 1988, called Quest for Value Accumulation Trust (the 'Old Trust'),
was effectively divided into two investment funds--the Old Trust and the
present OCC Accumulation Trust (the 'Present Trust')--at which time the
Present Trust commenced operations. The total net assets of the Equity
Portfolio immediately after the transaction were $86,789,755 in the Old Trust
and $3,764,598 in the Present Trust. For the period prior to September 16,
1994, the performance figures for the Equity Portfolio of the Present Trust
reflect the performance of the Equity Portfolio of the Old Trust.
<PAGE>
SMALL CAP PORTFOLIO
The stocks of smaller companies generally underperformed larger companies
in the first half of 1998 even though the average earnings growth of small cap
companies has now outpaced large caps for four consecutive quarters. This
underperformance reflected, at least in part, investor caution about the
liquidity of small cap stocks in the event of a market downturn.
The Small Cap Portfolio has outperformed its benchmark, the Russell 2000
Index with dividends included (Russell 2000), over extended periods. From its
inception on August 1, 1988 through June 30, 1998, the Portfolio generated an
average annual total return of 14.5%*, exceeding the 13.8% average annual total
return of the Russell 2000.
However, the Portfolio's recent performance has lagged the Russell 2000 due
to a number of factors, including our defensive investment posture in a rising
stock market. In addition, 'value' styles of investing have generally
underperformed 'growth' styles in recent months. While there are often
short-term performance disparities between the two styles, those disparities
tend to even out over time. We remain disciplined in our value approach, which
is aimed at delivering excellent returns over time while controlling risk and
volatility.
In the first half of 1998, the Portfolio had a negative total return of
1.0%. This compared with the 4.9% return of the Russell 2000 and an average
total return of 7.1% for the small cap funds monitored by Lipper's Variable
Insurance Products (VIP) Performance Analysis Service. The Portfolio's
performance was 86th among the 89 funds in the Lipper small cap category.
For the three years ended June 30, 1998, the Portfolio provided an average
annual total return of 16.0%, compared with an average annual total return of
18.8% for the Russell 2000 and an average annual total return of 20.1% for the
small cap funds in the Lipper universe. The Portfolio's three-year performance
was 29th among the 39 funds in this Lipper category. For the five years ended
June 30, 1998, the Portfolio's average annual total return of 12.1%* compared
with 16.1% for the Russell 2000 and an average of 16.4% for the funds in the
Lipper small cap category. The Portfolio's five-year performance was 13th among
the 14 funds in this Lipper universe. Returns for the Portfolio take into
account expenses incurred by the Portfolio, but not separate account charges
imposed by the insurance company.
The small cap sector is a huge and dynamic marketplace consisting of
thousands of companies that have, on average, delivered high rates of investment
return over time, but often with short-term price volatility. Our objective is
to control this volatility and generate favorable returns by investing in
well-established smaller companies that have a significant record of earnings
and revenue growth, generate sizable free cash flow, have high cash flow returns
on assets and have quality balance sheets. We purchase these companies at low
valuations--that is, low price/earnings ratios and other measures of
value--relative to the overall market and to where they have traded in the past.
In the first half of 1998, we bought the stocks of such companies as CTS
Corp. (electronic components and subsystems), M.A. Hanna Co. (specialty
chemicals), Terra Nova (Bermuda) Holdings, Ltd. (worldwide provider of insurance
and reinsurance) and Volt Information Sciences, Inc. (temporary staffing for
technical positions). Each has, in our view, favorable business prospects and is
trading at a reasonable valuation.
Sales included Auspex Systems, Inc., Commscope, Inc., Oak Industries, Inc.
and Watts Industries, Inc., among others.
At June 30, 1998, the Portfolio's net assets were allocated 77% to common
stocks and 23% to cash and cash equivalents. The Portfolio's five largest equity
positions were Wang Laboratories, Inc., a systems integration and computer
maintenance firm, representing 3.6% of the Portfolio's net assets; RenaissanceRe
Holdings, Ltd., a Bermuda-based insurance company, 3.2% of net assets; A.
Schulman, Inc., which produces plastics and resins, 2.9% of net assets;
Flowserve Corp., which manufactures fluid handling equipment including pumps and
valves, 2.9% of net assets; and United Wisconsin Services, Inc., a managed care
health services provider, 2.8% of net assets.
<PAGE>
Major industry positions were in the insurance sector, representing 15.5%
of the Portfolio's net assets; energy, 8.3% of net assets; technology, 7.8% of
net assets; health and hospitals, 7.2% of net assets; and manufacturing, 6.9% of
net assets.
- ------------------
* Based on results of the OCC Accumulation Trust and its predecessor. On
September 16, 1994, an investment company which had commenced operations on
August 1, 1988, called Quest for Value Accumulation Trust (the 'Old Trust'),
was effectively divided into two investment funds--the Old Trust and the
present OCC Accumulation Trust (the 'Present Trust')--at which time the
Present Trust commenced operations. The total net assets of the Small Cap
Portfolio immediately after the transaction were $139,812,573 in the Old Trust
and $8,129,274 in the Present Trust. For the period prior to September 16,
1994, the performance figures for the Small Cap Portfolio of the Present Trust
reflect the performance of the Small Cap Portfolio of the Old Trust.
<PAGE>
MANAGED PORTFOLIO
The Managed Portfolio continues with one of the best long-term performance
records in Lipper's Variable Insurance Products Performance Analysis Service
Report flexible portfolio funds category. For the five years ended June 30,
1998, the Portfolio's performance was second among the 56 funds in this Lipper
category.
The Portfolio invests in stocks, bonds and cash equivalents, with a bias
toward stocks, which have outperformed other classes of investments for nearly
every five-year period since the Depression.
In the first half of 1998, the Portfolio had a total return of 11.0%,
exceeding the average total return of 9.7% for the funds in the Lipper flexible
portfolio category. The Portfolio's six-month performance was 33rd among the 91
flexible portfolio funds monitored by Lipper. Like most funds, the Portfolio
trailed the return of 17.7% with dividends included for the Standard & Poor's
500 Index (S&P 500) in the half. The S&P 500 is an unmanaged index of 500 of the
largest corporations weighted by market capitalization, and its strong first
half gain was driven primarily by a limited number of large-capitalization
stocks.
For the three years ended June 30, 1998, the Portfolio provided an average
annual total return of 23.2%, compared with 17.9% for the funds in the Lipper
flexible portfolio category and 30.2% for the S&P 500. The Portfolio's
three-year performance was fourth among the 70 funds in this Lipper universe.
For the five years ended June 30, 1998, the Portfolio's average annual
total return of 20.9%* compared with an average annual total return of 14.0% for
the funds in the Lipper flexible portfolio category and an average annual return
of 23.1% for the S&P 500. The Portfolio's five-year performance was second among
the 56 funds in this Lipper category. Since its inception on August 1, 1988, the
Portfolio has generated an average annual total return of 20.5%*, compared with
18.8% for the S&P 500. Returns for the Portfolio take into account expenses
incurred by the Portfolio, but not other charges imposed by the Variable
Accounts.
The Portfolio performed well in the first half of 1998 despite having a
large cash position in a rising stock market. At the end of June, the
Portfolio's net assets were allocated 75% to common stocks and 25% to cash and
cash equivalents. In addition, the Portfolio had a small holding of U.S.
Treasury securities representing less than 1.0% of net assets. The Portfolio's
cash position is a buffer against market volatility and provides a resource to
buy stocks we like when available at favorable prices.
The Portfolio invests in high-return-on-capital companies run by
managements who are devoted to maximizing long-term shareholder returns. We want
to own businesses that are dominant in their industries, have barriers to entry
and can control their own destinies. In buying and holding the stocks of these
quality companies, we seek to: a) preserve capital, don't lose it; and b)
generate excellent long-term returns for the Portfolio's shareholders.
Most of the Portfolio's top holdings performed well in the first half.
McDonald's Corp. stock hit a new high amid signs the company is improving its
business performance in the U.S. while continuing to grow internationally.
Citicorp rose sharply following its April announcement of a planned merger with
Travelers Group. Boeing Co., on the other hand, was a disappointment, as the
company continues to struggle with production problems on its aircraft. As these
problems are resolved, we believe Boeing's operating earnings will increase
significantly and the stock should be a profitable investment.
During the half, we established new positions in the stocks of
AlliedSignal, Inc. (technology and manufacturing company in aerospace,
automotive components, chemicals, fibers, plastics and advanced materials
markets), ITT Industries, Inc. (diversified global manufacturer in the
automotive, defense, and electronics and fluid technology fields), Minnesota
Mining & Manufacturing Co. (leading technology and manufacturing company),
Sprint Corp. (long-distance telephone services), Textron, Inc. (multi-industry
company in aircraft, automotive, industrial and finance markets) and Unocal
Corp. (oil and gas, chemicals and special minerals company).
We sold the Portfolio's holdings of Federal National Mortgage Association
(Fannie Mae), Nike, Inc. and Union Pacific Resources Group, Inc.
The Portfolio's five largest equity positions at June 30, 1998 were
McDonald's Corp., a premier fast-food company with growing global markets,
representing 4.8% of net assets; Federal Home Loan Mortgage Corp. (Freddie Mac),
the second largest insurer of home mortgages in the United States, 3.9% of net
assets; Time
<PAGE>
Warner, Inc., a leading media and entertainment company, 3.9% of net assets;
Citicorp, a global banking and financial services company, 3.8% of net assets;
and EXEL Ltd., a strongly capitalized specialty insurance company headquartered
in Bermuda, 3.7% of net assets.
Major industry positions were in the banking sector, 9.9% of the
Portfolio's net assets; chemicals, 9.1% of net assets; food services, 7.3% of
net assets; aerospace and defense, 6.5% of net assets; and financial services,
6.3% of net assets.
- ------------------
* Based on results of the OCC Accumulation Trust and its predecessor. On
September 16, 1994, an investment company which had commenced operations on
August 1, 1988, called Quest for Value Accumulation Trust (the 'Old Trust'),
was effectively divided into two investment funds--the Old Trust and the
present OCC Accumulation Trust (the 'Present Trust')--at which time the
Present Trust commenced operations. The total net assets of the Managed
Portfolio immediately after the transaction were $682,601,380 in the Old Trust
and $51,345,102 in the Present Trust. For the period prior to September 16,
1994, the performance figures for the Managed Portfolio of the Present Trust
reflect the performance of the Managed Portfolio of the Old Trust.
<PAGE>
U.S. GOVERNMENT INCOME PORTFOLIO
U.S. Government bonds delivered favorable investment returns in the first
half of 1998, as bond prices rose in an environment of low inflation and
declining long-term interest rates.
The total return of the U.S. Government Income Portfolio was 3.7% in the
half, exceeding the 3.4% return of the Lehman Brothers Intermediate Government
Bond Index (Lehman Index), a widely followed benchmark. The Portfolio's return
matched the average annual total return of 3.7% for the general U.S. Government
funds in Lipper's Variable Insurance Products Performance Analysis Service
Report. The Portfolio's performance was 19th among the 34 funds in this Lipper
universe.
For the three years ended June 30, 1998, the Portfolio provided an average
annual total return of 6.1%, compared with the 7.0% average annual total return
for the funds in the Lipper general U.S. Government funds category and 6.7% for
the Lehman Index. The Portfolio's three-year performance was 29th among the 32
funds in this Lipper universe. From its inception on January 3, 1995 through
June 30, 1998, the Portfolio provided an average annual total return of 7.7%,
compared with 8.4% for the Lehman Index. Returns take into account expenses
incurred by the Portfolio, but not separate account charges imposed by the
insurance company.
The Portfolio is intended for investors seeking high current income from
investments in Government securities. The Portfolio invests in debt obligations
issued or guaranteed by the U.S. Government and its agencies or intermediaries.
These issues are considered to carry the least credit risk. The Portfolio
primarily owns intermediate-term securities and places a priority on maintaining
a relatively stable net asset value (NAV) per share.
Six months ago, at the end of 1997, the Portfolio's net assets were
invested 49% in U.S. Treasury securities and 51% in mortgage-related securities,
U.S. Government agency securities, corporate notes, and cash and cash
equivalents. During the first half of 1998, we reduced its holdings of U.S.
Treasuries and increased its holdings of mortgage-related securities and
Government agency securities to generate additional yield.
Consequently, at June 30, 1998, the Portfolio's net assets were allocated
40% to U.S. Treasury securities, 55% to U.S. Government agency and
mortgage-related securities, 4% to corporate notes and 1% to cash and cash
equivalents. The average maturity of the Portfolio was approximately 13.4 years
at June 30, 1998.
<PAGE>
MONEY MARKET PORTFOLIO
The Money Market Portfolio seeks maximum current income consistent with
stability of principal and liquidity. The seven-day compounded yield of the
Portfolio was 4.72% as of June 30, 1998. The average dollar-weighted portfolio
maturity was 15 days.
We manage the Portfolio conservatively, recognizing that shareholders of
money market funds view liquidity and safety of principal as their most
important objectives. Safety of principal is our first priority. Rather than
subjecting the Money Market Portfolio to additional risk to achieve a higher
return, we maintain a rigorous approach to analyzing and investing in quality
credits. These include the short-term securities of leading financial
institutions and industrial companies in the United States and abroad, as well
as marketable obligations of the United States Government, its agencies and
instrumentalities. At June 30, 1998, 77% of the Portfolio's assets were
allocated to short-term corporate notes, with the remaining assets invested in
U.S. Government agency securities.
Although the Money Market Portfolio seeks to maintain its share price at
$1.00, an investment in the Portfolio is not guaranteed or insured by the U.S.
Government, and there is no assurance that the Portfolio will maintain a
constant price of $1.00 per share.
<PAGE>
OCC ACCUMULATION TRUST JUNE 30, 1998
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited)
EQUITY PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C>
SHORT-TERM CORPORATE NOTES -- 14.4%
AUTOMOTIVE -- 3.6%
Ford Motor Credit Corp.,
$ 260,000 5.48%, 7/20/98 $ 259,248
1,065,000 5.52%, 7/20/98 1,061,897
------------
1,321,145
------------
MACHINERY/ENGINEERING -- 1.9%
700,000 Deere (John) Capital Corp.,
5.51%, 7/28/98 697,107
------------
MISCELLANEOUS FINANCIAL SERVICES -- 5.7%
675,000 American Express Credit Corp.,
5.51%, 7/20/98 673,037
Associates Corp., N.A.,
205,000 5.50%, 7/14/98 204,593
1,100,000 5.52%, 7/14/98 1,097,807
140,000 Household Finance Corp., 5.50%, 7/22/98 139,551
------------
2,114,988
------------
OIL/GAS -- 3.2%
1,205,000 Chevron USA, Inc., 5.51%, 7/28/98 1,200,021
------------
Total Short-Term Corporate Notes
(cost -- $5,333,261) $ 5,333,261
------------
<CAPTION>
- -------------------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C>
COMMON STOCKS -- 85.1%
ADVERTISING -- 2.4%
17,600 Omnicom Group $ 877,800
------------
AEROSPACE/DEFENSE -- 5.3%
10,000 Boeing Co. 445,625
3,000 General Dynamics Corp. 139,500
13,000 Lockheed Martin Corp. 1,376,375
------------
1,961,500
------------
AUTOMOTIVE -- 2.0%
18,560 LucasVarity Corp. plc ADR 738,920
------------
BANKING -- 4.4%
4,556 Citicorp 679,983
2,533 Wells Fargo & Co. 934,677
------------
1,614,660
------------
CHEMICALS -- 2.7%
9,000 du Pont (E.I.) de Nemours & Co. 671,625
7,698 Hercules, Inc. 316,580
------------
988,205
------------
COMPUTER SERVICES -- 1.2%
12,000 Sabre Group Holdings, Inc.* 456,000
------------
CONGLOMERATES -- 3.6%
6,000 Minnesota Mining & Manufacturing Co. 493,125
12,000 Textron, Inc. 860,250
------------
1,353,375
------------
<CAPTION>
- -------------------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C>
CONSUMER PRODUCTS -- 1.9%
16,000 International Flavours and Fragrances, Inc. $ 695,000
------------
DRUGS & MEDICAL PRODUCTS -- 2.1%
10,042 Becton, Dickinson & Co. 779,510
------------
ELECTRONICS -- 3.3%
10,000 Avnet, Inc. 546,875
14,000 Rockwell International Corp. 672,875
------------
1,219,750
------------
FOOD SERVICES -- 3.0%
3,715 Diageo plc ADR 179,017
13,500 McDonald's Corp. 931,500
------------
1,110,517
------------
HEALTH & HOSPITALS -- 2.4%
28,750 Tenet Healthcare Corp.* 898,437
------------
INSURANCE -- 21.4%
50,100 ACE Ltd. 1,953,900
14,744 AFLAC, Inc. 446,927
1,893 American International Group, Inc. 276,378
26,000 Everest Reinsurance Holdings, Inc. 999,375
23,452 EXEL Ltd. 1,824,859
5,000 General Re Corp. 1,267,500
7,000 Mid Ocean Ltd. 549,500
13,000 RenaissanceRe Holdings Ltd. 602,063
------------
7,920,502
------------
LEISURE -- 2.4%
22,000 Carnival Corp. 871,750
------------
MACHINERY/ENGINEERING -- 4.7%
16,000 Caterpillar, Inc. 846,000
26,000 Dover Corp. 890,500
------------
1,736,500
------------
MISCELLANEOUS FINANCIAL SERVICES -- 8.9%
19,912 Countrywide Credit Industries, Inc. 1,010,534
17,620 Federal Home Loan Mortgage Corp. 829,241
34,000 Green Tree Financial Corp. 1,455,625
------------
3,295,400
------------
PRINTING/PUBLISHING -- 2.3%
9,000 Donnelley (R.R.) & Sons Co. 411,750
12,000 Reed International plc ADR 445,500
------------
857,250
------------
RETAIL -- 2.5%
13,888 May Department Stores Co. 909,664
------------
TELECOMMUNICATIONS -- 1.2%
6,000 Sprint Corp. 423,000
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS -- 2.5%
23,000 Philip Morris Cos., Inc. 905,625
------------
TRANSPORTATION -- 4.9%
8,600 AMR Corp.* 715,950
21,000 Canadian Pacific Ltd. 595,875
11,500 Union Pacific Corp. 507,438
------------
1,819,263
------------
</TABLE>
* Non-income producing security
<PAGE>
OCC ACCUMULATION TRUST JUNE 30, 1998
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited) (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
VALUE
- --------------------------------------------------------------------------------
<S> <C>
Total Common Stocks
(cost -- $21,894,200) $ 31,432,628
------------
<C>
Total Investments
(cost -- $27,227,461) 99.5% $ 36,765,889
Other Assets in Excess of Liabilities 0.5 192,707
----- ------------
Total Net Assets 100.0% $ 36,958,596
----- ------------
----- ------------
</TABLE>
SMALL CAP PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C>
SHORT-TERM CORPORATE NOTES -- 23.3%
AUTOMOTIVE -- 4.8%
Ford Motor Credit Corp.,
$ 2,132,000 5.48%, 7/14/98 $ 2,127,781
4,833,000 5.54%, 7/14/98 4,823,331
------------
6,951,112
------------
CONGLOMERATES -- 3.1%
4,551,000 General Electric Capital Corp., 5.52%, 7/13/98 4,542,626
------------
INSURANCE -- 4.8%
7,125,000 Prudential Funding Corp., 5.55%, 7/29/98 7,094,244
------------
MACHINERY/ENGINEERING -- 4.5%
6,600,000 Deere (John) Capital Corp., 5.51%, 7/28/98 6,572,726
------------
MISCELLANEOUS FINANCIAL SERVICES -- 4.2%
6,116,000 Household Financial Corp., 5.50%, 7/22/98 6,096,378
------------
OIL/GAS -- .8%
1,153,000 Chevron USA, Inc., 5.50%, 7/20/98 1,149,653
------------
TECHNOLOGY -- 1.1%
1,660,000 IBM Credit Corp.,
5.48%, 8/6/98 1,650,903
------------
Total Short-Term Corporate Notes
(cost -- $34,057,642) $ 34,057,642
------------
<CAPTION>
- -------------------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C>
COMMON STOCKS -- 77.3%
AGRICULTURE -- .7%
32,200 Agribrands International, Inc.* $ 974,050
------------
AUTOMOTIVE -- 1.3%
31,900 Borg-Warner Automotive, Inc. 1,533,194
29,000 Dollar Thrifty Automotive Group, Inc.* 384,250
------------
1,917,444
------------
CHEMICALS -- 6.1%
68,900 Hanna (M.A.) Co. 1,261,731
43,600 McWhorter Technologies, Inc.* 1,152,675
214,500 Schulman (A.), Inc. 4,196,157
27,900 TETRA Technologies, Inc.* 460,350
86,800 Triarc Companies, Inc.* 1,904,175
------------
8,975,088
------------
<CAPTION>
- -------------------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C>
COMPUTER SERVICES -- 4.6%
85,300 BA Merchants Services, Inc.* $ 1,721,994
71,367 BancTec, Inc.* 1,650,362
71,500 The BISYS Group, Inc.* 2,931,500
19,900 Wallace Computer Services, Inc. 472,625
------------
6,776,481
------------
CONGLOMERATES -- 1.3%
125,500 GP Strategies Corp.* 1,835,437
------------
CONTAINERS -- .2%
15,000 AEP Industries, Inc.* 324,375
------------
DRUGS & MEDICAL PRODUCTS -- .5%
44,300 Vital Signs, Inc. 808,475
------------
ELECTRONICS -- 5.6%
47,600 CTS Corp. 1,404,200
82,000 Exar Corp.* 1,722,000
98,000 General Semiconductor, Inc* 967,750
55,100 Pioneer-Standard Electronics, Inc. 530,337
110,400 Watkins-Johnson Co. 2,870,400
41,900 Woodhead Industries, Inc. 644,213
------------
8,138,900
------------
ENERGY -- 8.3%
67,800 Basin Exploration, Inc.* 1,194,975
173,900 Cabot Oil & Gas Corp. 3,478,000
248,100 KCS Energy, Inc. 2,837,644
20,300 Newfield Exploration Co.* 504,962
54,100 Nuevo Energy Co.* 1,737,963
99,600 St. Mary Land & Exploration Co. 2,402,850
------------
12,156,394
------------
HEALTH & HOSPITALS -- 7.2%
50,600 Corvel Corp.* 1,973,400
147,200 Magellan Health Services, Inc* 3,735,200
22,500 Trigon Healthcare, Inc.* 814,219
142,500 United Wisconsin Services, Inc. 4,043,437
------------
10,566,256
------------
INSURANCE -- 15.5%
64,100 Annuity & Life Re Holdings Ltd.* 1,418,213
64,300 Chartwell Re Corp. 1,892,831
46,900 Chicago Title Corp.* 2,166,194
108,300 CNA Surety Corp.* 1,597,425
56,226 Delphi Financial Group, Inc.* 3,166,227
42,000 Enhance Financial Services Group, Inc. 1,417,500
70,700 E.W. Blanch Holdings, Inc. 2,598,225
15,500 Gryphon Holdings, Inc.* 255,750
36,400 Horace Mann Educators Corp. 1,255,800
102,100 RenaissanceRe Holdings Ltd. 4,728,506
71,100 Terra Nova (Bermuda) Holdings Ltd. 2,230,763
------------
22,727,434
------------
</TABLE>
* Non-income producing security
<PAGE>
OCC ACCUMULATION TRUST JUNE 30, 1998
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited) (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C>
MACHINERY/ENGINEERING -- 4.5%
7,400 Albany International Corp. $ 177,138
55,000 Ametek, Inc. 1,612,187
169,700 Flowserve Corp. 4,178,863
15,400 Kaydon Corp. 543,812
------------
6,512,000
------------
MANUFACTURING -- 6.9%
19,400 Artesyn Technologies, Inc.* 310,400
229,300 Baldwin Technology, Inc. (Class A)* 1,347,137
29,300 Belden, Inc. 897,313
66,400 Easco, Inc. 668,150
96,500 Guilford Mills, Inc. 1,930,000
161,800 Lydall, Inc.* 2,356,212
70,000 OmniQuip International, Inc. 1,295,000
46,400 Roper Industries, Inc. 1,212,200
------------
10,016,412
------------
PAPER PRODUCTS -- .4%
54,100 Rock-Tenn Co. 679,631
------------
PRINTING/PUBLISHING -- 1.7%
147,600 Hollinger International, Inc. 2,509,200
------------
PUBLIC SERVICES -- .3%
20,600 Norrell Corp. 410,712
------------
REAL ESTATE -- .1%
5,689 Security Capital Group, Inc. (Class B)* 151,469
------------
TECHNOLOGY -- 7.8%
53,600 Harman International Industries, Inc. 2,063,600
227,500 Unitrode Corp.* 2,616,250
56,000 Volt Information Sciences, Inc.* 1,519,000
204,200 Wang Laboratories, Inc.* 5,194,338
------------
11,393,188
------------
TELECOMMUNICATIONS -- .3%
7,300 TCA Cable TV, Inc. 438,000
------------
TEXTILES/APPAREL -- 3.0%
226,900 Paxar Corp.* 2,609,350
54,200 Westpoint Stevens, Inc. (Class A)* 1,788,600
------------
4,397,950
------------
TRANSPORTATION -- 1.0%
96,650 Interpool, Inc. 1,395,384
------------
Total Common Stocks
(cost -- $111,409,099) $113,104,280
------------
<C> <C>
Total Investments
(cost -- $145,466,741) 100.6% $147,161,922
Liabilities in Excess of Other Assets (0.6) (864,086)
----- ------------
Total Net Assets 100.0% $146,297,836
----- ------------
----- ------------
</TABLE>
MANAGED PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT AGENCY NOTES -- 1.5%
$11,000,000 Federal Farm Credit Bank, 5.45%, 7/23/98
(cost -- $10,963,364) $ 10,963,364
------------
SHORT-TERM CORPORATE NOTES -- 22.8%
AUTOMOTIVE -- 5.0%
Ford Motor Credit Corp.,
$ 1,755,000 5.52%, 7/20/98 $ 1,749,887
7,910,000 5.54%, 7/20/98 7,886,872
26,155,000 General Motors Acceptance Corp.,
5.54%, 7/16/98 26,094,626
------------
35,731,385
------------
CONGLOMERATES -- 3.2%
22,600,000 General Electric Capital Corp.,
5.51%, 7/20/98 22,534,278
------------
MACHINERY/ENGINEERING -- 4.6%
Deere (John) Capital Corp.,
12,835,000 5.51%, 7/28/98 12,781,959
6,080,000 5.52%, 7/13/98 6,068,813
14,000,000 5.55%, 7/30/98 13,937,408
------------
32,788,180
------------
MISCELLANEOUS FINANCIAL SERVICES -- 6.6%
Associates Corp., N.A.,
10,310,000 5.50%, 7/14/98 10,289,523
1,405,000 5.52%, 7/14/98 1,402,199
Household Finance Corp.,
1,645,000 5.48%, 7/14/98 1,641,745
3,365,000 5.50%, 7/22/98 3,354,204
3,530,000 5.52%, 7/14/98 3,522,964
27,430,000 Merrill Lynch & Co., Inc.,
5.55%, 8/3/98 27,290,450
------------
47,501,085
------------
OIL/GAS -- 3.0%
Chevron USA, Inc.,
17,790,000 5.49%, 7/28/98 17,716,749
2,795,000 5.50%, 7/20/98 2,786,887
1,405,000 5.51%, 7/28/98 1,399,194
------------
21,902,830
------------
TECHNOLOGY -- .4%
2,845,000 IBM Credit Corp.,
5.50%, 7/17/98 2,838,046
------------
Total Short-Term Corporate Notes
(cost -- $163,295,804) $163,295,804
------------
U.S. TREASURY NOTES AND BONDS -- .2%
$ 700,000 6.25%, 8/15/23 $ 749,434
297,500 7.875%, 8/15/01 317,022
------------
Total U.S. Treasury Notes and Bonds
(cost -- $877,836) $ 1,066,456
------------
</TABLE>
* Non-income producing security
<PAGE>
OCC ACCUMULATION TRUST JUNE 30, 1998
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited) (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C>
CONVERTIBLE PREFERRED STOCK -- .0%
RETAIL -- .0%
2,478 Venture Stores, Inc.,*(A)
$3.25 Conv. Pfd.
(cost -- $102,527) $ 232
------------
COMMON STOCKS -- 75.2%
AEROSPACE/DEFENSE -- 6.5%
300,000 AlliedSignal, Inc. $ 13,312,500
510,000 Boeing Co. 22,726,875
100,000 Lockheed Martin Corp. 10,587,500
------------
46,626,875
------------
BANKING -- 9.9%
310,000 BankBoston Corp. 17,243,750
180,000 Citicorp 26,865,000
22,000 M & T Bank Corp. 12,188,000
38,500 Wells Fargo & Co. 14,206,500
------------
70,503,250
------------
CHEMICALS -- 9.1%
160,000 Dow Chemical Co. 15,470,000
340,000 du Pont (E.I.) de Nemours & Co. 25,372,500
122,000 Hercules, Inc. 5,017,250
246,100 Monsanto Co. 13,750,838
200,000 Solutia, Inc. 5,737,500
------------
65,348,088
------------
CONGLOMERATES -- 5.6%
210,000 Minnesota Mining & Manufacturing Co. 17,259,375
180,000 Tenneco, Inc. 6,851,250
225,000 Textron, Inc. 16,129,687
------------
40,240,312
------------
CONSUMER PRODUCTS -- 1.5%
247,900 Mattel, Inc. 10,489,269
------------
DRUGS & MEDICAL PRODUCTS -- .9%
80,000 Becton, Dickinson & Co. 6,210,000
------------
ENERGY -- 1.8%
50,000 Triton Energy Ltd.* 1,784,375
300,000 Unocal Corp. 10,725,000
------------
12,509,375
------------
FOOD SERVICES -- 7.3%
360,000 Diageo plc ADR 17,347,500
500,000 McDonald's Corp. 34,500,000
------------
51,847,500
------------
INSURANCE -- 5.9%
401,100 ACE Ltd. 15,642,900
341,600 EXEL Ltd. 26,580,750
------------
42,223,650
------------
MACHINERY/ENGINEERING -- 3.1%
424,000 Caterpillar, Inc. 22,419,000
------------
<CAPTION>
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C>
MANUFACTURING -- 2.6%
500,000 ITT Industries, Inc. $ 18,687,500
------------
MEDIA/BROADCAST -- 3.9%
330,000 Time Warner, Inc. 28,194,375
------------
MISCELLANEOUS FINANCIAL SERVICES -- 6.3%
70,000 American Express Co. 7,980,000
145,000 Countrywide Credit Industries, Inc. 7,358,750
600,000 Federal Home Loan Mortgage Corp. 28,237,500
15,400 Transamerica Corp. 1,772,925
------------
45,349,175
------------
PAPER PRODUCTS -- 2.1%
311,000 Champion International Corp. 15,297,312
------------
PRINTING/PUBLISHING -- 2.2%
350,000 Donnelley (R.R.) & Sons Co. 16,012,500
------------
REAL ESTATE -- .3%
1,399 Security Capital Group Inc., (Class A)* 1,860,117
------------
TECHNOLOGY -- 2.3%
40,000 Computer Associates International, Inc. 2,222,500
75,000 Intel Corp. 5,559,375
440,000 National Semiconductor Corp.* 5,802,500
220,000 Unitrode Corp.* 2,530,000
------------
16,114,375
------------
TELECOMMUNICATIONS -- 3.9%
220,000 Sprint Corp. 15,510,000
600,000 Tele-Communications, Inc. (Class A)* 12,037,500
------------
27,547,500
------------
Total Common Stocks
(cost -- $430,433,930) $537,480,173
------------
<C>
Total Investments
(cost -- $605,673,461) 99.7% $712,806,029
Other Assets in Excess of Liabilities 0.3 2,370,623
----- ------------
Total Net Assets 100.0% $715,176,652
----- ------------
----- ------------
</TABLE>
U.S. GOVERNMENT INCOME PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C>
U.S. TREASURY NOTES AND BONDS -- 39.9%
$ 1,010,000 5.625%, 10/31/99 $ 1,011,101
200,000 5.875%, 11/30/01 202,032
95,000 6.25%, 4/30/01 96,766
50,000 6.50%, 10/15/06 53,093
1,550,000 7.25%, 8/15/22 1,854,668
------------
Total U.S. Treasury Notes and Bonds
(cost -- $3,170,575) $ 3,217,660
------------
</TABLE>
* Non-income producing security
(A) Venture Stores Inc. filed for bankruptcy protection under Chapter 11 on
January 20, 1998.
<PAGE>
OCC ACCUMULATION TRUST JUNE 30, 1998
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (unaudited) (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT AGENCY NOTES -- 26.5%
$ 75,000 Federal Farm Credit Bank,
8.65%, 10/1/99 $ 77,637
Federal Home Loan Bank,
345,000 6.90%, 2/7/07 369,150
100,000 8.09%, 12/28/04 112,359
155,000 8.60%, 8/25/99 159,917
Federal Home Loan Mortgage Corp.,
175,000 6.22%, 3/24/03 178,554
300,000 7.71%, 6/21/04 305,343
125,000 7.75%, 11/7/01 132,617
150,000 8.115%, 1/31/05 168,914
150,000 Federal National Mortgage Assoc.,
9.20%, 9/11/00 160,851
150,000 Private Export Funding Corp.,
9.10%, 10/30/98 151,712
100,000 Student Loan Marketing Assoc.,
7.20%, 11/9/00 103,328
Tennessee Valley Authority,
150,000 6.00%, 11/1/00 150,843
65,000 8.375%, 10/1/99 67,051
------------
Total U.S. Government Agency Notes
(cost -- $2,091,468) $ 2,138,276
------------
MORTGAGE-RELATED SECURITIES -- 27.9%
$ 262,323 Federal Home Loan Mortgage Corp.,
6.00%, 9/1/12 $ 259,781
Federal National Mortgage Assoc.,
336,963 5.50%, 5/1/03 332,309
154,050 6.00%, 3/1/13 152,365
159,675 6.50%, 5/1/26 159,374
192,593 6.50%, 1/1/28 191,809
366,832 6.50%, 2/1/28 365,339
147,461 7.00%, 1/1/10 150,686
5,345 9.00%, 8/1/02 5,493
11,952 9.50%, 12/1/06 12,343
27,613 9.50%, 3/1/19 29,822
58,062 9.50%, 12/1/19 62,404
Government National Mortgage Assoc.,
349,088 7.00%, 3/15/28 354,649
174,670 7.00%, 4/15/28 177,452
------------
Total Mortgage-Related Securities
(cost -- $2,232,265) $ 2,253,826
------------
CORPORATE NOTES -- 4.3%
CONGLOMERATES -- 1.3%
$ 100,000 General Electric Capital Corp.,
8.375%, 3/1/01 $ 105,901
------------
MISCELLANEOUS FINANCIAL SERVICES -- 3.0%
125,000 International Lease Finance Corp.,
6.125%, 11/1/99 125,305
100,000 Lehman Brothers Holdings, Inc.,
8.50%, 5/1/07 113,292
------------
238,597
------------
Total Corporate Notes
(cost -- $331,450) $ 344,498
------------
</TABLE>
<TABLE>
<S> <C> <C>
Total Investments
(cost -- $7,825,758) 98.6% $ 7,954,260
Other Assets in Excess of Liabilities 1.4 112,335
----- ------------
Total Net Assets 100.0% $ 8,066,595
----- ------------
----- ------------
</TABLE>
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT AGENCY NOTES -- 23.3%
$ 147,000 Federal Farm Credit Bank,
5.42%, 7/15/98 $ 146,690
Federal Home Loan Mortgage Corp.,
25,000 5.44%, 7/21/98 24,925
250,000 5.85%, 7/1/98 250,000
55,000 Federal National Mortgage Assoc.,
5.38%, 7/16/98 54,875
------------
Total U.S. Government Agency Notes
(amortized cost -- $476,490) $ 476,490
------------
SHORT-TERM CORPORATE NOTES -- 76.9%
AUTOMOTIVE -- 6.1%
$ 125,000 Ford Motor Credit Corp.,
5.49%, 7/15/98 $ 124,733
------------
BANKING -- 9.8%
100,000 Abbey National North America,
5.51%, 7/2/98 99,984
100,000 Svenska Handelsbanken Inc.,
5.50%, 7/9/98 99,878
------------
199,862
------------
BROKERAGE -- 6.1%
125,000 Goldman Sachs Group L.P.,
5.52%, 7/16/98 124,713
------------
CONGLOMERATES -- 6.1%
125,000 General Electric Capital Corp.,
5.53%, 7/24/98 124,558
------------
DRUGS/MEDICAL PRODUCTS -- 4.9%
100,000 Novartis Financial Corp.,
5.47%, 7/8/98 99,894
------------
INSURANCE -- 6.1%
125,000 Prudential Funding Corp.,
5.51%, 7/14/98 124,751
------------
MACHINERY/ENGINEERING -- 4.9%
100,000 Deere (John) Capital Corp.,
5.53%, 7/22/98 99,677
------------
MISCELLANEOUS FINANCIAL SERVICES -- 17.1%
125,000 Associates Corp., N.A.,
5.50%, 7/22/98 124,599
100,000 Merrill Lynch & Co., Inc.,
5.58%, 7/15/98 99,783
125,000 Norwest Financial Inc.,
5.51%, 7/16/98 124,713
------------
349,095
------------
SOVEREIGN -- 4.9%
100,000 Eksportfinans A/S,
5.56%, 7/20/98 99,707
------------
TECHNOLOGY -- 6.1%
125,000 IBM Credit Corp.,
5.50%, 7/17/98 124,694
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS -- 4.8%
100,000 Coca Cola Co.,
5.46%, 8/3/98 99,500
------------
Total Short-Term Corporate Notes
(amortized cost -- $1,571,184) $ 1,571,184
------------
</TABLE>
<TABLE>
<S> <C> <C>
Total Investments
(amortized cost -- $2,047,674) 100.2% $ 2,047,674
Liabilities In Excess of Other Assets (0.2) (4,553)
----- ------------
Total Net Assets 100.0% $ 2,043,121
----- ------------
----- ------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1998
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY
EQUITY SMALL CAP MANAGED INCOME MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ ---------------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost -- $27,227,461,
$145,466,741,
$605,673,461, $7,825,758 and
$2,047,674, respectively)... $36,765,889 $147,161,922 $712,806,029 $7,954,260 $2,047,674
Cash.......................... 91,219 104,769 14,528 10,574 2,454
Receivable from investments
sold........................ -- 2,688,619 760,947 -- --
Receivable from fund shares
sold........................ 69,121 311,519 1,283,621 12,224 --
Dividends receivable.......... 42,359 29,291 372,356 -- --
Interest receivable........... -- -- 25,238 112,247 --
Receivable from investment
adviser .................... -- -- -- -- 1,523
Other assets.................. 1,360 2,053 4,972 693 487
----------- ------------ ------------ ---------------- ----------
Total Assets........ 36,969,948 150,298,173 715,267,691 8,089,998 2,052,138
----------- ------------ ------------ ---------------- ----------
LIABILITIES
Payable for investments
purchased................... -- 3,949,459 -- -- --
Payable for fund shares
redeemed.................... 20 28,808 23,962 3,001 --
Investment advisory fee
payable..................... 810 3,186 15,181 3,848 --
Dividends payable............. -- -- -- 13,656 3,110
Other payables and accrued
expenses.................... 10,522 18,884 51,896 2,898 5,907
----------- ------------ ------------ ---------------- ----------
Total Liabilities... 11,352 4,000,337 91,039 23,403 9,017
----------- ------------ ------------ ---------------- ----------
Total Net Assets.... $36,958,596 $146,297,836 $715,176,652 $8,066,595 $2,043,121
----------- ------------ ------------ ---------------- ----------
----------- ------------ ------------ ---------------- ----------
COMPOSITION OF NET ASSETS
Par value ($.01 per share).... $ 9,465 $ 58,197 $ 157,640 $ 7,595 $ 20,433
Paid-in-capital in excess of
par......................... 25,239,132 139,409,647 584,234,659 7,841,683 2,022,889
Accumulated undistributed net
investment income........... 219,332 414,859 6,360,045 -- --
Accumulated net realized gain
(loss) on investments....... 1,952,239 4,719,952 17,291,740 88,815 (201)
Net unrealized appreciation on
investments................. 9,538,428 1,695,181 107,132,568 128,502 --
----------- ------------ ------------ ---------------- ----------
Total Net Assets.... $36,958,596 $146,297,836 $715,176,652 $8,066,595 $2,043,121
----------- ------------ ------------ ---------------- ----------
----------- ------------ ------------ ---------------- ----------
Fund shares outstanding....... 946,493 5,819,717 15,764,015 759,474 2,043,321
----------- ------------ ------------ ---------------- ----------
Net asset value per share..... $ 39.05 $ 25.14 $ 45.37 $ 10.62 $ 1.00
----------- ------------ ------------ ---------------- ----------
----------- ------------ ------------ ---------------- ----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY
EQUITY SMALL CAP MANAGED INCOME MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ----------- ----------- --------------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign
withholding taxes of
$3,203, $0, $0, $0, and
$0, respectively)........ $ 220,097 $ 384,596 $ 4,820,931 $ -- $ --
Interest.................... 154,167 594,637 3,950,953 225,482 72,022
---------- ----------- ----------- --------------- ---------
Total investment
income................. 374,264 979,233 8,771,884 225,482 72,022
---------- ----------- ----------- --------------- ---------
OPERATING EXPENSES
Investment advisory fees
(note 2)................. 131,249 526,776 2,334,663 21,693 5,181
Custodian fees (note 1G).... 9,110 14,813 32,350 9,293 6,106
Transfer and dividend
disbursing agent fees.... 4,559 3,469 5,777 3,526 4,210
Audit fees.................. 3,817 3,460 9,200 4,216 1,992
Trustees' fees and
expenses................. 5,228 10,819 12,918 5,658 5,658
Reports and notices to
shareholders............. 709 3,875 14,036 273 142
Legal fees.................. 219 521 2,227 48 50
Miscellaneous............... 590 1,003 1,578 394 169
---------- ----------- ----------- --------------- ---------
Total operating
expenses............... 155,481 564,736 2,412,749 45,101 23,508
Less: Investment advisory
fees waived and
expenses assumed (note
2)..................... -- -- -- (8,842) (10,423)
Less: Expenses offset
(note 1G).............. (549) (367) (918) (105) (132)
---------- ----------- ----------- --------------- ---------
Net operating
expenses............ 154,932 564,369 2,411,831 36,154 12,953
---------- ----------- ----------- --------------- ---------
Net investment
income.............. 219,332 414,864 6,360,053 189,328 59,069
---------- ----------- ----------- --------------- ---------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS -- NET
Net realized gain (loss) on
investments.............. 1,952,239 4,728,945 17,291,750 91,325 (10)
Net change in unrealized
appreciation
(depreciation) on
investments.............. 1,620,694 (7,935,715) 34,961,646 (11,225) --
---------- ----------- ----------- --------------- ---------
Net realized gain (loss)
and change in
unrealized appreciation
(depreciation) on
investments............ 3,572,933 (3,206,770) 52,253,396 80,100 (10)
---------- ----------- ----------- --------------- ---------
Net increase (decrease) in net
assets resulting from
operations.................. $3,792,265 ($2,791,906) $58,613,449 $ 269,428 $ 59,059
---------- ----------- ----------- --------------- ---------
---------- ----------- ----------- --------------- ---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY PORTFOLIO SMALL CAP PORTFOLIO MANAGED PORTFOLIO
------------------------ ------------------------ ------------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER ENDED JUNE DECEMBER ENDED JUNE DECEMBER
30, 31, 30, 31, 30, 31,
1998(1) 1997 1998(1) 1997 1998(1) 1997
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income....................... $ 219,332 $ 311,417 $ 414,864 $ 397,656 $ 6,360,053 $ 4,115,641
Net realized gain (loss) on investments..... 1,952,239 1,335,830 4,728,945 4,341,925 17,291,750 16,103,603
Net change in unrealized appreciation
(depreciation) on investments............. 1,620,694 4,175,591 (7,935,715) 6,375,677 34,961,646 32,559,342
----------- ----------- ------------ ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations............... 3,792,265 5,822,838 (2,791,906) 11,115,258 58,613,449 52,778,586
----------- ----------- ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Net investment income....................... (311,417) (188,895) (397,660) (226,926) (4,115,649) (2,161,818)
Net realized gains.......................... (1,335,832) (672,432) (4,342,118) (1,600,321) (16,103,608) (6,639,642)
----------- ----------- ------------ ------------ ------------ -----------
Total dividends and distributions to
shareholders............................ (1,647,249) (861,327) (4,739,778) (1,827,247) (20,219,257) (8,801,460)
----------- ----------- ------------ ------------ ------------ -----------
FUND SHARE TRANSACTIONS
Net proceeds from sales..................... 8,329,203 10,880,025 45,869,547 70,252,565 212,181,548 260,261,576
Proceeds from shares issued in connection
with the reorganization of the Bond
Portfolio (note 5)........................ -- -- -- -- -- --
Reinvestment of dividends and
distributions............................. 1,647,249 861,327 4,739,778 1,827,247 20,219,257 8,801,460
Cost of shares redeemed..................... (3,982,850) (7,725,883) (7,344,311) (5,059,988) (22,409,569) (26,977,032)
----------- ----------- ------------ ------------ ------------ -----------
Net increase (decrease) in net assets
from fund share transactions............. 5,993,602 4,015,469 43,265,014 67,019,824 209,991,236 242,086,004
----------- ----------- ------------ ------------ ------------ -----------
Total increase (decrease) in net
assets.............................. 8,138,618 8,976,980 35,733,330 76,307,835 248,385,428 286,063,130
NET ASSETS
Beginning of period......................... 28,819,978 19,842,998 110,564,506 34,256,671 466,791,224 180,728,094
----------- ---------- ------------ ------------ ------------ -----------
End of period (including undistributed
net investment income of $219,332 and
$311,417; $414,859 and $397,655;
$6,360,045 and $4,115,641; $0 and $0; and
$0 and $0, respectively).................. $36,958,596 $28,819,978 $146,297,836 $110,564,506 $715,176,652 $466,791,224
----------- ----------- ------------ ------------ ------------ ------------
----------- ----------- ------------ ------------ ------------ ------------
SHARES ISSUED AND REDEEMED
Issued...................................... 217,319 328,269 1,725,545 2,800,876 4,787,622 6,451,958
Shares issued in connection with the
reorganization of the Bond Portfolio
(note 5)................................. -- -- -- -- -- --
Issued in reinvestment of dividends and
distributions............................. 44,726 28,807 177,254 83,857 466,850 243,943
Redeemed.................................... (104,785) (227,653) (275,355) (207,710) (505,159) (672,569)
---------- ----------- ---------- ------------ ------------ -----------
Net increase (decrease)................... 157,260 129,423 1,627,444 2,677,023 4,749,313 6,023,332
---------- ---------- ----------- ------------ ------------ -----------
---------- ---------- ----------- ------------ ------------ -----------
<CAPTION>
U.S. GOVERNMENT
INCOME PORTFOLIO MONEY MARKET PORTFOLIO
------------------------ ------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED JUNE DECEMBER ENDED JUNE DECEMBER
30, 31, 30, 31,
1998(1) 1997 1998(1) 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income....................... $ 189,328 $ 328,172 $ 59,069 $ 200,118
Net realized gain (loss) on investments..... 91,325 13,044 (10) (178)
Net change in unrealized appreciation
(depreciation) on investments............. (11,225) 124,161 -- --
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations............... 269,428 465,377 59,059 199,940
----------- ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income....................... (189,328) (328,172) (59,069) (200,118)
Net realized gains.......................... -- (7,663) -- --
----------- ----------- ----------- -----------
Total dividends and distributions to
shareholders............................ (189,328) (335,835) (59,069) (200,118)
----------- ----------- ----------- -----------
FUND SHARE TRANSACTIONS
Net proceeds from sales..................... 1,875,493 2,093,607 1,037,572 7,068,886
Proceeds from shares issued in connection
with the reorganization of the Bond
Portfolio (note 5)........................ -- 2,172,639 -- --
Reinvestment of dividends and
distributions............................. 175,007 335,840 55,960 200,008
Cost of shares redeemed..................... (1,047,280) (1,170,351) (1,216,468) (10,381,691)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets from
fund share transactions................. 1,003,220 3,431,735 (122,936) (3,112,797)
----------- ----------- ----------- -----------
Total increase (decrease) in net
assets.............................. 1,083,320 3,561,277 (122,946) (3,112,975)
NET ASSETS
Beginning of period......................... 6,983,275 3,421,998 2,166,067 5,279,042
----------- ----------- ----------- -----------
End of period (including undistributed net
investment income of $219,332 and
$311,417; $414,859 and $397,655;
$6,360,045 and $4,115,641; $0 and $0; and
$0 and $0, respectively).................. $8,066,595 $6,983,275 $2,043,121 $2,166,067
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
SHARES ISSUED AND REDEEMED
Issued...................................... 177,687 202,361 1,037,572 7,068,886
Shares issued in connection with the
reorganization of the Bond Portfolio
(note 5).................................. -- 212,587 -- --
Issued in reinvestment of dividends and
distributions............................. 16,563 32,289 55,960 200,008
Redeemed.................................... (99,150) (112,598) (1,216,468) (10,381,691)
----------- ----------- ----------- -----------
Net increase (decrease)................... 95,100 334,639 (122,936) (3,112,797)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
- ------------------
(1) Unaudited
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1998
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
OCC Accumulation Trust (the 'Trust') was organized May 12, 1994 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end, management investment company.
The Equity Portfolio, the Small Cap Portfolio, the Managed Portfolio, the U.S.
Government Income Portfolio and the Money Market Portfolio (collectively, the
'Portfolios') are five of seven portfolios offered in the Trust. OpCap Advisors
(the 'Adviser'), a subsidiary of Oppenheimer Capital, serves as the Trust's
investment adviser. The accompanying financial statements and notes thereto are
those of the Portfolios. The Trust is an investment vehicle for variable annuity
and variable life insurance contracts of various life insurance companies, and
qualified pension and retirement plans. Each portfolio is authorized to issue an
unlimited number of shares of beneficial interest at $.01 par value.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements:
(A) VALUATION OF INVESTMENTS
The Money Market Portfolio: Portfolio securities are valued at amortized
cost, which approximates market value. The amortized cost method involves
valuing a security at cost on the date of purchase and thereafter assuming a
constant dollar amortization to maturity of the difference between the principal
amount due at maturity and the initial cost of the security. The Equity, Small
Cap, Managed and U.S. Government Income Portfolios: Investment securities, other
than debt securities, listed on a national securities exchange or traded in the
over-the-counter National Market System are valued each business day at the last
reported sale price; if there are no such reported sales, the securities are
valued at their last quoted bid price. Other securities traded over-the-counter
and not part of the National Market System are valued at the last quoted bid
price. Investment debt securities (other than short-term obligations) are valued
each business day by an independent pricing service (approved by the Board of
Trustees) using methods which include current market quotations from a major
market maker in the securities and trader-reviewed 'matrix' prices. Short-term
debt securities having a remaining maturity of sixty days or less are valued at
amortized cost or amortized value, which approximates market value. Any
securities or other assets for which market quotations are not readily available
are valued at their fair value as determined in good faith by the Board of
Trustees. The ability of issuers of debt instruments to meet their obligations
may be affected by economic developments in a specific industry or region.
(B) FEDERAL INCOME TAXES
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to shareholders; accordingly, no Federal
income tax provision is required.
(C) INVESTMENT TRANSACTIONS AND OTHER INCOME
Investment transactions are accounted for on the trade date. In determining
the gain or loss from the sale of investments, the cost of investments sold has
been determined on the basis of identified cost. Dividend income is recorded on
the ex-dividend date and interest income is accrued as earned. Discounts or
premiums on debt securities purchased are accreted or amortized to interest
income over the lives of the respective securities.
(D) DIVIDENDS AND DISTRIBUTIONS
The Equity, Small Cap and Managed Portfolios: Dividends and distributions
to shareholders from net investment income and net realized capital gains, if
any, are declared and paid at least annually. The U.S. Government Income and
Money Market Portfolios: Dividends from net investment income are declared daily
and paid monthly. Distributions from net realized capital gains, if any, are
declared and paid at least annually.
The Trust's portfolios record dividends and distributions to its
shareholders on the ex-dividend date. The amount of dividends and distributions
is determined in accordance with Federal income tax regulations, which
<PAGE>
OCC ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(D) DIVIDENDS AND DISTRIBUTIONS (CONTINUED)
may differ from generally accepted accounting principles. These 'book-tax'
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their Federal income tax treatment;
temporary differences do not require reclassification. To the extent dividends
and/or distributions exceed current and accumulated earnings and profits for
Federal income tax purposes, they are reported as dividends and/or distributions
of paid-in-capital or tax return of capital.
(E) ALLOCATION OF EXPENSES
Expenses specifically identifiable to a particular portfolio are borne by
that portfolio. Other expenses are allocated to each portfolio based on its net
assets in relation to the total net assets of all applicable portfolios of the
Trust or on another reasonable basis.
(F) USE OF ESTIMATES
The preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
(G) EXPENSES OFFSET
The Portfolios benefit from an expense offset arrangement with its
custodian bank where uninvested cash balances earn credits that reduce monthly
fees. Had these cash balances been invested in income producing securities, they
would have generated income for the Portfolios.
(2) INVESTMENT ADVISORY FEE
The investment advisory fee is accrued daily and payable monthly to the
Adviser, and is computed as a percentage of each Portfolio's net assets as of
the close of business each day at the following annual rates: .80% for each of
the Equity, Small Cap and Managed Portfolios on the first $400 million, .75% on
the next $400 million and .70% thereafter; .60% for the U.S. Government Income
Portfolio and .40% for the Money Market Portfolio. The Adviser is contractually
obligated to waive that portion of each advisory fee and to assume any necessary
expense to limit total operating expenses of each Portfolio to 1.00% (net of
expenses offset) of average net assets on an annual basis.
(3) PURCHASES AND SALES OF SECURITIES
For the six months ended June 30, 1998, purchases and sales of investment
securities, other than short-term securities, were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT
EQUITY SMALL CAP MANAGED INCOME MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO*
---------- ----------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
Purchases......................... $7,501,662 $51,765,625 $223,360,241 $ 4,848,702 $93,118,900
Sales............................. 4,802,975 32,816,709 70,992,784 3,759,441 93,322,660
</TABLE>
- ------------------
* All short-term securities and maturities
<PAGE>
OCC ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
(4) UNREALIZED APPRECIATION (DEPRECIATION) AND COST OF INVESTMENTS FOR FEDERAL
INCOME TAX PURPOSES
At June 30, 1998, the composition of unrealized appreciation (depreciation)
on investment securities and the cost of investments for Federal income tax
purposes were as follows:
<TABLE>
<CAPTION>
APPRECIATION (DEPRECIATION) NET TAX COST
------------ -------------- ------------ ------------
<S> <C> <C> <C> <C>
Equity Portfolio................................ $ 9,965,936 ($ 427,508) $ 9,538,428 $ 27,227,461
Small Cap Portfolio............................. 10,307,298 (8,621,115) 1,686,183 145,475,739
Managed Portfolio............................... 120,016,984 (12,884,416) 107,132,568 605,673,461
U.S. Government Income Portfolio................ 129,367 (3,376) 125,991 7,828,269
Money Market Portfolio.......................... -- -- -- 2,047,674
</TABLE>
(5) ORDER OF SUBSTITUTION
On February 26, 1997, the Securities and Exchange Commission approved an
Order of Substitution (the 'Order') of shares of the U.S. Government Income
Portfolio for shares of the OCC Accumulation Trust Bond Portfolio ('Bond
Portfolio'). Pursuant to the Order, the Bond Portfolio transferred all of its
net assets to shareholders of the Bond Portfolio which were exchanged for shares
of the U.S. Government Income Portfolio with a value equivalent to the value of
the net assets received by the U.S. Government Income Portfolio, including
unrealized depreciation of securities of $2,273. In connection with the Order,
the shareholders of the Bond Portfolio received 212,587 shares of the U.S.
Government Income Portfolio. Immediately prior to the Order, the aggregate net
assets of the U.S. Government Income Portfolio were $3,870,116.
<PAGE>
OCC ACCUMULATION TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
INCOME FROM DIVIDENDS AND
INVESTMENT OPERATIONS DISTRIBUTIONS
-------------------------------------- -------------------------------------------
NET DISTRIBUTIONS
REALIZED TOTAL TO TOTAL
AND INCOME DIVIDENDS TO SHAREHOLDERS DIVIDENDS
NET ASSET UNREALIZED (LOSS) SHAREHOLDERS FROM NET AND
VALUE, NET GAIN (LOSS) FROM FROM NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAINS ON TO SHARE-
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- ----------- ------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY PORTFOLIO
Six Months Ended
June 30, 1998 (6)................ $36.52 $0.22 $4.35 $4.57 ($0.39) ($1.65) ($ 2.04)
Year Ended
December 31, 1997................ 30.07 0.39 7.34 7.73 (0.28) (1.00) (1.28)
Year Ended
December 31, 1996................ 25.05 0.21 5.52 5.73 (0.24) (0.47) (0.71)
Year Ended
December 31, 1995................ 18.12 0.31 6.71 7.02 (0.09) -- (0.09)
September 16, 1994 (3) to December
31, 1994......................... 18.57 0.09 (0.54) (0.45) -- -- --
<CAPTION>
RATIOS
---------------------------------------------
RATIO
OF NET
OPERATING RATIO
EXPENSES OF NET
NET NET TO INVESTMENT
ASSET ASSETS, AVERAGE INCOME
VALUE, END OF NET TO PORTFOLIO AVERAGE
END OF TOTAL PERIOD ASSETS AVERAGE TURNOVER COMMISSION
PERIOD RETURN* (000'S) (5) NET ASSETS RATE RATE
------ ------- -------- --------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY PORTFOLIO
Six Months Ended
June 30, 1998 (6)................ $39.05 12.8% $36,959 0.95%(2,4) 1.34%(2,4) 17% $ 0.0587
Year Ended
December 31, 1997................ 36.52 26.6% 28,820 0.99% 1.25% 32% 0.0557
Year Ended
December 31, 1996................ 30.07 23.4% 19,843 0.93%(1) 1.29%(1) 36% 0.0588
Year Ended
December 31, 1995................ 25.05 38.9% 9,036 0.72%(1) 1.74%(1) 31% --
September 16, 1994 (3) to December
31, 1994......................... 18.12 (2.4%) 4,281 0.72%(1,4) 1.80%(1,4) 6% --
</TABLE>
(1) 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.
<TABLE>
<CAPTION>
INCOME FROM DIVIDENDS AND
INVESTMENT OPERATIONS DISTRIBUTIONS
-------------------------------------- -------------------------------------------
NET DISTRIBUTIONS
REALIZED TOTAL TO TOTAL
AND INCOME DIVIDENDS TO SHAREHOLDERS DIVIDENDS
NET ASSET UNREALIZED (LOSS) SHAREHOLDERS FROM NET AND
VALUE, NET GAIN (LOSS) FROM FROM NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAINS ON TO SHARE-
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- ----------- ------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
SMALL CAP PORTFOLIO
Six Months Ended
June 30, 1998 (6)................ $26.37 $0.06 ($0.26) ($0.20) ($0.09) ($0.94) ($ 1.03)
Year Ended
December 31, 1997................ 22.61 0.08 4.73 4.81 (0.13) (0.92) (1.05)
Year Ended
December 31, 1996................ 19.91 0.14 3.45 3.59 (0.25) (0.64) (0.89)
Year Ended
December 31, 1995................ 17.38 0.26 2.37 2.63 (0.05) (0.05) (0.10)
September 16, 1994 (3) to December
31, 1994......................... 17.49 0.06 (0.17) (0.11) -- -- --
<CAPTION>
RATIOS
--------------------------------------------------------
RATIO
OF NET
OPERATING RATIO
EXPENSES OF NET
NET NET TO INVESTMENT
ASSET ASSETS, AVERAGE INCOME
VALUE, END OF NET TO PORTFOLIO AVERAGE
END OF TOTAL PERIOD ASSETS AVERAGE TURNOVER COMMISSION
PERIOD RETURN* (000'S) (5) NET ASSETS RATE RATE
------ ------- -------- --------- ------------ -------- ----------
SMALL CAP PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended
June 30, 1998 (6)............... $25.14 (1.0%) $146,298 0.86%(2,4) 0.63%(2,4) 29% $ 0.0570
Year Ended
December 31, 1997................ 26.37 22.2% 110,565 0.97% 0.64% 68% 0.0549
Year Ended
December 31, 1996................ 22.61 18.7% 34,257 0.93%(1) 1.03%(1) 50% 0.0493
Year Ended
December 31, 1995................ 19.91 15.2% 16,004 0.74%(1) 1.75%(1) 69% --
September 16, 1994 (3) to December
31, 1994......................... 17.38 (0.6%) 9,210 0.74%(1,4) 1.22%(1,4) 32% --
</TABLE>
(1) 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.
<TABLE>
<CAPTION>
INCOME FROM DIVIDENDS AND
INVESTMENT OPERATIONS DISTRIBUTIONS
-------------------------------------- -------------------------------------------
NET DISTRIBUTIONS
REALIZED TOTAL TO TOTAL
AND INCOME DIVIDENDS TO SHAREHOLDERS DIVIDENDS
NET ASSET UNREALIZED (LOSS) SHAREHOLDERS FROM NET AND
VALUE, NET GAIN (LOSS) FROM FROM NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAINS ON TO SHARE-
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- ----------- ------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
MANAGED PORTFOLIO
Six Months Ended
June 30, 1998 (6)................ $42.38 $0.36 $4.25 $4.61 ($0.33) ($1.29) ($ 1.62)
Year Ended
December 31, 1997................ 36.21 0.34 7.45 7.79 (0.40) (1.22) (1.62)
Year Ended
December 31, 1996................ 30.14 0.43 6.31 6.74 (0.41) (0.26) (0.67)
Year Ended
December 31, 1995................ 20.83 0.42 9.02 9.44 (0.13) -- (0.13)
September 16, 1994 (3) to December
31, 1994......................... 21.80 0.14 (1.11) (0.97) -- -- --
<CAPTION>
RATIOS
----------------------------------------------
RATIO
OF NET
OPERATING RATIO
EXPENSES OF NET
NET NET TO INVESTMENT
ASSET ASSETS, AVERAGE INCOME
VALUE, END OF NET TO PORTFOLIO AVERAGE
END OF TOTAL PERIOD ASSETS AVERAGE TURNOVER COMMISSION
PERIOD RETURN* (000'S) (5) NET ASSETS RATE RATE
------ ------- -------- --------- ------------ -------- ----------
MANAGED PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended
June 30, 1998 (6)................ $45.37 11.0% $715,177 0.81%(2,4) 2.13%(2,4) 15% $ 0.0583
Year Ended
December 31, 1997................ 42.38 22.3% 466,791 0.87% 1.42% 32% 0.0571
Year Ended
December 31, 1996................ 36.21 22.8% 180,728 0.84%(1) 1.66%(1) 27% 0.0592
Year Ended
December 31, 1995................ 30.14 45.6% 99,188 0.66%(1) 1.85%(1) 22% --
September 16, 1994 (3) to December
31, 1994......................... 20.83 (4.4%) 54,943 0.66%(1,4) 2.34%(1,4) 8% --
</TABLE>
(1) 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.
<TABLE>
<CAPTION>
INCOME FROM DIVIDENDS AND
INVESTMENT OPERATIONS DISTRIBUTIONS
-------------------------------------- -------------------------------------------
NET DISTRIBUTIONS
REALIZED TOTAL TO TOTAL
AND INCOME DIVIDENDS TO SHAREHOLDERS DIVIDENDS
NET ASSET UNREALIZED (LOSS) SHAREHOLDERS FROM NET AND
VALUE, NET GAIN (LOSS) FROM FROM NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAINS ON TO SHARE-
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- ----------- ------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT INCOME PORTFOLIO
Six Months Ended
June 30, 1998 (6)................ $10.51 $0.27 $0.11 $0.38 ($0.27) -- ($0.27)
Year Ended
December 31, 1997................ 10.38 0.57 0.14 0.71 (0.57) ($0.01) (0.58)
Year Ended
December 31, 1996................ 10.62 0.55 (0.24) 0.31 (0.55) -- (0.55)
January 3, 1995 (3) to December
31, 1995......................... 10.00 0.60 0.68 1.28 (0.60) (0.06) (0.66)
<CAPTION>
RATIOS
----------------------------------------------
RATIO
OF NET
OPERATING RATIO
EXPENSES OF NET
NET NET TO INVESTMENT
ASSET ASSETS, AVERAGE INCOME
VALUE, END OF NET TO PORTFOLIO AVERAGE
END OF TOTAL PERIOD ASSETS AVERAGE TURNOVER COMMISSION
PERIOD RETURN* (000'S) (5) NET ASSETS RATE RATE
------ ------- -------- --------- ------------ -------- ----------
U.S. GOVERNMENT INCOME PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended
June 30, 1998 (6)................ $10.62 3.7% $8,067 1.00%(1,2,4) 5.24%(1,2,4) 52% --
Year Ended
December 31, 1997................ 10.51 7.0% 6,983 0.93%(1) 5.51%(1) 80% --
Year Ended
December 31, 1996................ 10.38 3.0% 3,422 0.96%(1) 5.27%(1) 31% --
January 3, 1995 (3) to December
31, 1995......................... 10.62 13.1% 1,442 0.75%(1,4) 5.75%(1,4) 65% --
</TABLE>
(1) 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 1.25% and 4.99%, annualized,
respectively, for the six months ended June 30, 1998, 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.
<TABLE>
<CAPTION>
INCOME FROM DIVIDENDS AND
INVESTMENT OPERATIONS DISTRIBUTIONS
-------------------------------------- -------------------------------------------
NET DISTRIBUTIONS
REALIZED TOTAL TO TOTAL
AND INCOME DIVIDENDS TO SHAREHOLDERS DIVIDENDS
NET ASSET UNREALIZED (LOSS) SHAREHOLDERS FROM NET AND
VALUE, NET GAIN (LOSS) FROM FROM NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAINS ON TO SHARE-
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- ----------- ------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET PORTFOLIO
Six Months Ended
June 30, 1998 (6)................ $1.00 $0.02 ($0.00) $0.02 ($0.02) -- ($0.02)
Year Ended
December 31, 1997................ 1.00 0.05 (0.00) 0.05 (0.05) -- (0.05)
Year Ended
December 31, 1996................ 1.00 0.04 (0.00) 0.04 (0.04) ($0.00) (0.04)
Year Ended
December 31, 1995................ 1.00 0.05 0.00 0.05 (0.05) -- (0.05)
September 16, 1994 (3) to December
31, 1994......................... 1.00 0.01 -- 0.01 (0.01) -- (0.01)
<CAPTION>
RATIOS
-------------------------------------------------
RATIO
OF NET
OPERATING RATIO
EXPENSES OF NET
NET NET TO INVESTMENT
ASSET ASSETS, AVERAGE INCOME
VALUE, END OF NET TO PORTFOLIO AVERAGE
END OF TOTAL PERIOD ASSETS AVERAGE TURNOVER COMMISSION
PERIOD RETURN* (000'S) (5) NET ASSETS RATE RATE
------ ------- -------- --------- ------------ -------- ----------
MONEY MARKET PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended
June 30, 1998 (6)................ $1.00 2.3% $2,043 1.01%(1,2,4) 4.56%(1,4) -- --
Year Ended
December 31, 1997................ 1.00 4.7% 2,166 0.98%(1) 4.57%(1) -- --
Year Ended
December 31, 1996................ 1.00 4.5% 5,279 1.01%(1) 4.43%(1) -- --
Year Ended
December 31, 1995................ 1.00 5.1% 4,356 1.00%(1) 4.94%(1) -- --
September 16, 1994 (3) to December
31, 1994......................... 1.00 1.2% 3,520 1.00%(1,4) 4.13%(1,2) -- --
</TABLE>
(1) 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 1.81% and 3.76%, annualized,
respectively, for the six months ended June 30, 1998, 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.
- ------------------
(2) Average net assets for the six months ended June 30 ,1998, were $33,084,101,
$132,785,253, $601,069,595, $7,290,849 and $2,612,140 for the Equity, Small
Cap, Managed, U.S. Government Income and Money Market Portfolios,
respectively.
(3) Commencement of operations
(4) Annualized
(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) Unaudited
* Assumes reinvestment of all dividends and distributions. Aggregate (not
annualized) total return is shown for any period shorter than one year.
<PAGE>
GLOBAL EQUITY PORTFOLIO
The Global Equity Portfolio continued its favorable performance in the
first half of 1998. The Portfolio seeks long-term growth by investing in
superior businesses, with high cash flow and good growth prospects, which trade
at reasonable valuations. Our objective is to achieve excellent long-term
performance and control risk by investing in markets worldwide.
The Portfolio delivered a total return of 16.1% in the first half of 1998,
compared with an average total return of 15.4% for the global funds in Lipper's
Variable Insurance Products Performance Analysis Service Report and a return of
16.6% on Morgan Stanley Capital International's World Index in U.S. dollars with
dividends net of local taxes included (World Index). The Portfolio's six-month
performance was 21st among the 48 funds in the Lipper global funds category.
For the three years ended June 30, 1998, the Portfolio provided an average
annual total return of 18.2%, compared with the 18.8% average annual total
return for the funds in the Lipper global funds category and 19.3% for the World
Index. The Portfolio's three-year performance was 12th among the 31 funds in
this Lipper universe. From inception on March 1, 1995 through June 30, 1998, the
Portfolio provided an average annual total return of 19.4%, compared with 20.3%
for the World Index. Returns for the Portfolio take into account expenses
incurred by the Portfolio, but not separate account charges imposed by the
insurance company.
Even as global investing provided strong returns in the first half of 1998,
there were wide disparities from market to market and region to region. The U.S.
stock market continued its remarkable advance to new highs. Many European
markets performed even better than the U.S., benefiting from a benign economic
environment. However, many Asian stock markets plunged as that region's
financial crisis continued.
As the half began, the Portfolio had relatively limited holdings in Asia,
reflecting our caution about the economic outlook and the prospect of further
currency devaluations. During the half, we reduced further the Portfolio's
holdings in the region. We are especially concerned about the economic outlook
in Japan as that nation heads into what is likely to be a severe recession.
A major investment focus for the Portfolio is our continued large holdings
in continental Europe, where we own a diverse group of quality stocks. In North
America, the Portfolio owns a select group of businesses with high returns on
capital, strong earnings prospects and reasonable stock market valuations.
During the half, we established new positions in a number of stocks, such
as Adaptec, Inc. in the United States, BTR Group plc in the United Kingdom and
Hoechst AG in Germany. Sales included, among others, Dainippon Ink & Chemicals,
Inc. in Japan, Dixon Group in the United Kingdom and Hong Kong Electric Co.
At June 30, 1998, the Portfolio's net assets were allocated 55% to non-U.S.
stocks and corporate notes, 36% to U.S. stocks and 9% to foreign and domestic
cash and cash equivalents. The largest investment positions outside the United
States were in Japan, France, Germany and Sweden.
The Portfolio's largest non-U.S. equity holdings at June 30, 1998 were ACE,
Ltd., a Bermuda-based provider of excess directors and officers liability
insurance, representing 3.3% of the Portfolio's net assets; OY Nokia, AB, a
Finnish telecommunications equipment company, 1.6% of net assets; Hoechst AG, a
pharmaceuticals and chemicals company headquartered in Germany, 1.2% of net
assets; Credit Suisse Holding AG, a Swiss-based banking and financial services
company, 1.2% of net assets; and Canal Plus, a French media company, 1.1% of net
assets.
The Portfolio's largest U.S. equity holdings were McDonald's Corp., a
premier fast-food company with growing global markets, representing 4.7% of the
Portfolio's net assets; Federal Home Loan Mortgage Corp. (Freddie Mac), the
second largest insurer of home mortgages in the United States, 4.3% of net
assets; Time Warner, Inc., a leading media and entertainment company, 4.3% of
net assets; E.I. du Pont de Nemours & Company, a major industrial company
operating in chemicals, fibers, polymers, petroleum and diversified businesses,
3.8% of net assets; and Citicorp, a global banking and financial services
company, 2.7% of net assets.
Major industry positions were in the banking sector, 11.8% of net assets;
financial services, 6.9% of net assets; chemicals, 6.2% of net assets;
insurance, 5.4% of net assets; and media/broadcasting, 5.3% of net assets.
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------- -----------
<S> <C> <C>
U.S. GOVERNMENT AGENCY NOTES - 8.5%
Federal Home Loan Bank,
$ 1,350,000 5.39%, 7/10/98...................................................................... $ 1,348,181
560,000 5.41%, 7/17/98...................................................................... 558,653
940,000 5.42%, 8/28/98...................................................................... 931,792
------------
Total U.S. Government Agency Notes (cost - $2,838,626).............................. $ 2,838,626
------------
CORPORATE NOTE - 1.6%
JAPAN - 1.5%
500,000 Sumitomo Bank Treasury Co., 9.40%, 12/29/49......................................... $ 496,920
------------
UNITED KINGDOM - .1%
pounds 11,180 Viglen Technology plc, 6.9875%, 1/1/01.............................................. 18,667
------------
Total Corporate Notes & Bonds (cost - $509,735)..................................... $ 515,587
------------
<CAPTION>
SHARES
- -------------
<S> <C> <C>
COMMON STOCKS - 89.3%
AUSTRALIA - .2%
BANKING - .2%
9,200 Macquarie Bank Ltd.................................................................. $ 82,522
------------
AUSTRIA - .7%
BANKING - .7%
3,000 Bank Austria AG+#................................................................... 243,783
------------
BERMUDA - 3.3%
INSURANCE - 3.3%
27,900 ACE Ltd............................................................................. 1,088,100
------------
BRAZIL - 2.7%
AEROSPACE - .9%
16,000 Empresa Brasileira de Aeronautica SA+............................................... 283,602
------------
ELECTRONICS - .3%
4,895 Companhia Energetica de Minas Gerais*............................................... 110,889
------------
PAPER PRODUCTS - .2%
5,600 Aracruz Celulose SA ADR............................................................. 64,050
210 Empresa Nacional de Celulosas SA+................................................... 527
------------
64,577
------------
TELECOMMUNICATIONS - 1.2%
3,600 Ericsson Telecomunicacoes SA+....................................................... 68,480
3,100 Telecomunicacoes Brasileiras........................................................ 338,481
------------
406,961
------------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
BRAZIL (CONTINUED)
TEXTILES/APPAREL - .1%
250 Compahnia de Tecidos Norte de Minas-Coteminas+...................................... $ 32,424
------------
Total Brazilian Common Stocks....................................................... 898,453
------------
CANADA - 2.6%
ENERGY - 1.1%
5,200 PanCanadian Petroleum Ltd........................................................... 77,388
7,500 Precision Drilling Corp.*........................................................... 147,548
3,621 Suncor Energy, Inc.................................................................. 125,494
------------
350,430
------------
ENTERTAINMENT - .3%
5,000 Imax Corp.*......................................................................... 113,486
------------
MANUFACTURING - .4%
5,100 Bombardier, Inc..................................................................... 138,976
------------
PRINTING/PUBLISHING - .4%
4,550 Thomson Corp........................................................................ 136,356
------------
SECURITY/INVESTIGATION - .4%
5,800 Unican Security Systems Ltd......................................................... 134,797
------------
Total Canadian Common Stocks........................................................ 874,045
------------
CHILE - .2%
CONGLOMERATES - .2%
5,500 Quinenco SA ADR..................................................................... 49,500
------------
FINLAND - 1.6%
TELECOMMUNICATIONS - 1.6%
7,200 Oy Nokia AB......................................................................... 530,701
------------
FRANCE - 6.3%
ELECTRONICS - 1.3%
2,500 Le Carbone Lorraine................................................................. 221,645
2,621 Schneider SA........................................................................ 209,006
------------
430,651
------------
ENERGY - .7%
1,800 Total SA............................................................................ 234,017
------------
INDUSTRIAL MATERIALS - .2%
4,200 Usinor.............................................................................. 64,886
------------
INSURANCE - 1.0%
2,800 AXA................................................................................. 314,935
------------
MANUFACTURING - .5%
3,156 Michelin (CGDE)..................................................................... 182,186
------------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
FRANCE (CONTINUED)
MEDIA/BROADCAST - 1.1%
1,900 Canal Plus.......................................................................... $ 355,128
------------
POWER/UTILITIES - .7%
1,149 Vivendi............................................................................. 245,358
------------
TECHNOLOGY - .3%
1,200 SGS-Thomson Microelectronics NV*.................................................... 85,052
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS - .5%
630 Groupe Danone....................................................................... 173,712
------------
Total French Common Stocks.......................................................... 2,085,925
------------
GERMANY - 5.7%
BANKING - .8%
3,150 Bayerishe Vereinsbank AG............................................................ 267,238
------------
BUILDING & CONSTRUCTION - .6%
6,250 Tarkett Sommer AG................................................................... 207,935
------------
CHEMICALS - 1.2%
8,000 Hoechst AG.......................................................................... 402,562
------------
COMPUTER SERVICES - .9%
500 SAP AG.............................................................................. 303,585
------------
DRUGS & MEDICAL PRODUCTS - .4%
2,700 Gehe AG............................................................................. 144,847
------------
INSURANCE - .8%
175 Koelnische Rueckversicherungs AG.................................................... 256,962
------------
RETAIL - 1.0%
5,200 Metro AG#........................................................................... 314,488
------------
Total German Common Stocks.......................................................... 1,897,617
------------
HONG KONG - .4%
INDUSTRIAL MATERIALS - .4%
70,000 Yue Yuen Industrial Holdings........................................................ 125,129
------------
HUNGARY - .6%
CONGLOMERATES - .1%
6,650 Benpres Holdings Corp. GDR*......................................................... 18,288
3,800 Benpres Holdings Corp. GDR Reg. S*.................................................. 9,500
------------
27,788
------------
DRUGS & MEDICAL PRODUCTS - .5%
450 Gedeon Richter Ltd., GDR............................................................ 35,550
1,550 Gedeon Richter Ltd., GDR Reg. S..................................................... 122,450
------------
158,000
------------
Total Hungarian Common Stocks....................................................... 185,788
------------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ISRAEL - 1.0%
DRUGS & MEDICAL PRODUCTS - 1.0%
9,500 Teva Pharmaceutical Industries Ltd. ADR............................................. $ 334,281
------------
ITALY - 1.2%
INSURANCE - .3%
35,000 Istituto Nazionale delle Assicurazioni.............................................. 99,479
------------
RETAIL - .9%
18,000 La Rinascente SpA................................................................... 179,316
55,000 Stefanel SpA*....................................................................... 126,608
------------
305,924
------------
Total Italian Common Stocks......................................................... 405,403
------------
JAPAN - 6.9%
AUTOMOTIVE - .7%
19,000 Calsonic Corp....................................................................... 64,584
5,000 Honda Motor Co., Ltd................................................................ 178,636
------------
243,220
------------
BANKING - .5%
189,000 Yasuda Trust & Banking.............................................................. 177,696
------------
BUILDING & CONSTRUCTION - .5%
9,000 Sho-Bond Corp....................................................................... 164,678
------------
CHEMICALS - .3%
5,000 Shin-Etsu Chemical Co. Ltd.......................................................... 86,787
------------
COMPUTER SERVICES - .5%
7,500 Konami Co. Ltd...................................................................... 161,911
------------
CONGLOMERATES - .1%
4,000 Inaba Denkisangyo Co. Ltd........................................................... 40,732
------------
CONSUMER PRODUCTS - .9%
6,000 Canon, Inc.......................................................................... 136,689
26,000 Minolta Co. Ltd..................................................................... 176,756
------------
313,445
------------
ELECTRONICS - .8%
2,000 Kyocera Corp........................................................................ 98,069
1,000 Rohm Co............................................................................. 103,059
20,000 Sodick Co.*......................................................................... 57,858
------------
258,986
------------
METALS & MINING - .1%
5,000 Toho Titanium Co.................................................................... 39,054
------------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
MISCELLANEOUS FINANCIAL SERVICES - 1.6%
2,500 Aiful Corp.......................................................................... $ 122,406
1,400 Orix Corp........................................................................... 94,872
600 Shohkoh Fund & Co. Ltd.............................................................. 147,971
3,700 Takefuji Corp....................................................................... 171,259
------------
536,508
------------
RETAIL - .3%
2,600 Circle K Co. Ltd.................................................................... 90,822
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS - .6%
11,000 Mikuni Coca-Cola Bottling Co........................................................ 189,340
------------
Total Japanese Common Stocks........................................................ 2,303,179
------------
MEXICO - .7%
BUILDING & CONSTRUCTION - .4%
26,000 Corporacion GEO, SA de CV*.......................................................... 145,256
------------
POWER/UTILITY - .3%
78,500 Grupo Elektra, SA de CV............................................................. 82,121
------------
Total Mexican Common Stocks......................................................... 227,377
------------
NETHERLANDS - 3.1%
MACHINERY/ENGINEERING - .2%
2,000 Fugro NV............................................................................ 79,695
------------
MISCELLANEOUS FINANCIAL SERVICES - .7%
3,419 ING Groep NV........................................................................ 224,037
------------
PRINTING/PUBLISHING - 1.6%
7,250 Ver Ned Uitgevers NV................................................................ 263,572
1,890 Wolters Kluwer NV................................................................... 259,593
------------
523,165
------------
PUBLIC SERVICES - .6%
6,780 Vedior NV........................................................................... 191,784
------------
Total Netherlands Common Stocks..................................................... 1,018,681
------------
NORWAY - .4%
ENERGY - .4%
8,400 Saga Petroleum ASA.................................................................. 129,324
------------
SINGAPORE - .1%
PRINTING/PUBLISHING - .1%
1,531 Singapore Press Holdings Ltd........................................................ 10,267
------------
SPAIN - 2.9%
BANKING - .7%
10,400 Argentaria SA....................................................................... 233,296
------------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
SPAIN (CONTINUED)
ELECTRICAL ENGINEERING - .6%
9,000 Endesa SA........................................................................... $ 196,903
------------
ENERGY - .7%
4,300 Repsol SA........................................................................... 236,942
------------
MANUFACTURING - .3%
8,300 Vidrala SA.......................................................................... 109,602
------------
RETAIL - .6%
5,400 Aldeasa SA.......................................................................... 192,970
------------
Total Spanish Common Stocks......................................................... 969,713
------------
SWEDEN - 5.3%
APPLIANCE & HOUSEHOLD DURABLES - .4%
11,200 Munters AB.......................................................................... 122,167
------------
BANKING - 1.4%
32,900 Norbanken AB........................................................................ 241,305
13,600 Skandinaviska Enskilda Banken....................................................... 232,748
------------
474,053
------------
DRUGS & MEDICAL PRODUCTS - .7%
11,500 ASTRA AB............................................................................ 235,018
------------
ELECTRONICS - .6%
11,000 Electrolux AB....................................................................... 188,942
------------
MACHINERY/ENGINEERING - 1.0%
11,000 ABB AB.............................................................................. 155,843
6,900 Atlas Copco AB...................................................................... 188,158
------------
344,001
------------
PAPER PRODUCTS - .9%
10,500 AssiDoman AB........................................................................ 305,416
------------
TELECOMMUNICATIONS - .3%
3,600 Telefonaktiebolaget LM Ericsson..................................................... 105,165
------------
Total Swedish Common Stocks......................................................... 1,774,762
------------
SWITZERLAND - 2.8%
BANKING - 1.4%
1,800 Credit Suisse Group................................................................. 401,175
105 Gota Bank*.......................................................................... 76,273
------------
477,448
------------
BUILDING & CONSTRUCTION - .4%
100 Holderbank Financiere Glaris AG..................................................... 127,452
------------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
SWITZERLAND (CONTINUED)
DRUGS & MEDICAL PRODUCTS - 1.0%
200 Novartis AG......................................................................... $ 333,355
------------
Total Swiss Common Stocks........................................................... 938,255
------------
UNITED KINGDOM - 4.8%
COMPUTER SERVICES - .1%
52,000 Viglen Technology plc............................................................... 22,574
------------
CONGLOMERATES - .8%
92,000 BTR plc............................................................................. 261,141
------------
CONSUMER PRODUCTS - .7%
22,000 Unilever plc........................................................................ 234,359
------------
DRUGS & MEDICAL PRODUCTS - .0%
112 SmithKline Beecham plc.............................................................. 1,368
------------
ELECTRONICS - .7%
10,900 Siebe plc........................................................................... 217,851
------------
ENTERTAINMENT - .8%
31,000 EMI Group plc....................................................................... 271,226
------------
INDUSTRIAL MATERIALS - .6%
31,600 BPB plc............................................................................. 191,528
------------
METALS & MINING - .3%
23,636 Antofagasta Holdings plc............................................................ 98,663
------------
MISCELLANEOUS FINANCIAL SERVICES - .3%
7,000 Lloyds TSB Group plc................................................................ 98,003
------------
RETAIL - .5%
28,000 Safeway plc......................................................................... 183,500
------------
Total United Kingdom Common Stocks.................................................. 1,580,213
------------
UNITED STATES - 35.8%
AEROSPACE/DEFENSE - 4.3%
18,000 Boeing Co........................................................................... 802,125
5,800 Lockheed Martin Corp................................................................ 614,075
------------
1,416,200
------------
BANKING - 4.6%
6,000 Citicorp............................................................................ 895,500
1,700 Wells Fargo & Co.................................................................... 627,300
------------
1,522,800
------------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
UNITED STATES (CONTINUED)
CHEMICALS - 4.7%
17,000 du Pont (E.I.) de Nemours & Co...................................................... $ 1,268,625
5,000 Monsanto Co......................................................................... 279,375
1,000 Solutia, Inc........................................................................ 28,688
------------
1,576,688
------------
CONGLOMERATES - 1.2%
5,000 Minnesota Mining & Manufacturing Co................................................. 410,937
------------
CONSUMER PRODUCTS - 1.1%
9,000 Mattel, Inc......................................................................... 380,813
------------
DRUGS & MEDICAL PRODUCTS - 1.5%
6,500 Becton, Dickinson & Co.............................................................. 504,562
------------
FOOD SERVICES - 4.7%
22,500 McDonald's Corp..................................................................... 1,552,500
------------
MACHINERY/ENGINEERING - 2.4%
15,000 Caterpillar, Inc.................................................................... 793,125
------------
MEDIA/BROADCAST - 4.2%
16,500 Time Warner, Inc.................................................................... 1,409,719
------------
MISCELLANEOUS FINANCIAL SERVICES - 4.3%
30,000 Federal Home Loan Mortgage Corp..................................................... 1,411,875
------------
PAPER PRODUCTS - 1.1%
7,500 Champion International, Corp........................................................ 368,906
------------
TECHNOLOGY -- .7%
5,000 Adaptec, Inc.*...................................................................... 71,563
12,000 National Semiconductor Corp.*....................................................... 158,250
------------
229,813
------------
TELECOMMUNICATIONS - 1.0%
1,300 Loral Space & Communications Ltd.*.................................................. 36,725
4,000 Sprint Corp......................................................................... 282,000
------------
318,725
------------
Total United States Common Stocks................................................... 11,896,663
------------
Total Common Stocks (cost - $24,793,363)............................................ $ 29,649,681
------------
Total Investments (cost - $28,141,724)....................................... 99.4% $ 33,003,894
Other Assets in Excess of Liabilities........................................ 0.6 203,359
---- ------------
Total Net Assets............................................................. 100.0% $ 33,207,253
------------
------------
</TABLE>
- ------------------
+ Preferred Stock
# With Rights
* Non-income producing security
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1998
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost - $28,141,724)............................................................... $ 33,003,894
Cash..................................................................................................... 43,294
Foreign currencies (cost - $6,121)....................................................................... 6,242
Receivable from investments sold......................................................................... 326,434
Foreign withholding taxes reclaimable.................................................................... 22,732
Dividends receivable..................................................................................... 17,617
Receivable from fund shares sold......................................................................... 11,056
Interest receivable...................................................................................... 748
Other assets............................................................................................. 1,180
-------------
Total Assets........................................................................................... 33,433,197
-------------
LIABILITIES
Payable from investments sold............................................................................ 205,086
Payable for fund shares redeemed......................................................................... 1,807
Foreign withholding taxes payable........................................................................ 1,604
Investment advisory fee payable.......................................................................... 725
Other payables and accrued expenses...................................................................... 16,722
-------------
Total Liabilities...................................................................................... 225,944
-------------
Total Net Assets....................................................................................... $ 33,207,253
-------------
-------------
COMPOSITION OF NET ASSETS
Par value ($.01 per share)............................................................................... $ 19,976
Paid-in-capital in excess of par......................................................................... 26,216,083
Accumulated undistributed net investment income.......................................................... 123,860
Accumulated undistributed net realized gain on investments............................................... 1,985,420
Net unrealized appreciation on investments and translation of other assets and liabilities
denominated in foreign currencies...................................................................... 4,861,914
-------------
Total Net Assets....................................................................................... $ 33,207,253
-------------
-------------
Fund shares outstanding.................................................................................. 1,997,570
-------------
Net asset value per share................................................................................ $ 16.62
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $24,232)................................................. $ 276,616
Interest................................................................................................ 62,977
----------
Total investment income.............................................................................. 339,593
----------
OPERATING EXPENSES
Investment advisory fees (note 2)....................................................................... 118,025
Custodian fees (note 1H)................................................................................ 33,033
Trustees' fees and expenses............................................................................. 5,290
Transfer and dividend disbursing agent fees............................................................. 4,605
Audit fees.............................................................................................. 4,292
Reports and notices to shareholders..................................................................... 1,165
Legal fees.............................................................................................. 228
Miscellaneous........................................................................................... 361
----------
Total operating expenses............................................................................. 166,999
Less: Expenses offset (note 1H)...................................................................... (461)
----------
Net operating expenses............................................................................. 166,538
----------
Net investment income.............................................................................. 173,055
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS -- NET
Net realized gain on investments........................................................................ 1,979,793
Net realized gain on foreign currency transactions...................................................... 5,627
Net change in unrealized appreciation (depreciation) on investments and translation of other assets and
liabilities denominated in foreign currencies........................................................ 2,039,060
----------
Net realized gain and change in unrealized appreciation (depreciation) on investments and
translation of other assets and liabilities denominated in foreign currencies..................... 4,024,480
----------
Net increase in net assets resulting from operations...................................................... $4,197,535
----------
----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(1) DECEMBER 31, 1997
---------------- --------------------
<S> <C> <C>
OPERATIONS
Net investment income........................................................... $ 173,055 $ 104,882
Net realized gain on investments................................................ 1,979,793 1,180,309
Net realized gain (loss) on foreign currency transactions....................... 5,627 (31,367)
Net change in unrealized appreciation (depreciation) on investments and
translation of other assets and liabilities denominated in foreign
currencies.................................................................... 2,039,060 1,432,604
---------------- --------------------
Net increase in net assets resulting from operations....................... 4,197,535 2,686,428
---------------- --------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income........................................................... -- (74,889)
In excess of net investment income.............................................. -- (49,195)
Net realized gains on investments............................................... -- (1,184,153)
---------------- --------------------
Total dividends and distributions to shareholders.......................... -- (1,308,237)
---------------- --------------------
FUND SHARE TRANSACTIONS
Net proceeds from sales......................................................... 5,911,371 10,888,674
Reinvestment of dividends and distributions..................................... -- 1,308,238
Cost of shares redeemed......................................................... (2,775,281) (4,673,963)
---------------- --------------------
Net increase in net assets from fund share transactions.................... 3,136,090 7,522,949
---------------- --------------------
Total increase in net assets.......................................... 7,333,625 8,901,140
NET ASSETS
Beginning of period............................................................. 25,873,628 16,972,488
---------------- --------------------
End of period (including undistributed net investment income of $123,860 and
accumulated distributions in excess of net investment income of ($49,195),
respectively)................................................................. $ 33,207,253 $ 25,873,628
---------------- --------------------
---------------- --------------------
SHARES ISSUED AND REDEEMED
Issued.......................................................................... 364,574 741,096
Issued in reinvestment of dividends and distributions........................... -- 91,400
Redeemed........................................................................ (173,530) (308,572)
---------------- --------------------
Net increase............................................................... 191,044 523,924
---------------- --------------------
---------------- --------------------
</TABLE>
- ------------------
(1) Unaudited
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1998
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
OCC Accumulation Trust (the 'Trust') was organized May 12, 1994 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company.
The Trust is authorized to issue an unlimited number of seven classes of shares
of beneficial interest at $.01 par value. The Trust is comprised of seven
portfolios: the Equity Portfolio, the Small Cap Portfolio, the Global Equity
Portfolio (the 'Portfolio'), the Managed Portfolio, the U.S. Government Income
Portfolio, the Mid Cap Portfolio and the Money Market Portfolio. OpCap Advisors
(the 'Adviser'), a subsidiary of Oppenheimer Capital, serves as the Trust's
investment adviser. The accompanying financial statements and notes thereto are
those of the Portfolio. The Trust is an investment vehicle for variable annuity
and variable life insurance contracts of various life insurance companies, and
qualified pension and retirement plans.
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements:
(A) VALUATION OF INVESTMENTS
Investment securities, other than debt securities, listed on a U.S. or
foreign securities exchange or traded in the over-the-counter National Market
System are valued each business day at the last reported sale price; if there
are no such reported sales, the securities are valued at their last quoted bid
price. Other securities traded over-the-counter and not part of the National
Market System are valued at the last quoted bid price. Investment debt
securities (other than short-term obligations) are valued each business day by
an independent pricing service (approved by the Board of Trustees) using methods
which include current market quotations from a major market maker in the
securities and trader-reviewed 'matrix' prices. Short-term debt securities
having a remaining maturity of sixty days or less are valued at amortized cost
or amortized value, which approximates market value. Any securities or other
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by the Board of Trustees. The ability of
issuers of debt instruments to meet their obligations may be affected by
economic developments in a specific industry or region.
(B) FEDERAL INCOME TAXES
It is the Portfolio's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders; accordingly,
no Federal income tax provision is required.
(C) INVESTMENT TRANSACTIONS AND OTHER INCOME
Investment transactions are accounted for on the trade date. In determining
the gain or loss from the sale of investments, the cost of investments sold has
been determined on the basis of identified cost. Dividend income is recorded on
the ex-dividend date and interest income is accrued as earned. Discounts or
premiums on debt securities purchased are accreted or amortized to interest
income over the lives of the respective securities.
(D) FOREIGN CURRENCY TRANSLATION
The books and records of the Portfolio are maintained in U.S. dollars as
follows: (1) the foreign currency market value of investment securities, other
assets and liabilities stated in foreign currencies are translated at the
exchange rate at the end of the period; and (2) purchases, sales, income and
expenses are translated at the rate of exchange prevailing on the respective
dates of such transactions. The resultant exchange gains and losses are included
in the portfolio's Statement of Operations. Since the net assets of the
Portfolio are presented at the foreign exchange rates and market prices at the
close of the period, the Portfolio does not isolate the portion of
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(D) FOREIGN CURRENCY TRANSLATION (CONTINUED)
the results of operations arising as a result of changes in the exchange rates
from fluctuations arising from changes in the market price of securities.
(E) DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders from net investment income and
net realized capital gains, if any, are declared and paid at least annually.
The Portfolio records dividends and distributions to its shareholders on
the ex-dividend date. The amount of dividends and distributions are determined
in accordance with Federal income tax regulations, which may differ from
generally accepted accounting principles. These 'book-tax' differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their Federal income tax treatment; temporary
differences do not require reclassification. To the extent dividends and/or
distributions exceed current and accumulated earnings and profits for Federal
income tax purposes, they are reported as dividends and/or distributions of
paid-in-capital or tax return of capital.
(F) ALLOCATION OF EXPENSES
Expenses specifically identifiable to a particular portfolio are borne by
that portfolio. Other expenses are allocated to each portfolio of the Trust
based on its net assets in relation to the total net assets of all applicable
portfolios of the Trust or another reasonable basis.
(G) USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
(H) EXPENSES OFFSET
The Portfolio benefits from an expense offset arrangement with its
custodian bank where uninvested cash balances earn credits that reduce monthly
fees. Had these cash balances been invested in income producing securities, they
would have generated income for the Portfolio.
(2) INVESTMENT ADVISORY FEE
The investment advisory fee is accrued daily and payable monthly to the
Adviser, and is computed as a percentage of the Portfolio's net assets as of the
close of business each day at the annual rate of .80% on the first $400 million,
.75% on the next $400 million and .70% thereafter. The Adviser is contractually
obligated to waive that portion of the advisory fee and to assume any necessary
expense to limit total operating expenses of the Portfolio to 1.25% (net of
expenses offset) of average net assets on an annual basis.
(3) PURCHASES AND SALES OF INVESTMENTS
For the six months ended June 30, 1998, purchases and sales of investment
securities, other than short-term securities, were $10,698,785 and $8,932,892,
respectively.
(4) UNREALIZED APPRECIATION (DEPRECIATION) AND COST OF INVESTMENTS FOR FEDERAL
INCOME TAX PURPOSES
Aggregate gross unrealized appreciation for securities in which there is an
excess of value over tax cost is $5,611,211 aggregate gross unrealized
depreciation for securities in which there is an excess of tax cost over value
is $790,140 and net unrealized appreciation for Federal income tax purposes is
$4,821,071. Federal income tax cost basis of portfolio securities is $28,182,823
at June 30, 1998.
<PAGE>
OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
SIX MONTHS ENDED 31,
JUNE 30, 1998 --------------------- MARCH 1, 1995 (1) TO
(7) 1997 1996 DECEMBER 31, 1995
---------------- ------- ------- --------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................ $ 14.32 $ 13.23 $ 11.61 $ 10.00
---------------- ------- ------- ----------
Income from investment operations
Net investment income............................... 0.09 0.06 0.04 0.05
Net realized and unrealized gain on investments..... 2.21 1.79 1.70 1.83
---------------- ------- ------- ----------
Total income from investment operations........... 2.30 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................................... 0.00 (0.76) (0.12) (0.27)
---------------- ------- ------- ----------
Net asset value, end of period...................... $ 16.62 $ 14.32 $ 13.23 $ 11.61
---------------- ------- ------- ----------
---------------- ------- ------- ----------
Total return (2).................................... 16.1% 14.0% 15.0% 18.9%
---------------- ------- ------- ----------
---------------- ------- ------- ----------
Net assets, end of period (000's)................... $ 33,207 $25,874 $16,972 $ 2,891
---------------- ------- ------- ----------
Ratio of net operating expenses to average net
assets (5)........................................ 1.13%(3,4) 1.19%(6) 1.42%(6) 1.25%(3,6)
---------------- ------- ------- ----------
Ratio of net investment income to average net
assets............................................ 1.17%(3,4) 0.45%(6) 0.81%(6) 1.02%(3,6)
---------------- ------- ------- ----------
Portfolio turnover rate............................. 32% 53% 40% 67%
---------------- ------- ------- ----------
Average commission rate............................. $ 0.0263 $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 six months ended June 30, 1998 were $29,750,652.
(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, and 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) Unaudited
<PAGE>
MID CAP PORTFOLIO
The Mid Cap Portfolio is the newest addition to the OCC Accumulation Trust.
We formed this portfolio on February 9, 1998 to invest in companies with stock
market capitalizations--that is, the total market value of a company's common
shares outstanding--between $500 million and $5 billion at time of purchase.
Many mid cap companies have strong growth records and are run by management
teams that own a large percentage of the stock, providing an incentive to
increase shareholder value. However, these companies are often overlooked
because they fall between the typical large cap and small cap investment
portfolios. Many analysts prefer to follow companies in the large cap sector. We
believe this relative lack of analyst coverage for mid caps provides significant
opportunities to uncover value not yet recognized by other investors.
As with the other equity portfolios in the OCC Accumulation Trust, the Mid
Cap Portfolio invests in businesses that are well managed, generate high and
sustainable returns on capital, hold strong competitive positions that protect
those returns and use their free cash flow to create shareholder value.
Moreover, we want to buy these businesses at discounts to our estimate of their
intrinsic value.
The Portfolio delivered a 5.2% total return from its inception on February
9, 1998 through June 30, 1998, compared with a total return of 6.6% for the
Standard & Poor's 400 Index with dividends included (S&P 400). The S&P 400 is an
unmanaged index of 400 mid-sized corporations weighted by market capitalization.
A priority throughout the period was to assemble a diversified portfolio of
stocks that meet our value criteria. At the end of June, 88% of the Portfolio's
net assets were invested in common stocks and 12% were in cash and cash
equivalents. The Portfolio's five largest holdings at June 30, 1998 were Sabre
Group Holdings, Inc., which operates an electronic travel reservations system
and provides information technology services, representing 5.2% of the
Portfolio's net assets; Green Tree Financial Corp., which provides mortgage
loans on manufactured housing, 4.8% of net assets; WPP Group plc, one of the
world's leading advertising and specialty communications services firms, 4.7% of
net assets; Countrywide Credit Industries, Inc., which originates and services
home mortgages, 4.1% of net assets; and LucasVarity plc, an automotive parts and
aerospace components supplier, 4.0% of net assets. Immediately after the end of
the half, Green Tree Financial was acquired by Conseco, Inc. at a significant
premium to our average purchase price.
Sabre Group, the Portfolio's largest position, helps illustrate our value
philosophy. The company was formed in the 1960s as the computer reservation
system of American Airlines and went public in 1996. Sabre Group operates the
leading travel reservations service in the United States and is one of the
global leaders as well. We like the company because of its growth prospects,
high returns on capital, large market share and reasonable valuation. In
addition to its electronic reservations service, the company has a management
information consulting business which sells software, runs systems and provides
technical advice, primarily to airlines and other lodging and transportation
companies. This business should continue to grow rapidly.
The Portfolio's third largest holding is WPP Group. Half of WPP's revenues
come from traditional advertising, a profitable but mature market. Its operating
units in this sector include J. Walter Thompson Company and Ogilvy & Mather
Worldwide, advertising agencies with solid long-term reputations. The other half
comes from specialty communications and nontraditional and interactive
advertising, which are growing rapidly in revenues and profitability. In the
early 1990s, WPP encountered severe financial difficulties because of
undisciplined acquisitions. Under the leadership of its chief executive officer,
Martin Sorrell, the company turned its financial performance around by
researching, benchmarking and copying best industry practices. The impact of
this change is reflected in WPP's record of improving profitability and new
business wins, as it approaches the performance of its best managed and most
profitable competitors. Yet, investors have been slow to recognize these
changes, and the stock continues to be valued at a discount to its competitors,
providing an opportunity to acquire a quality company at an attractive price.
The Portfolio's top five industry positions at the end of June were in the
insurance sector, 13.6% of net assets; electronics, 9.8% of net assets;
financial services, 8.9% of net assets; manufacturing, 7.7% of net assets; and
real estate, 5.9% of net assets.
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------- ----------
<S> <C> <C>
U.S. GOVERNMENT AGENCY NOTES - 12.4%
NOTES - 12.4% Federal Home Loan Mortgage Corp.,
$ 30,000 5.45%, 7/14/98....................................................................... $ 29,941
57,000 5.85%, 7/1/98........................................................................ 57,000
75,000 Federal National Mortgage Assoc.,
5.39%, 7/15/98..................................................................... 74,843
----------
Total U.S. Government Agency Notes (cost - $161,784)................................. $ 161,784
----------
<CAPTION>
SHARES
- -------------
<S> <C> <C>
COMMON STOCKS - 87.3%
ADVERTISING - 5.8%
300 Omnicom Group........................................................................ $ 14,963
900 WPP Group plc ADR.................................................................... 60,525
----------
75,488
----------
AUTOMOTIVE - 4.0%
1,300 LucasVarity Corp. plc ADR............................................................ 51,756
----------
BUILDING & CONSTRUCTION - 3.6%
250 Armstrong World Industries, Inc...................................................... 16,844
1,000 Oakwood Homes Corp................................................................... 30,000
----------
46,844
----------
CHEMICALS - 1.1%
1,600 Methanex Corp.*...................................................................... 13,800
----------
COMPUTER SERVICES - 5.1%
1,750 Sabre Group Holdings, Inc.*.......................................................... 66,500
----------
CONSUMER PRODUCTS - 3.1%
300 International Flavors & Fragrances, Inc.............................................. 13,031
750 Polaroid Corp........................................................................ 26,672
----------
39,703
----------
DRUGS & MEDICAL PRODUCTS - 1.2%
450 Teva Pharmaceutical Industries Ltd. ADR.............................................. 15,834
----------
ELECTRONICS - 9.8%
1,300 Allegheny Teledyne, Inc.............................................................. 29,737
900 Arrow Electronics, Inc............................................................... 19,575
550 Avnet, Inc........................................................................... 30,078
1,150 Solectron Corp....................................................................... 48,372
----------
127,762
----------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ENERGY - 3.6%
550 Anadarko Petroleum Corp.............................................................. $ 36,953
300 Nuevo Energy Co.*.................................................................... 9,638
----------
46,591
----------
HOTELS - .9%
1,000 Homestead Village, Inc.*............................................................. 11,875
----------
INSURANCE - 13.6%
1,300 ACE Ltd.............................................................................. 50,700
306 Delphi Financial Group, Inc. (Class A)............................................... 17,232
1,100 Everest Reinsurance Holdings, Inc.................................................... 42,281
600 Protective Life Corp................................................................. 22,012
650 RenaissanceRe Holdings Ltd........................................................... 30,103
350 W.R. Berkley Corp.................................................................... 14,022
----------
176,350
----------
MACHINERY/ENGINEERING - 2.2%
850 Dover Corp........................................................................... 29,112
----------
MANUFACTURING - 4.2%
200 Carlisle Companies, Inc.............................................................. 8,613
950 Crane Co............................................................................. 46,134
----------
54,747
----------
MISCELLANEOUS FINANCIAL SERVICES - 8.9%
1,050 Countrywide Credit Industries, Inc................................................... 53,288
1,450 Green Tree Financial Corp............................................................ 62,078
----------
115,366
----------
PRINTING/PUBLISHING - 3.3%
2,500 Hollinger International, Inc......................................................... 42,500
----------
REAL ESTATE - 5.9%
1,200 Security Capital Group, Inc. (Class B)*.............................................. 31,950
1,800 Security Capital Industrial Trust.................................................... 45,000
----------
76,950
----------
TECHNOLOGY - 2.6%
1,400 Adaptec, Inc.*....................................................................... 20,037
500 General Instrument Corp.*............................................................ 13,594
----------
33,631
----------
TEXTILES/APPAREL - 5.3%
2,600 Shaw Industries, Inc................................................................. 45,825
700 Unifi, Inc........................................................................... 23,975
----------
69,800
----------
</TABLE>
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
TRANSPORTATION - 1.2%
600 Air Express International Corp....................................................... $ 16,050
----------
OTHER - 1.9%
900 Millipore Corp....................................................................... 24,525
----------
Total Common Stocks (cost - $1,095,952).............................................. $1,135,184
----------
Total Investments (cost - $1,257,736)......................................... 99.7% $1,296,968
Other Assets in Excess of Liabilities......................................... 0.3 3,565
----- ----------
Total Net Assets.............................................................. 100.0% $1,300,533
----- ----------
----- ----------
</TABLE>
- ------------------
* Non-income producing security
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1998
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost - $1,257,736)................................................................. $1,296,968
Cash...................................................................................................... 555
Receivable from investments sold.......................................................................... 12,858
Receivable from fund shares sold.......................................................................... 11,241
Dividends receivable...................................................................................... 1,302
Other assets.............................................................................................. 6,598
----------
Total Assets............................................................................................ 1,329,522
----------
LIABILITIES
Payable for investments purchased......................................................................... 23,130
Other payables and accrued expenses....................................................................... 5,859
----------
Total Liabilities....................................................................................... 28,989
----------
Total Net Assets........................................................................................ $1,300,533
----------
----------
COMPOSITION OF NET ASSETS
Par value ($.01 per share)................................................................................ $ 1,236
Paid-in-capital in excess of par.......................................................................... 1,243,610
Accumulated undistributed net investment income........................................................... 3,270
Accumulated undistributed net realized gain on investments................................................ 13,185
Net unrealized appreciation on investments................................................................ 39,232
----------
Total Net Assets........................................................................................ $1,300,533
----------
----------
Fund shares outstanding................................................................................... 123,637
----------
Net asset value per share................................................................................. $ 10.52
----------
----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD FEBRUARY 9, 1998 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $112)....................................................... $ 4,467
Interest................................................................................................... 3,017
---------
Total investment income................................................................................. 7,484
---------
OPERATING EXPENSES
Reports and notices to shareholders........................................................................ 5,348
Custodian fees (note 1G)................................................................................... 5,223
Transfer and dividend disbursing agent fees................................................................ 3,754
Audit fees................................................................................................. 3,637
Investment advisory fees (note 2).......................................................................... 3,371
Legal fees................................................................................................. 44
Miscellaneous.............................................................................................. 384
---------
Total operating expenses................................................................................ 21,761
Less: Investment advisory fees waived and expenses assumed (note 2)..................................... (17,319)
Less: Expenses offset (note 1G)......................................................................... (228)
---------
Net operating expenses................................................................................ 4,214
---------
Net investment income................................................................................. 3,270
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET
Net realized gain on investments........................................................................... 13,185
Net unrealized appreciation on investments................................................................. 39,232
---------
Net realized gain and unrealized appreciation on investments.......................................... 52,417
---------
Net increase in net assets resulting from operations......................................................... $ 55,687
---------
---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 9, 1998 (1)
TO JUNE 30, 1998
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<S> <C>
OPERATIONS
Net investment income.............................................................................. $ 3,270
Net realized gain on investments................................................................... 13,185
Net unrealized appreciation on investments......................................................... 39,232
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Net increase in net assets resulting from operations.......................................... 55,687
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DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income.............................................................................. --
Net realized gains................................................................................. --
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Total dividends and distributions to shareholders............................................. --
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FUND SHARE TRANSACTIONS
Net proceeds from sales............................................................................ 1,244,913
Reinvestment of dividends and distributions........................................................ --
Cost of shares redeemed............................................................................ (67)
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Net increase in net assets from fund share transactions....................................... 1,244,846
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Total increase in net assets............................................................. 1,300,533
NET ASSETS
Beginning of period................................................................................ --
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End of period (including undistributed net investment income of $3,270)............................ $1,300,533
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SHARES ISSUED AND REDEEMED
Issued............................................................................................. 123,643
Issued in reinvestment of dividends and distributions.............................................. --
Redeemed........................................................................................... (6)
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Net increase.................................................................................. 123,637
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(1) Commencement of operations
See accompanying notes to financial statements.
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1998
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
OCC Accumulation Trust (the 'Trust') was organized May 12, 1994 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company.
The Trust is authorized to issue an unlimited number of seven classes of shares
of beneficial interest at $.01 par value. The Trust is comprised of seven
portfolios: the Equity Portfolio, the Small Cap Portfolio, the Global Equity
Portfolio, the Managed Portfolio, the U.S. Government Income Portfolio, the Mid
Cap Portfolio (the 'Portfolio') and the Money Market Portfolio. OpCap Advisors
(the 'Adviser'), a subsidiary of Oppenheimer Capital, serves as the Trust's
investment adviser. The accompanying financial statements and notes thereto are
those of the Portfolio. The Trust is an investment vehicle for variable annuity
and variable life insurance contracts of various life insurance companies, and
qualified pension and retirement plans.
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements:
(A) VALUATION OF INVESTMENTS
Investment securities, other than debt securities, listed on a national
securities exchange or traded in the over-the-counter National Market System are
valued each business day at the last reported sale price; if there are no such
reported sales, the securities are valued at their last quoted bid price. Other
securities traded over-the-counter and not part of the National Market System
are valued at the last quoted bid price. Investment debt securities (other than
short-term obligations) are valued each business day by an independent pricing
service (approved by the Board of Trustees) using methods which include current
market quotations from a major market maker in the securities and
trader-reviewed 'matrix' prices. Short-term debt securities having a remaining
maturity of sixty days or less are valued at amortized cost or amortized value,
which approximates market value. Any securities or other assets for which market
quotations are not readily available are valued at their fair value as
determined in good faith by the Board of Trustees. The ability of issuers of
debt instruments to meet their obligations may be affected by economic
developments in a specific industry or region.
(B) FEDERAL INCOME TAXES
It is the Portfolio's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders; accordingly,
no Federal income tax provision is required.
(C) INVESTMENT TRANSACTIONS AND OTHER INCOME
Investment transactions are accounted for on the trade date. In determining
the gain or loss from the sale of investments, the cost of investments sold has
been determined on the basis of identified cost. Dividend income is recorded on
the ex-dividend date and interest income is accrued as earned. Discounts or
premiums on debt securities purchased are accreted or amortized to interest
income over the lives of the respective securities.
(D) DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders from net investment income and
net realized capital gains, if any, are declared and paid at least annually.
The Portfolio records dividends and distributions to its shareholders on
the ex-dividend date. The amount of dividends and distributions is determined in
accordance with Federal income tax regulations, which may differ from generally
accepted accounting principles. These 'book-tax' differences are either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their Federal income tax treatment; temporary differences do not
require
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1998
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(D) DIVIDENDS AND DISTRIBUTIONS (CONTINUED)
reclassification. To the extent dividends and/or distributions exceed current
and accumulated earnings and profits for Federal income tax purposes, they are
reported as dividends and/or distributions of paid-in-capital or tax return of
capital.
(E) ALLOCATION OF EXPENSES
Expenses specifically identifiable to a particular portfolio are borne by
that portfolio. Other expenses are allocated to each portfolio based on its net
assets in relation to the total net assets of all applicable portfolios of the
Trust or another reasonable basis.
(F) USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
(G) EXPENSES OFFSET
The Portfolio benefits from an expense offset arrangement with its
custodian bank where uninvested cash balances earn credits that reduce monthly
fees. Had these cash balances been invested in income producing securities, they
would have generated income for the Portfolio.
(2) INVESTMENT ADVISORY FEE
The investment advisory fee is accrued daily and payable monthly to the
Adviser, and is computed as a percentage of the Portfolio's net assets as of the
close of business each day at the annual rate of .80% on the first $400 million,
.75% on the next $400 million and .70% thereafter. The Adviser is contractually
obligated to waive that portion of the advisory fee and to assume any necessary
expense to limit total operating expenses of the Portfolio to 1.00% (net of
expenses offset) of average net assets on an annual basis.
(3) PURCHASES AND SALES OF SECURITIES
For the period February 9, 1998 (commencement of operations) to June 30,
1998, purchases and sales of investment securities, other than short-term
securities, were $1,286,355 and $203,555, respectively.
(4) UNREALIZED APPRECIATION (DEPRECIATION) AND COST OF INVESTMENTS FOR FEDERAL
INCOME TAX PURPOSES
Aggregate gross unrealized appreciation for securities in which there is an
excess of value over tax cost is $105,586, aggregate gross unrealized
depreciation for securities in which there is an excess of tax cost over value
is $66,354, and net unrealized appreciation for Federal income tax purposes is
$39,232. Federal income tax cost basis of portfolio securities is $1,257,736 at
June 30, 1998.
<PAGE>
OCC ACCUMULATION TRUST
MID CAP PORTFOLIO
FINANCIAL HIGHLIGHTS (UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
FEBRUARY 9, 1998(1)
TO JUNE 30, 1998
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<S> <C>
Net asset value, beginning of period................................................................ $ 10.00
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Income from investment operations
Net investment income............................................................................... 0.03
Net realized and unrealized gain on investments..................................................... 0.49
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Total income from investment operations........................................................... 0.52
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Dividends and distributions to shareholders
Dividends to shareholders from net investment income................................................ --
Distributions to shareholders from net realized gains............................................... --
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Total dividends and distributions to shareholders................................................. --
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Net asset value, end of period...................................................................... $ 10.52
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Total return (2).................................................................................... 5.2%
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Net assets, end of period (000's)................................................................... $ 1,301
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Ratio of net operating expenses to average net assets (3,4,5,6)..................................... 1.05%
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Ratio of net investment income to average net assets (3,4,6)........................................ 0.78%
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Portfolio turnover rate............................................................................. 20%
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Average commission rate............................................................................. $0.0596
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(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 period February 9, 1998 (commencement of
operations) to June 30, 1998 were $1,083,060.
(5) 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 period noted above, the Adviser waived its fee and assumed a
portion of the Portfolio's operating expenses. If such waivers and
assumptions had not been in effect, the ratio of net operating expenses to
average net assets and the ratio of net investment income (loss) to average
net assets would have been 5.16% and (3.33%), annualized, respectively, for
the period February 9, 1998 (commencement of operations) to June 30, 1998.
<PAGE>
OCC ACCUMULATION TRUST
TWO WORLD FINANCIAL CENTER
NEW YORK, NY 10281
TRUSTEES AND PRINCIPAL OFFICERS
Joseph M. La Motta Trustee, President
Paul Y. Clinton Trustee
Thomas W. Courtney Trustee
Lacy B. Herrmann Trustee
George Loft Trustee
Bernard H. Garil Vice President
Gavin Albert Vice President and Portfolio Manager
Robert J. Bluestone Vice President
Pierre Daviron Vice President and Portfolio Manager
John C. Giusio, Jr. Vice President
Richard J. Glasebrook, II Vice President and Portfolio Manager
Louis Goldstein Vice President and Portfolio Manager
Alan Gutmann Vice President and Portfolio Manager
Benjamin D. Gutstein Vice President and Portfolio Manager
Vikki Hanges Vice President and Portfolio Manager
Timothy J. McCormack Vice President and Portfolio Manager
Eileen P. Rominger Vice President and Portfolio Manager
Sheldon M. Siegel Treasurer
Deborah Kaback Secretary
Richard L. Peteka Assistant Treasurer
INVESTMENT ADVISER
OpCap Advisors
Two World Financial Center
New York, NY 10281
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
P.O. Box 1978
Boston, MA 02105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
This report is authorized for distribution only
to shareholders and to others who have
received a copy of this Trust's prospectus.
