oppenheimer variable account funds 485(b) part 1 of 2

485BPOS 1 ovaf1.htm OPPENHEIMER VARIABLE ACCOUNT FUND PART 1 OF 2 oppenheimer variable account funds 485(b) part 1 of 2

Registration No. 2-93177
File No. 811-4108

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 53 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 49

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OPPENHEIMER VARIABLE ACCOUNT FUNDS
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(Exact Name of Registrant as Specified in Charter)

6803 South Tucson Way, Centennial, Colorado 80112-3924
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(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (303) 768-3200

Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008
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(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[X] on April 29, 2008 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on _______________ pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on _______________ pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

Oppenheimer
Balanced Fund/VA
A series of Oppenheimer Variable
Account Funds

Prospectus dated April 29, 2008

Oppenheimer Balanced Fund/VA is a mutual fund that seeks a high total
investment return, which includes current income and capital appreciation in the
value of its shares. The Fund allocates its investments among common stocks,
debt securities, and "money market" instruments. Shares of the Fund are sold
only as the underlying investment for variable life insurance policies, variable
annuity contracts and other insurance company separate accounts. A prospectus
for the insurance product you have selected accompanies this prospectus and
explains how to select shares of the Fund as an investment under that insurance
product, and whether you are eligible to purchase Service Shares of the Fund.

This prospectus contains important information about the Fund's objective,
its investment policies, strategies and risks. Please read this prospectus (and
your insurance product prospectus) carefully before you invest and keep them for
future reference about your account.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the Fund's securities nor has it determined that this
prospectus is accurate or complete. It is a criminal offense to represent
otherwise.

(OppenheimerFunds, Inc. logo)

Contents

About the Fund
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The Fund's Investment Objective and Principal Investment
Strategies

Main Risks of Investing in the Fund

The Fund's Past Performance

Fees and Expenses of the Fund

About the Fund's Investments

How the Fund is Managed

Investing in the Fund
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How to Buy and Sell Shares

Dividends, Capital Gains and Taxes

Financial Highlights

About the Fund

The Fund's Investment Objective and Principal Investment Strategies

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What Is the Fund's Investment Objective? The Fund seeks a high total
investment return, which includes current income and capital appreciation in
the value of its shares.
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What Does the Fund Mainly Invest In? The Fund's investment manager,
OppenheimerFunds, Inc. (the "Manager"), uses a variety of different types of
securities and investment strategies to seek the Fund's objective:
o equity securities, such as common stocks, preferred stocks and
securities convertible into common stock, of issuers in the U.S. and
foreign countries,

o debt securities, such as bonds and notes issued by domestic and foreign
companies (which can include lower-grade, high-yield securities),
securities issued or guaranteed by the U.S. Government and its
agencies and instrumentalities including mortgage-related securities
(these are referred to as "U.S. Government securities"), and debt
obligations of foreign governments, and
o money market instruments, which are debt obligations that have a
maturity of 13 months or less, including short-term U.S. Government
securities, corporate and bank debt obligations and commercial paper.

These investments are more fully explained in "About the Fund's
Investments," below.

|X| How Do the Portfolio Managers Decide What Securities to Buy or
Sell? In selecting securities for the Fund, the Fund's portfolio managers use
different investment styles to carry out an asset allocation strategy that
seeks broad diversification across asset classes. They normally maintain a
balanced mix of equity securities and debt securities (including money market
instruments), although the Fund is not required to weight the portfolio
holdings in a fixed proportion. Therefore, the portfolio's mix of equity
securities, debt securities and money market instruments will change over
time.

The debt securities in the portfolio normally include a mix of U.S.
Government securities, agency debentures, mortgage-backed securities,
corporate debt, and asset-backed securities to achieve a balance between
total return and current income. The relative amounts of those types of debt
securities in the portfolio will change over time, because those sectors of
the bond markets generally react differently to changing economic
environments.

The portfolio managers employ both "growth" and "value" styles in
selecting equity securities. They use fundamental analysis of a company's
financial statements and management structure, analysis of the company's
operations and product development, as well as the industry of which the
issuer is part. Value investing seeks issuers that are temporarily out of
favor or undervalued in the market by various measures, such as the stock's
price/earnings ratio. Growth investing seeks issuers that the Manager
believes have possibilities for increases in their stock prices because of
strong earnings growth compared to the market, the development of new
products or services or other favorable economic factors.

Who Is the Fund Designed For? The Fund's shares are available only as an
investment option under certain variable annuity contracts, variable life
insurance policies and investment plans offered through insurance company
separate accounts of participating insurance companies, for investors seeking
high total return from their investment over the long term, from a fund
employing a variety of investments and investment styles in a diversified
portfolio. Those investors should be willing to assume the risks of
short-term share price fluctuations that are typical for a fund with
significant investments in stocks and foreign securities. Since the Fund's
income level will fluctuate, it is not designed for investors needing an
assured level of current income. The Fund is not a complete investment
program.

Main Risks of Investing in the Fund

All investments carry risks to some degree. The Fund's investments are
subject to changes in their value from a number of factors, described below.
There is also the risk that the value of your investment could be eroded over
time by the effects of inflation and that poor security selection by the
Manager will cause the Fund to underperform other funds having similar
objectives.

However, changes in the overall market prices of securities and the
income they pay can occur at any time. The share price of the Fund may change
daily based on changes in market prices of securities and market conditions
and in response to other economic events.

|X| Risks of Investing in Stocks. Stocks fluctuate in price, and their
short-term volatility at times can be great. The value of the Fund's
portfolio therefore will be affected by changes in the stock markets. Market
risk will affect the Fund's net asset value per share, which will fluctuate
as the values of the Fund's portfolio securities change. A variety of
factors can affect the price of a particular stock, and the prices of
individual stocks do not all move in the same direction uniformly or at the
same time. Different stock markets may behave differently from each other.

Additionally, stocks of issuers in a particular industry may be
affected by changes in economic conditions that affect that industry more
than others, or by changes in government regulations, availability of basic
resources or supplies, or other events. Other factors can affect a particular
stock's price, such as poor earnings reports by the issuer, loss of major
customers, major litigation against the issuer, or changes in government
regulations affecting the issuer. The Fund can invest in securities of large
companies and also small and medium-size companies, which may have more
volatile stock prices than large companies.

|X| Risks of Foreign Investing. The Fund can buy securities issued by
companies or governments in any country, including developed and emerging or
underdeveloped countries. Although there are no limits on the amounts it can
invest in foreign securities, normally the Fund does not expect to invest
more than 35% of its total assets in foreign securities.

While foreign securities offer special investment opportunities, there
are also special risks that can reduce the Fund's share prices and returns.
The change in value of a foreign currency against the U.S. dollar will result
in a change in the U.S. dollar value of securities denominated in that
foreign currency. Currency rate changes can also affect the distributions the
Fund makes from the income it receives from foreign securities as foreign
currency values change against the U.S. dollar. Foreign investing can result
in higher transaction and operating costs for the Fund. Foreign issuers are
not subject to the same accounting and disclosure requirements that U.S.
companies are subject to. The value of foreign investments may be affected
by exchange control regulations, currency devaluation, expropriation or
nationalization of a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental economic or monetary policy in the U.S.
or abroad, or other political and economic factors. These risks could cause
the prices of foreign securities to fall and therefore could depress the
Fund's share prices.

Additionally, if the Fund invests a significant amount of its assets in
foreign securities, it may be exposed to "time-zone arbitrage" attempts by
investors seeking to take advantage of the differences in value of foreign
securities that might result from events that occur after the close of the
foreign securities market on which a foreign security is traded and before
the close of the New York Stock Exchange (the "NYSE") that day, when the
Fund's net asset value is calculated. If such time-zone arbitrage were
successful, it might dilute the interests of other shareholders. However, the
Fund's use of "fair value pricing" to adjust the closing market prices of
foreign securities under certain circumstances, to reflect what the Manager
and the Board believe to be their fair value, may help deter those activities.

|_| Special Risks of Emerging Markets. Securities of issuers in
emerging and developing markets may offer special investment opportunities,
but present risks not found in more mature markets. Those securities may be
more difficult to sell at an acceptable price and their prices may be more
volatile than securities of issuers in more developed markets. Settlements of
trades may be subject to greater delays so that the Fund might not receive
the proceeds of a sale of a security on a timely basis.

Emerging markets might have less developed trading markets and
exchanges. Emerging market countries may have less developed legal and
accounting systems and investments may be subject to greater risks of
government restrictions on withdrawing the sales proceeds of securities from
the country. Economies of developing countries may be more dependent on
relatively few industries that may be highly vulnerable to local and global
changes. Governments may be more unstable and present greater risks of
nationalization or restrictions on foreign ownership of stocks of local
companies. These investments may be substantially more volatile than
securities of issuers in the U.S. and other developed countries and may be
very speculative.

|_| Special Risks of Lower-Grade Securities. Because the Fund can
invest in securities below investment-grade to seek high income, the Fund's
credit risks are greater than those of funds that buy only investment-grade
bonds. Lower-grade debt securities (commonly called "junk bonds") may be
subject to greater market fluctuations and greater risks of loss of income
and principal than investment-grade debt securities. Securities that are (or
that have fallen) below investment grade are exposed to a greater risk that
the issuers of those securities might not meet their debt obligations. These
risks can reduce the Fund's share price and the income it earns.

To the extent that a fund invests significantly in high yield bonds or
small-cap equity securities, because those types of securities may be traded
infrequently, investors may seek to trade fund shares based on their
knowledge or understanding of the value of those types of securities (this is
sometimes referred to as "price arbitrage"). Such price arbitrage, if
otherwise successful, might interfere with the efficient management of a
fund's portfolio to a greater degree than would be the case for funds that
invest in more liquid securities, because the fund may have difficulty
selling those securities at advantageous times or prices to satisfy the
liquidity requirements created by large and/or frequent trading activity.
Successful price arbitrage activities might also dilute the value of fund
shares held by other shareholders.

|X| Interest Rate Risks. The values of debt securities, including U.S.
Government securities prior to maturity, are subject to change when
prevailing interest rates change. When interest rates fall, the values of
already-issued debt securities generally rise. When interest rates rise, the
values of already-issued debt securities generally fall and they may sell at
a discount from their face amount. The magnitude of these fluctuations will
often be greater for longer-term debt securities than shorter-term debt
securities. The Fund's share price can go up or down when interest rates
change because of the effect of the changes on the value of the Fund's
investments in debt securities.

|X| Prepayment Risk. Prepayment risk occurs when the mortgages
underlying a mortgage-related security are prepaid at a rate faster than
anticipated (usually when interest rates fall) and the issuer of a security
can prepay the principal prior to the security's maturity. Mortgage-related
securities that are subject to prepayment risk, including the collateralized
mortgage obligations ("CMOs") and other mortgage-related securities that the
Fund buys, generally offer less potential for gains when prevailing interest
rates decline, and have greater potential for loss than other debt securities
when interest rates rise.

The impact of prepayments on the price of a security may be difficult
to predict and may increase the volatility of the price. The Fund might have
to reinvest the proceeds of prepaid securities in new securities offering
lower yields. Additionally, the Fund can buy mortgage-related securities at
a premium. Accelerated prepayments on those securities could cause the Fund
to lose the portion of its principal investment represented by the premium
the Fund paid.

If interest rates rise rapidly, prepayments might occur at slower rates
than expected, which could have the effect of lengthening the expected
maturity of a short or medium-term security. That could cause its value to
fluctuate more widely in response to changes in interest rates. In turn, this
could cause the value of the Fund's shares to fluctuate more.

|X| There Are Special Risks in Using Derivative Investments. The Fund
can use derivatives to seek increased returns or to try to hedge investment
risks. In general terms, a derivative investment is an investment contract
whose value depends on (or is derived from) the value of an underlying asset,
interest rate or index. Options, futures, CMOs, credit derivatives and
structured notes are examples of derivatives the Fund can use.

If the issuer of the derivative does not pay the amount due, the Fund
can lose money on the investment. Also, the underlying security or investment
on which the derivative is based, and the derivative itself, might not
perform the way the Manager expected it to perform. If that happens, the
Fund's share price could decline or the Fund could get less income than
expected. The Fund has limits on the amount of particular types of
derivatives it can hold. However, using derivatives can cause the Fund to
lose money on its investment and/or increase the volatility of its share
price.

How Risky is the Fund Overall? The risks described above collectively form
the overall risk profile of the Fund, and can affect the value of the Fund's
investments, its investment performance and its price per share. Particular
investments and investment strategies also have risks. These risks mean that
you can lose money by investing in the Fund. When you redeem your shares,
they may be worth more or less than what you paid for them. There is no
assurance that the Fund will achieve its investment objective.

In the short term, domestic and foreign stock markets can be volatile,
and the price of the Fund's shares will go up and down in response to those
changes. The Fund's income-oriented investments may help cushion the Fund's
total return from changes in stock prices, but debt securities are subject to
credit and interest rate risks. The Fund may be less volatile than funds that
focus only on stock investments, but has more risks than funds that focus
solely on investment grade bonds.

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An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
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The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in
the Fund, by showing changes in the Fund's performance for Non-Service Shares
from year to year for the last ten calendar years and by showing how the
average annual total returns of the Fund's shares compare to those of
broad-based market indices. Because the Fund's Service Shares are subject to
a service fee, their performance is expected to be lower for any given
period. The Fund's past investment performance is not necessarily an
indication of how the Fund will perform in the future.

Annual Total Returns (as of December 31 each year)

[See appendix to prospectus for data in bar chart showing annual total
returns]

Charges imposed by the separate accounts that invest in the Fund are not
included in the calculations of return in this bar chart, and if those
charges were included, the returns would be less than those shown.

During the period shown in the bar chart, the highest return (not annualized)
for a calendar quarter was 12.53% (2nd Qtr `03) and the lowest return (not
annualized) for a calendar quarter was -10.96% (3rd Qtr `01).

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10 Years
Average Annual Total Returns for the (or life of
periods ended December 31, 2007 1 Year Class if

5 Years less)
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Oppenheimer Balanced Fund/VA Non-Service

Shares 3.79% 10.52% 6.72%
(inception date: 2/9/87)

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Oppenheimer Balanced Fund/VA Service

Shares 3.49% 10.24% 7.09%
(inception date: 5/1/02)

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S&P 500 Index 5.49% 12.82% 5.91%
7.57%*

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Lehman Bros. Aggregate Bond Index 6.97% 4.42% 5.97%
5.32%*

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* From 4/30/02.

The Fund's average annual total returns in the table measure the
performance of a hypothetical account without deducting charges imposed by the
separate accounts that invest in the Fund and assume that all dividends and
capital gains distributions have been reinvested in additional shares. The
Fund's performance is compared to the Standard & Poor's 500 Index, an
unmanaged index of U.S. equity securities that is a measure of the general
domestic stock market. The Fund also compares its performance to the Lehman
Brothers Aggregate Bond Index, an unmanaged index of U.S. corporate, government
and mortgage-backed securities that is a measure of the domestic bond market.
The indices performance includes reinvestment of income but does not reflect
transaction costs, fees or expenses. The Fund's investments vary from those in
the indices.

The Fund's total returns should not be expected to be the same as the returns
of other Oppenheimer funds, even if both funds have the same portfolio
managers and/or similar names.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and
expenses you may pay if you buy and hold shares of the Fund. The Fund pays a
variety of expenses directly for management of its assets, administration,
distribution of its shares and other services. Those expenses are subtracted
from the Fund's assets to calculate the Fund's net asset values per share.
All shareholders therefore pay those expenses indirectly. The numbers below
are based on the Fund's expenses during its fiscal year ended December 31,
2007.

Shareholder Fees. The Fund does not charge an initial sales charge to buy
shares or to reinvest dividends. There are no redemption fees and no
contingent deferred sales charges. Please refer to the accompanying
prospectus of the participating insurance company for information on initial
or contingent deferred sales charges, exchange fees or redemption fees for
that variable life insurance policy, variable annuity or other investment
product. Those charges and fees are not reflected in either of the tables
below.

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Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
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Non-Service Shares Service Shares
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Management Fees 0.72% 0.72%
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Distribution and Service None 0.25%
(12b-1) Fees
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Other Expenses 0.03% 0.03%

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Total Annual Operating Expenses 0.75% 1.00%

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Expenses may vary in future years. "Other Expenses" include transfer agent
fees, custodial fees, and accounting and legal expenses the Fund pays. The
Fund's transfer agent has voluntarily agreed to limit transfer and
shareholder servicing agent fees to 0.35% per fiscal year, for both classes.
That undertaking may be amended or withdrawn at any time. For the Fund's
fiscal year ended December 31, 2007, the transfer agent fees did not exceed
the expense limitation described above. The Fund also receives certain
credits from the Fund's custodian that, during the fiscal year, reduced its
custodial expenses for both classes less than 0.01% of average daily net
assets.

Effective September 1, 2007 the Manager has voluntarily agreed to waive a
portion of the advisory fee and/or reimburse certain expenses so that the
total expenses of the Fund will not exceed 0.92% of average annual net assets
for Service Shares and 0.67% of average annual net assets for Non-Service
Shares. After the waiver the "Management Fees" for the Non-Service Shares
and Service Shares were 0.70%, and the "Total Annual Operating Expenses" were
0.73% for the Non-Service Shares and 0.98% for the Service Shares. This
voluntary waiver and/or reimbursement may be withdrawn at any time.

EXAMPLE. The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in shares of the Fund for
the time periods indicated and reinvest your dividends and distributions. The
example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Separate account or contract
expenses are not included and if they were included, overall expenses would
be higher. Your actual costs may be higher or lower, because expenses will
vary over time. Based on these assumptions your expenses would be as follows,
whether or not you redeem your investment at the end of each period:

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1 Year 3 Years 5 Years 10 Years
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Non-Service Shares $77 $241 $418 $934
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Service Shares $103 $320 $555 $1,231

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About the Fund's Investments

The Fund's Principal Investment Policies and Risks. The allocation of the
Fund's portfolio among different types of investments will vary over time
based upon the Manager's evaluation of economic and market trends. At times
the Fund may focus more on investing for capital appreciation with less
emphasis on income. At other times, for example when stock markets are less
stable, the Fund may increase the relative emphasis of its portfolio in
income-seeking investments, such as bonds and money market instruments.

In seeking broad diversification of the Fund's portfolio over asset
classes, issuers and economies, the portfolio managers consider overall and
relative economic conditions in U.S. and foreign markets. They seek broad
diversification by investing in different countries to help moderate the
special risks of investing in foreign securities and lower-grade, high-yield
debt securities. The Fund's portfolio might not always include all of the
different types of investments described below. The Statement of Additional
Information contains more detailed information about the Fund's investment
policies and risks.

|X| Stock and Other Equity Investments. The Fund can invest in equity
securities of issuers that may be of small, medium or large size, to seek
capital growth. Equity securities include common stocks, preferred stocks and
securities convertible into common stock. Although some convertible
securities are a type of debt security, the Manager considers some of those
convertible securities to be "equity equivalents" because of the conversion
feature. In that case, their rating has less impact on the investment
decision than in the case of other debt securities. The Fund invests in
securities issued by domestic or foreign companies that the Manager believes
have appreciation potential or that are undervalued.

The Fund's equity investments may be exchange-traded or
over-the-counter securities. Over-the-counter securities may have less
liquidity than exchange-traded securities, and stocks of companies with
smaller capitalization have greater risk of volatility than stocks of larger
companies. The Fund limits its investments in securities of small, unseasoned
issuers to not more than 5% of its net assets.

|X| Debt Securities. The Fund can also invest in debt securities, such
as U.S. Government securities, foreign government securities, and foreign and
domestic corporate bonds, notes and debentures, for their income
possibilities.

The debt securities the Fund buys may be rated by nationally recognized
rating organizations or they may be unrated securities assigned a rating by
the Manager. The Fund's investments may be investment grade or below
investment grade in credit quality. The Manager does not rely solely on
ratings by rating organizations in selecting debt securities, but evaluates
business and economic factors affecting an issuer as well.

The Fund's foreign debt investments can be denominated in U.S. dollars
or in foreign currencies and can include "Brady Bonds." Those are U.S.
dollar-denominated debt securities collateralized by zero-coupon U.S.
Treasury securities. They are typically issued by governments of emerging
market countries and are considered speculative securities with higher risks
of default. The Fund will buy foreign currency only in connection with the
purchase and sale of foreign securities and not for speculation.

|X| U.S. Government Securities. The Fund can invest in securities
issued or guaranteed by the U.S. Treasury or other U.S. Government agencies
or federally-chartered corporate entities referred to as
"instrumentalities." These are referred to as "U.S. Government securities"
in this prospectus. They can include CMOs and other mortgage-related
securities. Mortgage-related securities are subject to additional risks of
unanticipated changes in the rate of payment of the underlying mortgages,
which can affect the income stream to the Fund from those securities as well
as their values.

|_| U.S. Treasury Obligations. These include Treasury bills (having
maturities of one year or less when issued), Treasury notes (having
maturities of from one to 10 years), and Treasury bonds (having maturities of
more than 10 years when issued). Treasury securities are backed by the full
faith and credit of the United States as to timely payments of interest and
repayment of principal. The Fund can buy U.S. Treasury securities that have
been "stripped" of their interest coupons by a Federal Reserve Bank,
zero-coupon U.S. Treasury securities described below, and Treasury
Inflation-Protection Securities ("TIPS"). Although not rated, Treasury
obligations have little credit risk but prior to their maturity are subject
to interest rate risk.

|_| Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and mortgage-related
securities that have different levels of credit support from the U.S.
Government. Some are supported by the full faith and credit of the U.S.
Government, such as Government National Mortgage Association pass-through
mortgage certificates (called "Ginnie Maes"). Some are supported by the
right of the issuer to borrow from the U.S. Treasury under certain
circumstances, such as Federal National Mortgage Association bonds ("Fannie
Maes"). Others are supported only by the credit of the entity that issued
them, such as Federal Home Loan Mortgage Corporation obligations ("Freddie
Macs"). These have relatively little credit risk.

|_| Mortgage-Related U.S. Government Securities. The Fund can buy
interests in pools of residential or commercial mortgages, in the form of
CMOs and other "pass-through" mortgage securities. CMOs that are U.S.
Government securities have collateral to secure payment of interest and
principal. They may be issued in different series each having different
interest rates and maturities. The collateral is either in the form of
mortgage pass-through certificates issued or guaranteed by a U.S. agency or
instrumentality or mortgage loans insured by a U.S. Government agency.

The prices and yields of CMOs are determined, in part, by assumptions
about the cash flows from the rate of payments of the underlying mortgages.
Changes in interest rates may cause the rate of expected prepayments of those
mortgages to change. In general, prepayments increase when general interest
rates fall and decrease when interest rates rise.

If prepayments of mortgages underlying a CMO occur faster than expected
when interest rates fall, the market value and yield of the CMO could be
reduced. Additionally, the Fund may have to reinvest the prepayment proceeds
in other securities paying interest at lower rates, which could reduce the
Fund's yield.

When interest rates rise rapidly and if prepayments occur more slowly
than expected, a short- or medium-term CMO can in effect become a long-term
security, subject to greater fluctuations in value. These prepayment risks
can make the prices of CMOs very volatile when interest rates change. The
prices of longer-term debt securities tend to fluctuate more than those of
shorter-term debt securities. That volatility will affect the Fund's share
price.

|X| Private-Issuer Mortgage-Backed Securities. The Fund can invest in
mortgage-backed securities issued by private issuers, which do not offer the
credit backing of U.S. Government securities. Primarily these would include
multi-class debt or pass-through certificates secured by mortgage loans. They
may be issued by banks, savings and loans, mortgage bankers and other
non-governmental issuers. Private issuer mortgage-backed securities are
subject to the credit risks of the issuers (as well as the interest rate
risks and prepayment risks of CMOs, discussed above), although in some cases
they may be supported by insurance or guarantees.

|X| High-Yield, Lower-Grade Debt Securities. The Fund can invest
without limit in lower-grade, high-yield debt securities, including bonds,
debentures, notes, preferred stocks, loan participation interests, structured
notes and, asset-backed securities, among others, to seek current income.
These securities are sometimes called "junk bonds." The Fund has no
requirements as to the maturity of the debt securities it can buy, or as to
the market capitalization range of the issuers of those securities.

Lower-grade debt securities are those rated below "Baa" by Moody's
Investors Service, Inc. or lower than "BBB" by Standard & Poor's Rating
Service or that have similar ratings by other nationally-recognized rating
organizations. The Fund can invest in securities rated as low as "C" or "D"
or which are in default at the time the Fund buys them. While securities
rated "Baa" by Moody's or "BBB" by S&P are considered "investment grade,"
they have some speculative characteristics.

While investment-grade securities are subject to risks of non-payment
of interest and principal, in general high-yield, lower-grade bonds, whether
rated or unrated, have greater risks than investment-grade securities. There
may be less of a market for them and therefore they may
be harder to sell at an acceptable price. The special risks these securities
are subject to mean that the Fund may not achieve the expected income from
them and that the Fund's net asset value per share may be affected by
declines in value of these securities.

|X| Asset-Backed Securities. The Fund can buy asset-backed securities,
which are fractional interests in pools of loans collateralized by loans or
other assets or receivables. They are typically issued by trusts and special
purpose corporations that pass the income from the underlying pool to the
buyer of the interest. These securities are subject to prepayment risks and
the risk of default by the issuer as well as by the borrowers of the
underlying loans in the pool.

|X| Money Market Instruments. The Fund can invest in money market
instruments, which include short-term certificates of deposit, bankers'
acceptances, commercial paper (including variable amount master demand
notes), U.S. Government obligations, and other debt instruments (including
bonds) issued by corporations. These securities may have variable or
floating interest rates. The Fund's investments in commercial paper in
general will be limited to paper in the top two rating categories of Standard
& Poor's, Moody's or other national rating organizations.

|X| Derivative Investments. The Fund can invest in a number of
different kinds of "derivative" investments. In the broadest sense,
exchange-traded options, futures contracts, mortgage-related securities and
other hedging instruments the Fund can use may be considered "derivative
investments." In addition to using hedging instruments, the Fund may use
other derivative investments because they offer the potential for increased
income and principal value.

Markets underlying securities and indices may move in a direction not
anticipated by the Manager. Interest rate and stock market changes in the
U.S. and abroad may also influence the performance of derivatives. As a
result of these risks the Fund could realize less principal or income from
the investment than expected. Certain derivative investments held by the
Fund may be illiquid.

|X| Credit Default Swaps. The Fund may enter into credit default
swaps. A credit default swap enables an investor to buy or sell protection
against a credit event, such as an issuer's failure to make timely payments
of interest or principal, bankruptcy or restructuring. The terms of the
instrument are generally negotiated by the Fund and the swap counterparty.

If the Fund buys credit protection using a credit default swap, the
Fund will make fixed payments to the counterparty. If a credit event occurs,
the Fund will deliver the defaulted bonds underlying the swap and the swap
counterparty will pay the par amount of the bonds. If the Fund sells credit
protection using a credit default swap, the Fund will receive fixed payments
from the counterparty. If a credit event occurs, the Fund will pay the par
amount of the defaulted bonds underlying the swap and the swap counterparty
will deliver the bonds. If the swap is on a basket of securities, the
notional amount of the swap is reduced by the par amount of the defaulted
bonds, and the fixed payments are then made on the reduced notional amount.

Credit default swaps are subject to counterparty credit risk (if the
counterparty fails to meet its obligations). They are subject to the risk
that the Fund will not properly assess the cost of the instrument. If the
Fund is selling credit protection, there is a risk that a credit event will
occur and that the Fund will have to pay par value on defaulted bonds. If
the Fund is buying credit protection, there is a risk that no credit event
will occur and the Fund will receive no benefit for the premium paid.

|X| Hedging. The Fund can buy and sell certain futures contracts, put
and call options, including options on futures and broadly-based securities
indices, and forward contracts. These investments are referred to as "hedging
instruments." The Fund has limits on its use of hedging instruments and is
not required to use hedging instruments to seek its objective. The Fund does
not use hedging instruments for speculative purposes.

The Fund can buy and sell options, futures and forward contracts for a
number of purposes. It might do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or to
establish a position in the securities market as a temporary substitute for
purchasing individual securities. Forward contracts can be used to try to
manage foreign currency risks on the Fund's foreign investments.

There are special risks in particular hedging strategies. For example,
options trading involves the payment of premiums and can increase portfolio
turnover. If an investment that is subject to a covered call written by the
Fund increases in value above the call price, the Fund may be required to
sell the investment at the call price and may not be able to realize any gain
above that price. In writing a put, there is a risk that the Fund may be
required to buy the underlying security at a disadvantageous price. If the
Manager uses a hedging instrument at the wrong time or judges market
conditions incorrectly, the hedge might fail and the strategy could reduce
the Fund's return. The Fund could also experience losses if the prices of its
futures and options positions were not correlated with its other investments
or if it could not close out a position because of an illiquid market.

|X| Foreign Investing. The Fund typically invests a portion of its
assets in foreign debt securities. The Fund can buy debt securities issued by
foreign governments or companies. The Fund can buy securities of governments
and companies in under-developed and developed markets. However, the Fund
may not invest more than 10% of its net assets in the securities of
governments and companies in emerging markets. Debt securities issued or
guaranteed by a foreign government or its agencies might not be backed by the
"full faith and credit" of the government.

The Fund's foreign debt investments can be denominated in U.S. dollars
or in foreign currencies. However, the Fund may not invest more than 20% of
its net assets in foreign debt securities. The Fund will buy and sell
foreign currency only in connection with the purchase and sale of foreign
securities and not for speculation.

Special Portfolio Diversification Requirements. To enable a variable annuity
or variable life insurance contract based on an insurance company separate
account to qualify for favorable tax treatment under the Internal Revenue
Code, the underlying investments must follow special diversification
requirements that limit the percentage of assets that can be invested in
securities of particular issuers. The Fund's investment program is managed to
meet those requirements, in addition to other diversification requirements
under the Internal Revenue Code and the Investment Company Act that apply to
publicly-sold mutual funds.

Failure by the Fund to meet those special requirements could cause
earnings on a contract owner's interest in an insurance company separate
account to be taxable income. Those diversification requirements might also
limit, to some degree, the Fund's investment decisions in a way that could
reduce its performance.

Can the Fund's Investment Objective and Policies Change? The Fund's Board of
Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to
this prospectus. Fundamental policies cannot be changed without the approval
of a majority of the Fund's outstanding voting shares. The Fund's objective
is a fundamental policy. Investment restrictions that are fundamental
policies are listed in the Statement of Additional Information. An investment
policy is not fundamental unless this prospectus or the Statement of
Additional Information says that it is.

Other Investment Strategies. To seek its objective, the Fund can also use the
investment techniques and strategies described below. The Fund might not
always use all of them. These techniques have risks, although some of them
are designed to help reduce overall investment or market risks.

|X| Forward Rolls. The Fund can enter into "forward roll" transactions
with respect to mortgage-related securities. In this type of transaction, the
Fund sells a mortgage-related security to a buyer and simultaneously agrees
to repurchase a similar security at a later date at a set price.

During the period between the sale and the repurchase, the Fund will
not be entitled to receive interest and principal payments on the securities
that have been sold. It is possible that the market value of the securities
the Fund sells may decline below the price at which the Fund is obligated to
repurchase securities, or that the counterparty might default in its
obligation.

|X| Bank Loan Participation Agreements. The Fund can invest in bank
loan participation agreements. They provide the Fund an undivided interest in
a loan made by the issuing bank in the proportion the Fund's interest bears
to the total principal amount of the loan. In evaluating the risk of these
investments, the Manager looks to the creditworthiness of the borrower that
is obligated to make principal and interest payments on the loan. Not more
than 5% of the Fund's net assets can be invested in participation interests
of any one borrower.

|X| Repurchase Agreements. The Fund can enter into repurchase
agreements. In a repurchase transaction, the Fund buys a security and
simultaneously sells it to the vendor for delivery at a future date.
Repurchase agreements must be fully collateralized. However, if the vendor
fails to pay the resale price on the delivery date, the Fund could incur
costs in disposing of the collateral and might experience losses if there is
any delay in its ability to do so. There is no limit on the amount of the
Fund's net assets that may be subject to repurchase agreements of seven days
or less.

|X| Zero-Coupon and "Stripped" Securities. Some of the U.S. Government
and private company debt securities the Fund buys are zero-coupon bonds that
pay no interest. They are issued at a substantial discount from their face
value. "Stripped" securities are the separate income or principal components
of a debt security. Some CMOs or other mortgage-related securities may be
stripped, with each component having a different proportion of principal or
interest payments. One class might receive all the interest and the other all
the principal payments.

The values of interest-only mortgage related securities are also very
sensitive to prepayments of underlying mortgages. Principal-only securities
are also sensitive to changes in interest rates. When prepayments tend to
fall, the timing of the cash flows to these securities increases, making them
more sensitive to changes in interest rates. The market for some of these
securities may be limited, making it difficult for the Fund to dispose of its
holdings at an acceptable price.

|X| Illiquid and Restricted Securities. Investments may be illiquid
because they do not have an active trading market, making it difficult to
value them or dispose of them promptly at an acceptable price. Restricted
securities may have terms that limit their resale to other investors or may
require registration under applicable securities laws before they may be sold
publicly. The Fund will not invest more than 15% of its net assets in
illiquid or restricted securities but is not required to sell them due to
declines in the Fund's share price. Certain restricted securities that are
eligible for resale to qualified institutional purchasers may not be subject
to that limit. The Manager monitors holdings of illiquid securities on an
ongoing basis to determine whether to sell any holdings to maintain adequate
liquidity.

|X| "Structured" Notes. The Fund can buy "structured" notes, which are
specially-designed derivative debt investments whose payments of principal or
interest are linked to the value of an index (such as a currency or
securities index) or commodity, including financial commodities. The terms of
the instrument may be "structured" by the purchaser (the Fund) and the
borrower issuing the note.

The principal and/or interest payments depend on the performance of one
or more other securities or indices, and the values of these notes will
therefore fall or rise in response to the changes in the values of the
underlying security or index. They are subject to both credit and interest
rate risks and therefore the Fund could receive more or less than it
originally invested when the notes mature, or it might receive less interest
than the stated coupon payment if the underlying investment or index does not
perform as anticipated. Their values may be very volatile and they may have a
limited trading market, making it difficult for the Fund to sell its
investment at an acceptable price.

|X| Short-Term Debt Securities. The Fund can buy high-quality,
short-term money market instruments, including obligations of the U.S.
Government and its agencies, short-term corporate debt obligations, bank
certificates of deposit and bankers' acceptances, and commercial paper, which
are short-term, negotiable promissory notes of companies.

|X| Loans of Portfolio Securities. The Fund may make loans of its
portfolio securities, with a value not to exceed 25% of its net assets, in
accordance with policies approved by the Fund's Board. The Fund has entered
into a securities lending agreement with JPMorgan Chase Bank, N.A. ("JPMorgan
Chase") for that purpose. Under the agreement, the Fund's portfolio
securities may be loaned to brokers, dealers and financial institutions,
provided that such loans comply with the collateralization and other
requirements of the securities lending agreement, the Fund's policies and
applicable government regulations. JPMorgan Chase has agreed, in general, to
bear the risk that a borrower may default on its obligation to return loaned
securities. However, the Fund will be responsible for risks associated with
the investment of cash collateral, including the risk of a default by the
issuer of a security in which cash collateral has been invested. If that
occurs, the Fund may incur additional costs in seeking to obtain the
collateral or may lose the amount of the collateral investment. The Fund may
also lose money if the value of the investments purchased with cash
collateral decreases.

|X| Investments in Oppenheimer Institutional Money Market Fund. The
Fund can invest its free cash balances in Class E shares of Oppenheimer
Institutional Money Market Fund, to provide liquidity or for defensive
purposes. The Fund invests in Oppenheimer Institutional Money Market Fund
rather than purchasing individual short-term investments to try to seek a
higher yield than it could obtain on its own. Oppenheimer Institutional Money
Market Fund is a registered open-end management investment company, regulated
as a money market fund under the Investment Company Act of 1940, as amended
and is part of the Oppenheimer Family of Funds. It invests in a variety of
short-term, high-quality, dollar-denominated money market instruments issued
by the U.S. Government, domestic and foreign corporations, other financial
institutions, and other entities. Those investments may have a higher rate of
return than the investments that would be available to the Fund directly. At
the time of an investment, the Manager cannot always predict what the yield
of the Oppenheimer Institutional Money Market Fund will be because of the
wide variety of instruments that fund holds in its portfolio. The return on
those investments may, in some cases, be lower than the return that would
have been derived from other types of investments that would provide
liquidity. As a shareholder, the Fund will be subject to its proportional
share of the expenses of Oppenheimer Institutional Money Market Fund's Class
E shares, including its advisory fee. However, the Manager will waive a
portion of the Fund's advisory fee to the extent of the Fund's share of the
advisory fee paid to the Manager by Oppenheimer Institutional Money Market
Fund.

|X| Temporary Defensive and Interim Investments. For temporary
defensive purposes in times of adverse or unstable market, economic or
political conditions, the Fund can invest up to 100% of its assets in
investments that may be inconsistent with the Fund's principal investment
strategies. Generally the Fund would invest in shares of Oppenheimer
Institutional Money Market Fund or in the types of money market instruments
described above or in other short-term U.S. Government securities. The Fund
might also hold these types of securities as interim investments pending the
investment of proceeds from the sale of Fund shares or the sale of Fund
portfolio securities or to meet anticipated redemptions of Fund shares. To
the extent the Fund invests in these securities, it might not achieve its
investment objective.

|X| Portfolio Turnover. The Fund may engage in active and frequent
trading to try to achieve its objective. It might have a turnover rate in
excess of 100% annually. Increased portfolio turnover creates higher
brokerage and transaction costs for the Fund (and may reduce performance).
For a contract owner, any increase in realized gains will generally not be
taxable directly but may affect the owner's tax basis in the account. The
Financial Highlights table at the end of this prospectus shows the Fund's
portfolio turnover rates during prior fiscal years.

PORTFOLIO HOLDINGS. The Fund's portfolio holdings are included in semi-annual
and annual reports that are distributed to shareholders of the Fund within 60
days after the close of the period for which such report is being made. The
Fund also discloses its portfolio holdings in its Statements of Investments
on Form N-Q, which are filed with the Securities and Exchange Commission no
later than 60 days after the close of its first and third fiscal quarters.
These required filings are publicly available at the Securities and Exchange
Commission. Therefore, portfolio holdings of the Fund are made publicly
available no later than 60 days after the close of each of the Fund's fiscal
quarters.

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information.

How the Fund Is Managed

The Manager. The Manager chooses the Fund's investments and handles its
day-to-day business. The Manager carries out its duties, subject to the
policies established by the Fund's Board of Trustees, under an investment
advisory agreement that states the Manager's responsibilities. The agreement
sets the fees the Fund pays to the Manager and describes the expenses that
the Fund is responsible to pay to conduct its business.

The Manager has been an investment adviser since 1960. The Manager and
its subsidiaries and controlled affiliates managed more than $240 billion in
assets as of March 31, 2008, including other Oppenheimer funds with more than
6 million shareholder accounts. The Manager is located at Two World Financial
Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008.

A discussion regarding the basis for the Board of Trustees' approval of
the Fund's investment advisory contract is available in the Fund's Annual
Report to shareholders for the year ended December 31, 2007.

|X| Portfolio Managers. The equity component of the Fund's portfolio
is managed by Emmanuel Ferreira, and the fixed income component of the Fund's
portfolio is managed by Angelo Manioudakis, together with a team of
investment professionals including Benjamin J. Gord, Geoffrey Caan, Thomas
Swaney and Antulio N. Bomfim.

Mr. Ferreira is the portfolio manager of the equity component of the
Fund's portfolio. He has been a Vice President and portfolio manager of the
Fund, and Vice President of the Manager since January 2003. He is a portfolio
manager and officer of other portfolios in the OppenheimerFunds complex. He
was formerly Portfolio Manager at Lashire Investments from July 1999 through
December 2002. Mr. Ferreira is primarily responsible for the day-to-day
management of the equity component of the Fund's portfolio.

The Fund's fixed-income component is managed by a portfolio management
team comprised of Angelo Manioudakis, Benjamin Gord, Geoffrey Caan, Thomas
Swaney and Antulio N. Bomfim. This portfolio management team is primarily
responsible for the day-to-day management of the fixed-income component of
the Fund's portfolio.

Mr. Manioudakis has been a Vice President and portfolio manager of the Fund
since January 2003, and a Senior Vice President of the Manager and of
HarbourView Asset Management Corporation since April 2002. He has been a Senior
Vice President of OFI Institutional Asset Management, Inc. since June 2002 and
Vice President of Oppenheimer Real Asset Management, Inc. since November 2006.
He is also a portfolio manager and officer of other portfolios in the
OppenheimerFunds complex. Mr. Manioudakis was Executive Director and portfolio
manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley
Investment Management from August 1993 through April 2002.

Mr. Gord has been a Vice President and portfolio manager of the Fund
since February 2006 and a Vice President of the Manager since April 2002. He
is also a portfolio manager of other portfolios in the OppenheimerFunds
complex. Mr. Gord was an Executive Director and a senior fixed income
analyst at Miller, Anderson & Sherrerd from April 1992 through March 2002.

Mr. Caan has been a Vice President and portfolio manager of the Fund
since February 2006 and a Vice President of the Manager since August 2003. He
is also a portfolio manager of other portfolios in the OppenheimerFunds
complex. Mr. Caan was a Vice President of ABN AMRO N.A., Inc. from June 2002
through August 2003, and a Vice President of Zurich Scudder Investments from
January 1999 through June 2002.

Mr. Swaney has been a Vice President and portfolio manager of the Fund
and a Vice President of the Manager since April 2006. He is also a portfolio
manager of other portfolios in the OppenheimerFunds complex. Mr. Swaney was
a senior analyst of the Manager's High Grade Investment Team from June 2002
to March 2006. Prior to joining the Manager in June 2002, Mr. Swaney was a
senior fixed income analyst at Miller, Anderson & Sherrerd, a division of
Morgan Stanley Investment Management, from May 1998 through May 2002.

Mr. Bomfim has been a Vice President and portfolio manager of the Fund
since February 2006 and a Vice President of the Manager since October 2003.
He is also a portfolio manager of other portfolios in the OppenheimerFunds
complex. Mr. Bomfim was a Senior Economist at the Board of Governors of the
Federal Reserve System from June 1992 to October 2003.

The Statement of Additional Information provides additional information
about the Portfolio Managers' compensation, other accounts they manage and
their ownership of Fund shares.

|X| Possible Conflicts of Interest. The investment activities of the
Manager and its affiliates in regard to other accounts they manage may
present conflicts of interest that could disadvantage the Fund and its
shareholders. The Manager or its affiliates may provide investment advisory
services to other funds and accounts that have investment objectives or
strategies that differ from, or are contrary to, those of the Fund. That may
result in another such fund or account holding investment positions that are
adverse to the Fund's investment strategies or activities. For example, the
Fund may take a long position in a security at the same time that another
fund or account advised by the Manager takes a short position in the same
security.

Other funds or accounts advised by the Manager or its affiliates may
have conflicting interests arising from investment objectives that are
similar to those of the Fund. Those funds and accounts may engage in, and
compete for, transactions in the same types of securities or other
investments as the Fund. At other times, there may be conflicts of interest
with other funds or accounts that invest in one of the same issuers that the
Fund invests in. For example, the Fund may invest in an issuer's equity or
debt securities that are subordinate to other securities of that issuer held
by another fund or account the Manager advises.

The Manager and its affiliates are not obligated to make available to
the Fund's investment personnel any information regarding the strategies or
investment activities of other funds or accounts that the Manager and its
affiliates advise. The trading and other investment activities of those other
funds or accounts are carried out without regard to the investment activities
of the Fund and, as a result, the value of securities held by the Fund or the
Fund's investment strategies may be adversely affected. The Fund's investment
performance will usually differ from the performance of other accounts
advised by the Manager or its affiliates and the Fund may experience losses
during periods in which other accounts advised by the Manager or its
affiliates achieve significant gains.

The Fund offers its shares to separate accounts of different insurance
companies, as an investment for their variable annuity, variable life and
other investment product contracts. While the Fund does not foresee any
disadvantages to contract owners from these arrangements, it is possible that
the interests of owners of different contracts participating in the Fund
through different separate accounts might conflict. For example, a conflict
could arise because of differences in tax treatment.

The Fund's Board of Trustees has procedures to monitor the portfolio
for possible conflicts to determine what action should be taken. Such
policies and procedures may also limit the Fund's investment activities and
affect its performance. If a conflict occurs, the Board might require one or
more participating insurance company separate accounts to withdraw their
investments in the Fund. That could force the Fund to sell securities at
disadvantageous prices, and orderly portfolio management could be disrupted.
Also, the Board might refuse to sell shares of the Fund to a particular
separate account, or could terminate the offering of the Fund's shares if
required to do so by law or if it would be in the best interests of the
shareholders of the Fund to do so.

INVESTING IN THE FUND

How to Buy and Sell Shares

How Are Shares Purchased? Shares of the Fund may be purchased only by
separate investment accounts of participating insurance companies as an
underlying investment for variable life insurance policies, variable annuity
contracts or other investment products. Individual investors cannot buy
shares of the Fund directly. Please refer to the accompanying prospectus of
the participating insurance company for information on how to select the Fund
as an investment option for that variable life insurance policy, variable
annuity or other investment product. That prospectus will indicate whether
you are eligible to purchase Service Shares of the Fund. The Fund reserves
the right to refuse any purchase order when the Manager believes it would be
in the Fund's best interests to do so.

ARE THERE LIMITATIONS ON FREQUENT PURCHASES AND REDEMPTIONS?

Risks from Excessive Purchase and Redemption Activity. Frequent purchases and
redemptions of Fund shares may interfere with the Manager's ability to manage
the Fund's investments, may increase the Fund's transaction and
administrative costs and/or may affect the Fund's performance. For example,
if large dollar amounts were involved in redemption transactions, the Fund
might be required to sell portfolio securities at unfavorable times to meet
such redemption requests, and the Fund's transaction or administrative
expenses might be increased. The extent to which the Fund might be affected
by such trading activity would depend on various factors, such as the current
asset size of the Fund, the nature of its investments, the amount of Fund
assets the portfolio managers maintain in cash or cash equivalents, and the
aggregate dollar amount, number and frequency of the share trades.

Policies on Disruptive Activity. The Manager and the Fund's Board of Trustees
have adopted the following policies and procedures to try to prevent frequent
and/or excessive purchase and redemption activity.

The Transfer Agent and the Distributor, on behalf of the Fund, have
entered into agreements with participating insurance companies designed to
detect and restrict excessive short term trading activity by contract or
policy owners or their financial advisers in their accounts. The Transfer
Agent generally does not consider periodic asset allocation or re-balancing
that affects a portion of the Fund shares held in the account of a policy or
contract owner to be "excessive trading." However, the Transfer Agent has
advised participating insurance companies that it generally considers certain
other types of trading activity to be "excessive," such as making a
"transfer" out of the Fund within 30 days of buying Fund shares (by the sale
of the recently purchased Fund shares and the purchase of shares of another
fund) or making more than six "round trip transfers" between funds during one
year. The agreements require participating insurance companies to provide
transaction information to the Fund and to execute Fund instructions to
restrict trading in Fund shares.

A participating insurance company may also have its own policies and
procedures and may impose its own restrictions or limitations to discourage
short-term and/or excessive trading by its policy or contract owners. Those
policies and procedures may be different from the Fund's in certain respects.
You should refer to the prospectus for your insurance company variable
annuity contract for specific information about the insurance company's
policies. To the extent that the Fund has agreed to utilize an insurance
company's short-term or excessive trading restrictions, policy or contract
owners may be required to only transmit purchase or redemption orders by
first class U.S. mail.

Monitoring the Policies. The Fund's policies and procedures for detecting and
deterring frequent or excessive trading are administered by the Fund's
transfer agent. However, the Transfer Agent presently does not have the
ability to directly monitor trading activity in the accounts of policy or
contract owners within the participating insurance companies' accounts. The
Transfer Agent's ability to monitor and deter excessive short-term trading in
such insurance company accounts ultimately depends on the capability and
diligence of each participating insurance company, under their agreements
with the Transfer Agent, the Distributor and the Fund, in monitoring and
controlling the trading activity of the policy or contract owners in the
insurance company's accounts.

The Transfer Agent will attempt to monitor the net effect on the Fund's
assets from the purchase and redemption activity in the accounts of
participating insurance companies and will seek to identify patterns that may
suggest excessive trading by the contract or policy owners who invest in the
insurance company's accounts. If the Transfer Agent believes it has observed
evidence of possible excessive trading activity, it will ask the
participating insurance companies or other registered owners to provide
information about the transaction activity of the contract or policy holders
in their respective accounts, and to take appropriate action. In that case,
the insurance company must confirm to the Transfer Agent that appropriate
action has been taken to curtail the excessive trading activity.

The Transfer Agent will, subject to the limitations described in this
section, limit or terminate the trading activity of any person, group or
account that it believes would be excessive or disruptive. However, the
Transfer Agent may not be able to detect or curtail all such trading activity
in the Fund. The Transfer Agent will evaluate trading activity on a case by
case basis and the limitations placed on trading may vary between accounts.

There is no guarantee that the policies and procedures described above
will be effective to enable the Fund's Transfer Agent to identify and deter
excessive short-term trading, and if the Transfer Agent is not able to detect
and curtail such activity, frequent trading could occur in the Fund.

Right to Refuse Purchase Orders. The Distributor and/or the Transfer Agent
may refuse any purchase order in their discretion and are not obligated to
provide notice before rejecting an order.

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Information about your investment in the Fund through your variable annuity
contract, variable life insurance policy or other plan can be obtained only
from your participating insurance company or its servicing agent. The Fund's
Transfer Agent does not hold or have access to those records. Instructions
for buying or selling shares of the Fund can only be given to your insurance
company or its servicing agent, not directly to the Fund or its Transfer
Agent.

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At What Price Are Shares Sold? Shares are sold to participating insurance
companies at their offering price, which is the net asset value per share.
The Fund does not impose any sales charge on purchases of its shares. If
there are any charges imposed under the variable annuity, variable life or
other contract through which Fund shares are purchased, they are described in
the accompanying prospectus of the participating insurance company.

Net Asset Value. The Fund calculates the net asset value of each class of
shares as of the close of the NYSE, on each day the NYSE is open for trading
(referred to in this prospectus as a "regular business day"). The NYSE
normally closes at 4:00 p.m., Eastern time, but may close earlier on some
days. All references to time in this prospectus mean "Eastern time."

The net asset value per share for a class of shares on a "regular
business day" is determined by dividing the value of the Fund's net assets
attributable to that class by the number of shares of that class outstanding
on that day. To determine net asset values, the Fund assets are valued
primarily on the basis of current market quotations. If market quotations are
not readily available or do not accurately reflect fair value for a security
(in the Manager's judgment) or if a security's value has been materially
affected by events occurring after the close of the market on which the
security is principally traded, that security may be valued by another method
that the Board of Trustees believes accurately reflects the fair value.
Because some foreign securities trade in markets and on exchanges that
operate on weekends and U.S. holidays, the values of some of the Fund's
foreign investments may change on days when investors cannot buy or redeem
Fund shares.

The Board has adopted valuation procedures for the Fund and has delegated the
day-to-day responsibility for fair value determinations to the Manager's
Valuation Committee. Fair value determinations by the Manager are subject to
review, approval and ratification by the Board at its next scheduled meeting
after the fair valuations are determined. In determining whether current
market prices are readily available and reliable, the Manager monitors the
information it receives in the ordinary course of its investment management
responsibilities for significant events that it believes in good faith will
affect the market prices of the securities of issuers held by the Fund. Those
may include events affecting specific issuers (for example, a halt in trading
of the securities of an issuer on an exchange during the trading day) or
events affecting securities markets (for example, a foreign securities market
closes early because of a natural disaster). The Fund uses fair value pricing
procedures to reflect what the Manager and the Board believe to be more
accurate values for the Fund's portfolio securities, although it may not
always be able to accurately determine such values. There can be no assurance
that the Fund could obtain the fair value assigned to a security if it were
to sell the security at the same time at which the Fund determines its net
asset value per share. In addition, the discussion of "time-zone arbitrage"
describes effects that the Fund's fair value pricing policy is intended to
counteract.

If, after the close of the principal market on which a security held by
the Fund is traded and before the time as of which the Fund's net asset
values are calculated that day, an event occurs that the Manager learns of
and believes in the exercise of its judgment will cause a material change in
the value of that security from the closing price of the security on the
principal market on which it is traded, the Manager will use its best
judgment to determine a fair value for that security.

The Manager believes that foreign securities values may be affected by
volatility that occurs in U.S. markets on a trading day after the close of
foreign securities markets. The Manager's fair valuation procedures therefore
include a procedure whereby foreign securities prices may be "fair valued" to
take those factors into account.

The offering price that applies to an order from a participating
insurance company is based on the next calculation of the net asset value per
share that is made after the insurance company (as the Fund's designated
agent to receive purchase orders) receives a purchase order from its contract
owners to purchase Fund shares on a regular business day, provided that the
Fund receives the order from the insurance company, generally by 9:30 a.m.
Eastern time on the next regular business day at the offices of its Transfer
Agent in Colorado.

|X| Classes of Shares. The Fund currently offers two classes of shares. The
class of shares designated as Service Shares is subject to a Distribution and
Service Plan. The impact of the expenses of the Plan on Service Shares is
described below. The class of shares that is not subject to a Plan has no
class "name" designation, but is referred to herein as "Non-Service" Shares.
The different classes of shares represent investments in the same portfolio
of securities but are expected to be subject to different expenses and will
likely have different share prices.

Distribution and Service Plan for Service Shares. The Fund has adopted a
Distribution and Service Plan for Service Shares to pay the Distributor for
distribution related services, personal services and account maintenance for
the Fund's Service Shares. Under the Plan, payments are made quarterly at an
annual rate of up to 0.25% of the average annual net assets of Service Shares
of the Fund. Because these fees are paid out of the Fund's assets on an
on-going basis, over time these fees will increase the cost of your
investment and may cost you more than other types of fees or sales charges.
The Distributor currently uses all of those fees to compensate sponsor(s) of
the insurance products that offer Fund shares, for providing personal service
and maintenance of accounts of their variable contract owners that hold
Service Shares.

OTHER PAYMENTS TO FINANCIAL INTERMEDIARIES AND SERVICE PROVIDERS. The Manager
and the Distributor, in their discretion, also may pay dealers or other
financial intermediaries and service providers for distribution and/or
shareholder servicing activities. These payments are made out of the
Manager's and/or the Distributor's own resources, including from the profits
derived from the advisory fees the Manager receives from the Fund. These cash
payments, which may be substantial, are paid to many firms having business
relationships with the Manager and Distributor. These payments are in
addition to any distribution fees, servicing fees, or transfer agency fees
paid directly or indirectly by the Fund to these financial intermediaries.
These payments by the Manager or Distributor from their own resources are not
reflected in the tables in the section called "Fees and Expenses of the Fund"
in this prospectus because they are not paid by the Fund.

"Financial intermediaries" are firms that offer and sell Fund shares to
their clients, or provide shareholder services to the Fund, or both, and
receive compensation for doing so. Your securities dealer or insurance agent,
for example, is a financial intermediary, and there are other types of
financial intermediaries that could receive payments relating to the sale or
servicing of the Fund's shares. In addition to dealers and insurance agents,
the financial intermediaries that may receive payments include the insurance
companies that offer variable annuity or variable life insurance products.

In general, these payments to financial intermediaries can be
categorized as "distribution-related" or "servicing" payments. Payments for
distribution-related expenses, such as marketing or promotional expenses, are
often referred to as "revenue sharing." Revenue sharing payments may be made
on the basis of the sales of shares attributable to that financial
intermediary, the average net assets of the Fund and other Oppenheimer funds
attributable to the accounts of that financial intermediary and its clients,
negotiated lump sum payments for distribution services provided, or sales
support fees. In some circumstances, revenue sharing payments may create an
incentive for a dealer or other financial intermediary or their
representatives to recommend or offer shares of the Fund or other Oppenheimer
funds to their customers. These payments also may give an intermediary an
incentive to cooperate with the Distributor's marketing efforts. A revenue
sharing payment may, for example, qualify the Fund for preferred status with
the intermediary receiving the payment or provide representatives of the
Distributor with access to representatives of the intermediary's sales force,
in some cases on a preferential basis over funds of competitors.
Additionally, as firm support, the Manager or Distributor may reimburse
expenses related to educational seminars and "due diligence" or training
meetings (to the extent permitted by applicable laws or the rules of the
Financial Industry Regulatory Authority (FINRA), formerly known as the NASD)
designed to increase sales representatives' awareness about Oppenheimer
funds, including travel and lodging expenditures. However, the Manager does
not consider a financial intermediary's sale of shares of the Fund or other
Oppenheimer funds when selecting brokers or dealers to effect portfolio
transactions for the funds.

Various factors are used to determine whether to make revenue sharing
payments. Possible considerations include, without limitation, the types of
services provided by the intermediary, sales of Fund shares, the redemption
rates on accounts of clients of the intermediary or overall asset levels of
Oppenheimer funds held for or by clients of the intermediary, the willingness
of the intermediary to allow the Distributor to provide educational and
training support for the intermediary's sales personnel relating to the
Oppenheimer funds, the availability of the Oppenheimer funds on the
intermediary's sales system, as well as the overall quality of the services
provided by the intermediary, and the Manager or Distributor's relationship
with the intermediary. The Manager and Distributor have adopted guidelines
for assessing and implementing each prospective revenue sharing arrangement.
To the extent that financial intermediaries receiving distribution-related
payments from the Manager or Distributor sell more shares of the Oppenheimer
funds or retain more shares of the funds in their client accounts, the
Manager and Distributor benefit from the incremental management and other
fees they receive with respect to those assets.

Payments may also be made by the Manager, the Distributor or the
Transfer Agent to financial intermediaries to compensate or reimburse them
for administrative or other client services provided, such as sub-transfer
agency services for shareholders, omnibus accounting or sub-accounting,
participation in networking arrangements, account set-up, recordkeeping and
other shareholder services. Payments may also be made for administrative
services related to the distribution of Fund shares through the intermediary.
Firms that may receive servicing fees with respect to Oppenheimer funds
include insurance companies that offer variable annuity or variable life
insurance products, retirement plan administrators, qualified tuition program
sponsors, banks and trust companies, and others. These fees may be used by
the service provider to offset or reduce fees that would otherwise be paid
directly to them by certain account holders.

The Statement of Additional Information contains more information about
revenue sharing and service payments made by the Manager or the Distributor.
Your dealer may charge you fees or commissions in addition to those disclosed
in this prospectus. You should ask your dealer or financial intermediary for
details about any such payments it receives from the Manager or the
Distributor and their affiliates, or any other fees or expenses it charges.

How Are Shares Redeemed? As with purchases, only the participating insurance
companies that hold Fund shares in their separate accounts for the benefit of
variable annuity contracts, variable life insurance policies or other
investment products can place orders to redeem shares. Contract holders and
policy holders should not directly contact the Fund or its transfer agent to
request a redemption of Fund shares. Contract owners should refer to the
withdrawal or surrender instructions in the accompanying prospectus of the
participating insurance company.

The share price that applies to a redemption order is the next net asset
value per share that is determined after the participating insurance company
(as the Fund's designated agent) receives a redemption request on a regular
business day from its contract or policy holder, provided that the Fund
receives the order from the insurance company, generally by 9:30 a.m. the
next regular business day at the office of its Transfer Agent in Colorado.
The participating insurance company must receive that order before the close
of the NYSE (usually 4:00 p.m. Eastern time). The Fund normally sends payment
by Federal Funds wire to the insurance company's account on the next business
day after the Fund receives the order (and no later than seven days after the
Fund's receipt of the order). Under unusual circumstances determined by the
Securities and Exchange Commission, payment may be delayed or suspended.

Dividends, Capital Gains and Taxes

Dividends. The Fund intends to declare dividends separately for each class of
shares from net investment income on an annual basis. Dividends and
distributions will generally be lower for Service Shares, which normally have
higher expenses. The Fund has no fixed dividend rate and cannot guarantee
that it will pay any dividends.

All dividends (and any capital gains distributions) will be reinvested
automatically in additional Fund shares at net asset value for the account of
the participating insurance company (unless the insurance company elects to
have dividends or distributions paid in cash).

Capital Gains. The Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term
or long-term capital gains each year. The Fund may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year. There can be no assurance that the Fund will pay any capital gains
distributions in a particular year.

Taxes. For a discussion of the tax status of a variable annuity contract, a
variable life insurance policy or other investment product of a participating
insurance company, please refer to the accompanying prospectus of your
participating insurance company. Because shares of the Fund may be purchased
only through insurance company separate accounts for variable annuity
contracts, variable life insurance policies or other investment products,
dividends paid by the Fund from net investment income and distributions (if
any) of net realized short-term and long-term capital gains will be taxable,
if at all, to the participating insurance company, although they may affect
the tax basis of certain types of distributions from those accounts.

This information is only a summary of certain federal income tax
information about an investment in Fund shares. You should consult with your
tax adviser or your participating insurance company representative about the
effect of an investment in the Fund under your contract or policy.

Financial Highlights

The Financial Highlights Table is presented to help you understand the Fund's
financial performance for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte & Touche LLP,
the Fund's independent registered public accounting firm, whose report, along
with the Fund's financial statements, is included in the Statement of
Additional Information, which is available upon request.

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

NON-SERVICE SHARES YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
------------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.69 $ 17.07 $ 17.35 $ 15.92 $ 13.16
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .43 1 .40 1 .33 1 .26 1 .27
Net realized and unrealized gain .19 1.38 .31 1.33 2.90
---------------------------------------------------------------------------
Total from investment operations .62 1.78 .64 1.59 3.17
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.46) (.36) (.30) (.16) (.41)
Distributions from net realized gain (1.44) (.80) (.62) -- --
---------------------------------------------------------------------------
Total dividends and/or distributions to shareholders (1.90) (1.16) (.92) (.16) (.41)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.41 $ 17.69 $ 17.07 $ 17.35 $ 15.92
===========================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.79% 11.15% 3.89% 10.10% 24.96%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $385,948 $ 435,639 $ 503,753 $ 547,290 $ 533,710
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $418,103 $ 456,513 $ 522,754 $ 528,655 $ 475,389
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.55% 2.42% 1.98% 1.59% 1.82%
Total expenses 0.75% 4 0.75% 4 0.74% 0.74% 0.76%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.73% 0.75% 0.74% 0.74% 0.76%
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 5 76% 5 67% 5 68% 5 248%

1. Per share amounts calculated based on the average shares outstanding
during the period.

2. Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods less than one full year. Total return information does
not reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total return
figures for all periods shown. Returns do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

Year Ended December 31, 2007 0.75%
Year Ended December 31, 2006 0.75%

5. The portfolio turnover rate excludes purchase and sale transactions of
To Be Announced (TBA) mortgage-related securities as follows:

PURCHASE TRANSACTIONS SALE TRANSACTIONS
------------------------------------------------------------------------
Year Ended December 31, 2007 $ 296,201,319 $ 315,527,720
Year Ended December 31, 2006 $ 612,825,833 $ 666,549,894
Year Ended December 31, 2005 $1,224,652,741 $1,250,455,539
Year Ended December 31, 2004 $1,460,076,994 $1,473,590,963

FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------

SERVICE SHARES YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
------------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.57 $ 16.97 $ 17.26 $ 15.87 $ 13.14
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .38 1 .36 1 .29 1 .23 1 .39
Net realized and unrealized gain .19 1.37 .31 1.31 2.74
---------------------------------------------------------------------------
Total from investment operations .57 1.73 .60 1.54 3.13
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.42) (.33) (.27) (.15) (.40)
Distributions from net realized gain (1.44) (.80) (.62) -- --
---------------------------------------------------------------------------
Total dividends and/or distributions to shareholders (1.86) (1.13) (.89) (.15) (.40)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.28 $ 17.57 $ 16.97 $ 17.26 $ 15.87
===========================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.49% 10.86% 3.67% 9.79% 24.69%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $121,399 $ 111,363 $ 88,156 $ 59,650 $ 25,302
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $117,012 $ 100,010 $ 72,977 $ 39,851 $ 9,908
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.30% 2.17% 1.74% 1.41% 1.37%
Total expenses 1.00% 4 1.01% 4 1.00% 1.02% 1.01%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 0.98% 1.01% 1.00% 1.02% 1.01%
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 5 76% 5 67% 5 68% 5 248%

1. Per share amounts calculated based on the average shares outstanding
during the period.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

Year Ended December 31, 2007 1.00%
Year Ended December 31, 2006 1.01%

5. The portfolio turnover rate excludes purchase and sale transactions of
To Be Announced (TBA) mortgage-related securities as follows:

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INFORMATION AND SERVICES
------------------------------------------------------------------------------
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The following additional information about the Fund is available without
charge upon request:
------------------------------------------------------------------------------

------------------------------------------------------------------------------
Statement of Additional Information
This document includes additional information about the Fund's investment
policies, risks, and operations. It is incorporated by reference into this
prospectus (which means it is legally part of this prospectus).

Annual and Semi-Annual Reports
Additional information about the Fund's investments and performance is
available in the Fund's Annual and Semi-Annual Reports to shareholders. The
Annual Report includes a discussion of market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year.
------------------------------------------------------------------------------

------------------------------------------------------------------------------
How to Get More Information
------------------------------------------------------------------------------
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports and the notice explaining the Fund's privacy policy:
------------------------------------------------------------------------------
------------------------------------------------------------------------------

------------------------------------------------------------------------------
By Telephone:
Call OppenheimerFunds Services toll-free: 1.800.981.2871

By Mail:
Write to:
OppenheimerFunds Services
P.O. Box 5270
------------------------------------------------------------------------------
Denver, Colorado 80217-5270
------------------------------------------------------------------------------

On the Internet:
You can request these documents by e-mail or through the OppenheimerFunds
website. You may also read or download certain documents on the
OppenheimerFunds website at: www.oppenheimerfunds.com.
------------------------------------------------------------------------------

------------------------------------------------------------------------------
Information about the Fund including the Statement of Additional Information
can be reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange
Commission at 1.202.551.8090. Reports and other information about the Fund
are available on the EDGAR database on the Securities and Exchange
Commission's Internet website at www.sec.gov. Copies may be obtained after
payment of a duplicating fee by electronic request at the Securities and
Exchange Commission's e-mail address: publicinfo@sec.gov or by writing to the
Securities and Exchange Commission's Public Reference Section, Washington,
D.C. 20549-0102.

No one has been authorized to provide any information about the Fund or to
make any representations about the Fund other than what is contained in this
prospectus. This prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any
state or other jurisdiction where it is unlawful to make such an offer.

The Fund's SEC File No. 811-4108

PR0670.001.0408 [logo] OppenheimerFunds
Distributor, Inc.
Printed on recycled paper

Appendix to Prospectus of
Oppenheimer Balanced Fund/VA
(a series of Oppenheimer Variable Account Funds)

Graphic material included in the prospectus of Oppenheimer Balanced
Fund/VA (the "Fund") under the heading "Annual Total Return (as of December
31 each year)":

A bar chart will be included in the prospectus of the Fund depicting
the annual total returns of a hypothetical $10,000 investment in shares of
the Fund for each of the ten most recent calendar years, without deducting
separate account expenses. Set forth below are the relevant data that will
appear on the bar chart:

Calendar
Year
Ended Annual Total Returns

12/31/98 6.66%
12/31/99 11.80%
12/31/00 6.44%
12/31/01 2.22%
12/31/02 -10.40%
12/31/03 24.96%
12/31/04 10.10%
12/31/05 3.89%
12/31/06 11.15%
12/31/07 3.79%

Oppenheimer
Capital Appreciation Fund/VA
A series of Oppenheimer Variable Account Funds

Prospectus dated April 29, 2008

Oppenheimer Capital Appreciation Fund/VA is a mutual fund that seeks
capital appreciation by investing in securities of well-known, established
companies.

Shares of the Fund are sold only as the underlying investment for variable
life insurance policies, variable annuity contracts and other insurance company
separate accounts. A prospectus for the insurance product you have selected
accompanies this prospectus and explains how to select shares of the Fund as an
investment under that insurance product, and which share class you are eligible
to purchase.

(OppenheimerFunds Logo)

Contents

About the Fund

The Fund's Investment Objective and Principal Investment Strategies

Main Risks of Investing in the Fund

The Fund's Past Performance

Fees and Expenses of the Fund

About the Fund's Investments

How the Fund is Managed

Investing in the Fund

How to Buy and Sell Shares

Dividends, Capital Gains and Taxes

Financial Highlights

ABOUT THE FUND

The Fund's Investment Objective and Principal Investment Strategies

What Is the Fund's Investment Objective? The Fund seeks capital
appreciation by investing in securities of well-known, established companies.

What Does the Fund Mainly Invest In? The Fund invests mainly in common
stocks of "growth companies." These may be newer companies or established
companies of any capitalization range that the portfolio manager believes may
appreciate in value over the long term. The Fund currently focuses mainly on
large-cap and mid-cap domestic companies, but can buy foreign stocks as well.

How Does the Portfolio Manager Decide What Securities to Buy or Sell? The
Fund's portfolio manager looks primarily for growth companies that he believes
have reasonably priced stock in relation to overall stock market valuations. The
portfolio manager focuses on factors that may vary in particular cases and over
time in seeking broad diversification of the Fund's portfolio among industries
and market sectors. Currently the portfolio manager looks for:

o companies in businesses with above-average growth potential,

o companies with growth rates that the portfolio manager believes are
sustainable over time,

o stocks with reasonable valuations relative to their growth potential.

Who Is the Fund Designed For? The Fund's shares are available only as an
investment option under certain variable annuity contracts, variable life
insurance policies and investment plans offered through insurance company
separate accounts of participating insurance companies, for investors seeking
capital appreciation in their investment over the long term, from investments in
common stocks of well-known companies. Those investors should be willing to
assume the risks of short-term share price fluctuations that are typical for a
fund focusing on stock investments. Since the Fund's income level will fluctuate
and will likely be small, it is not designed for investors needing an assured
level of current income. The Fund is not a complete investment program.

Main Risks of Investing in the Fund

All investments have some degree of risk. The Fund's investments are
subject to changes in their value from a number of factors described below.
There is also the risk that poor security selection by the Fund's investment
manager, OppenheimerFunds, Inc. (the "Manager"), will cause the Fund to
underperform other funds having a similar objective.

Changes in the overall market prices of securities and the income they pay
can occur at any time. The share price of the Fund will change daily based on
changes in market conditions, market prices of securities and in response to
other economic events.

|X| Risks of Investing in Stocks. Stocks fluctuate in price, and their
short-term volatility at times may be great. Because the Fund currently invests
primarily in common stocks of U. S. companies, the value of the Fund's portfolio
will be affected by changes in the stock markets. Market risk will affect the
Fund's net asset values per share, which will fluctuate as the values of the
Fund's portfolio securities change. A variety of factors can affect the price of
a particular stock and the prices of individual stocks do not all move in the
same direction uniformly or at the same time. Different stock markets may behave
differently from each other. Securities in the Fund's portfolio may not increase
as much as the market as a whole. Growth stocks may at times be favored by the
market and at other times may be out of favor. Some securities may be inactively
traded, and therefore, may not be readily bought or sold. Although some growth
stocks may appreciate quickly, investors should not expect the Fund's
investments to act in this manner. The Fund is designed for long-term capital
appreciation.

Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer. The Fund
invests mainly in securities of larger capitalization companies, but can also
invest in smaller capitalization companies, which may have more volatile stock
prices than larger companies.

|X| Industry and Sector Focus. At times the Fund may increase the relative
emphasis of its investments in a particular industry or sector. The prices of
stocks of issuers in a particular industry or sector may go up and down in
response to changes in economic conditions, government regulations, availability
of basic resources or supplies, or other events that affect that industry or
sector more than others. To the extent that the Fund increases the relative
emphasis of its investments in a particular industry or sector, its share values
may fluctuate in response to events affecting that industry or sector. To some
extent that risk may be limited by the Fund's policy of not concentrating 25% or
more of its total assets in investments in any one industry or group of
industries.

|X| Risks of Growth Stocks. Stocks of growth companies may offer
opportunities for greater capital appreciation but may be more volatile than
stocks of larger, more established companies. If the company's earnings growth
fails to increase as expected, the stock price of a growth company may decline
sharply.

|X| Risks of Foreign Investing. The change in value of a foreign currency
against the U.S. dollar will result in a change in the U.S. dollar value of
securities denominated in that foreign currency. Foreign issuers are not subject
to the same accounting and disclosure requirements that U.S. companies are
subject to. The value of foreign investments may be affected by exchange control
regulations, expropriation or nationalization of a company's assets, foreign
taxes, delays in settlement of transactions, changes in governmental economic or
monetary policy in the U.S. or abroad, or other economic or political factors.

Additionally, if the Fund invests a significant amount of its assets in
foreign securities, it may be exposed to "time-zone arbitrage" attempts by
investors seeking to take advantage of the differences in value of foreign
securities that might result from events that occur after the close of the
foreign securities market on which a foreign security is traded and before the
close of the New York Stock Exchange (the "NYSE") that day, when the Fund's net
asset value is calculated. If such time-zone arbitrage were successful, it might
dilute the interests of other shareholders. However, the Fund's use of "fair
value pricing" to adjust the closing market prices of foreign securities under
certain circumstances, to reflect what the Manager and the Board believe to be
their fair value may help deter those activities.

How Risky is the Fund Overall? The risks described above collectively form
the overall risk profile of the Fund and can affect the value of the Fund's
investments, its investment performance and its prices per share. Particular
investments and investment strategies also have risks. These risks mean that you
can lose money by investing in the Fund. When you redeem your shares, they may
be worth more or less than what you paid for them. There is no assurance that
the Fund will achieve its investment objective.

In the short term, stock markets can be volatile, and the prices of the
Fund's shares can go up and down substantially. The Fund generally does not use
income-oriented investments to a great extent to help cushion the Fund's share
prices from stock market volatility, except for defensive purposes. Because it
focuses on larger companies, the Fund generally may be less volatile than funds
focusing on investments in small-cap stocks, but the Fund may have greater risk
of volatility than funds that invest in both stocks and fixed income securities.

An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in
the Fund, by showing changes in the Fund's performance for Non-Service Shares
from year to year for the last ten calendar years and by showing how the average
annual total returns of the Fund's shares compare to those of two broad-based
market indices. Because the Fund's Service Shares are subject to a service fee,
their performance is expected to be lower for any given period. The Fund's past
investment performance is not necessarily an indication of how the Fund will
perform in the future.

Annual Total Returns (as of December 31 each year) [See appendix to
prospectus for data in bar chart showing annual total returns]

Charges imposed by the separate accounts that invest in the Fund are not
included in the calculations of return in this bar chart, and if those charges
were included, the returns would be less than those shown.

During the period shown in the bar chart, the highest return (not
annualized) for a calendar quarter was 28.49% (4thQtr `99) and the lowest return
(not annualized) for a calendar quarter was -20.45% (3rdQtr `01).

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

Average Annual Total Returns 5 Years 10 Years
---------------------------------------------------- (or life of class, if (or life of class, if
for the periods ended December 31, 2007 1 Year less) less)

Oppenheimer Capital Appreciation Fund/VA 14.15% 12.64% 7.35%
Non-Service Shares (inception April 3, 1985)

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

Oppenheimer Capital Appreciation Fund/VA 13.86% 12.37% 6.76%
Service Shares (inception September 18, 2001)

S&P 500 Index 5.49% 12.82% 5.91%(1)
7.55%(2)

Russell 1000(R)Growth Index (reflects no deduction 11.81% 12.11% 3.83%(1)
for fees, expenses or taxes) 6.36%(2)
(1) Since December 31, 1997.
(2) Since September 30, 2001.

The Fund's average annual total returns in the table measure the
performance of a hypothetical account without deducting charges imposed by the
separate accounts that invest in the Fund and assume that all dividends and
capital gains distributions have been reinvested in additional shares. The
performance of the Fund's shares is compared to the S&P 500 Index, an
unmanaged index of equity securities that is a measure of the general domestic
stock market, and the Russell 1000(R)Growth Index, an unmanaged index of 1,000
U.S. large-cap growth stocks. The index performance includes reinvestment of
income but does not reflect transaction costs, fees or expenses. The Fund's
investments vary from those in the index.

The Fund's total returns should not be expected to be the same as the
returns of other Oppenheimer funds, even if both funds have the same portfolio
managers and/or similar names.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and
expenses you may pay if you buy and hold shares of the Fund. The Fund pays a
variety of expenses directly for management of its assets, administration,
distribution of its shares and other services. Those expenses are subtracted
from the Fund's assets to calculate the Fund's net asset values per share. All
shareholders therefore pay those expenses indirectly. The numbers below are
based on the Fund's expenses during its fiscal year ended December 31, 2007.

Shareholder Fees. The Fund does not charge an initial sales charge to buy
shares or to reinvest dividends. There are no redemption fees and no contingent
deferred sales charges. Please refer to the accompanying prospectus of the
participating insurance company for information on initial or contingent
deferred sales charges, exchange fees or redemption fees for that variable life
insurance policy, variable annuity or other investment product. Those charges
and fees are not reflected in either of the tables below.

--------------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
--------------------------------------------------------------------------------------------------------------------
------------------------------------------------ ----------------------------------- -------------------------------
Non-Service Shares Service Shares
------------------------------------------------ ----------------------------------- -------------------------------
------------------------------------------------ ----------------------------------- -------------------------------
Management Fees 0.64% 0.64%
------------------------------------------------ ----------------------------------- -------------------------------
------------------------------------------------ ----------------------------------- -------------------------------
Distribution and Service (12b-1) Fees None 0.25%
------------------------------------------------ ----------------------------------- -------------------------------
------------------------------------------------ ----------------------------------- -------------------------------

Other Expenses 0.01% 0.02%

Total Annual Operating Expenses 0.65% 0.91%

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

Expenses may vary in future years. "Other Expenses" include transfer agent
fees, custodial fees, and accounting and legal expenses the Fund pays. The
Fund's transfer agent has voluntarily agreed to limit transfer and shareholder
servicing agent fees to 0.35% per fiscal year, for both classes. That
undertaking may be amended or withdrawn at any time. For the Fund's fiscal year
ended December 31, 2007, the transfer agent fees did not exceed the expense
limitation described above. The Fund also receives certain credits from the
Fund's custodian that, during the fiscal year, reduced its custodial expenses
for both classes less than 0.01% of average daily net assets.

EXAMPLE. The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in shares of the Fund for the
time periods indicated and reinvest your dividends and distributions. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Separate account or contract expenses
are not included and if they were included, overall expenses would be higher.
Your actual costs may be higher or lower, because expenses will vary over time.
Based on these assumptions your expenses would be as follows, whether or not you
redeem your investment at the end of each period:

Non-Service Shares $67 $209 $363 $813

Service Shares $93 $291 $506 $1,125

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

About the Fund's Investments

The Fund's Principal Investment Policies and Risks. The allocation of the
Fund's portfolio among different types of investments will vary over time based
on the Manager's evaluation of economic and market trends. The Fund's portfolio
might not always include all of the different types of investments described in
this prospectus. The Statement of Additional Information contains more detailed
information about the Fund's investment policies and risks.

The Manager tries to reduce risks by carefully researching securities
before they are purchased and by attempting to limit valuation risk by being
price sensitive. The Fund attempts to reduce its exposure to market risks by
diversifying its investments, that is, by not holding a substantial percentage
of the stock of any one company and by not investing too great a percentage of
the Fund's assets in any one issuer. Also, the Fund does not concentrate 25% or
more of its total assets in any one industry or group of industries.

However, changes in the overall market prices of securities can occur at
any time. The share prices of the Fund will change daily based on changes in
market prices of securities and market conditions and in response to other
economic events.

|X| Stock Investments. The Manager looks for stocks of companies that have
growth potential. Growth companies may be developing new products or services or
may be expanding into new markets for their products. They may be newer
companies or more established companies entering a growth cycle. The Fund's
investments are not limited to issuers in a specific capitalization range, such
as large-cap or small-cap companies, and the Fund can invest in issuers in all
capitalization ranges. Market capitalization refers to the market value of all
of a company's issued and outstanding stock. Currently, the Fund's stock
investments are focused on large-cap and mid-cap issuers, but that emphasis can
change over time. Because the stocks of companies that have smaller market
capitalizations tend to be more volatile, to the extent that the Fund holds
stocks of issuers with smaller capitalizations, its share prices may fluctuate
more and the risks of loss are greater.

The Fund's equity investments may be exchange-traded or over-the-counter
securities. Over-the-counter securities may have less liquidity than
exchange-traded securities.

Less established growth companies tend to retain a large part of their
earnings for research, development or investment in capital assets. Therefore,
they do not tend to emphasize paying dividends, and may not pay any dividends
for a protracted period. They are selected for the Fund's portfolio because the
Manager believes the price of the stock will increase over time.

|X| Cyclical Opportunities. The Fund may also seek to take advantage of
changes in the business cycle by investing in companies that are sensitive to
those changes if the Manager believes they have growth potential. For example,
when the economy is expanding, companies in the consumer durables and technology
sectors might benefit and present long-term growth opportunities. The Fund might
sometimes seek to take tactical advantage of short-term market movements or
events affecting particular issuers or industries.

|X| Foreign Securities. The Fund can buy foreign equity and debt
securities. It would buy debt securities primarily for liquidity or defensive
purposes, including debt securities issued by foreign companies or by foreign
governments and their agencies. The Fund currently does not expect to have more
than 35% of its total assets invested in foreign securities, although it has the
ability to invest in them without limit.

Special Portfolio Diversification Requirements. To enable a variable
annuity or variable life insurance contract based on an insurance company
separate account to qualify for favorable tax treatment under the Internal
Revenue Code, the underlying investments must follow special diversification
requirements that limit the percentage of assets that can be invested in
securities of particular issuers. The Fund's investment program is managed to
meet those requirements, in addition to other diversification requirements under
the Internal Revenue Code and the Investment Company Act of 1940 that apply to
publicly-sold mutual funds.

Failure by the Fund to meet those special requirements could cause earnings
on a contract owner's interest in an insurance company separate account to be
taxable income. Those diversification requirements might also limit, to some
degree, the Fund's investment decisions in a way that could reduce its
performance.

Can the Fund's Investment Objective and Policies Change? The Fund's Board
of Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to this
prospectus. Fundamental policies cannot be changed without the approval of a
majority of the Fund's outstanding voting shares. The Fund's investment
objective is a fundamental policy. Other investment restrictions that are
fundamental policies are listed in the Statement of Additional Information. An
investment policy is not fundamental unless this prospectus or the Statement of
Additional Information says that it is.

Other Investment Strategies. To seek its objective, the Fund can use the
investment techniques and strategies described below. The Fund might not always
use all of them. These techniques have risks, although some are designed to help
reduce overall investment or market risks.

|X| Other Equity Securities. While the Fund emphasizes investments in
common stocks, it can also buy preferred stocks and securities convertible into
common stock. The Manager considers convertible securities to be "equity
equivalents" because of the conversion feature and in those cases their rating
has less impact on the Manager's investment decision than in the case of other
debt securities. Nevertheless, convertible debt securities are subject to both
"credit risk" (the risk that the issuer will not pay interest or repay principal
in a timely manner) and "interest rate risk" (the risk that prices of the
securities will be affected inversely by changes in prevailing interest rates).
If the Fund buys convertible securities (or other debt securities), it will
focus primarily on investment-grade securities which pose less credit risk than
lower-grade debt securities.

|X| Illiquid and Restricted Securities. Investments may be illiquid because
they do not have an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. Restricted securities may have
terms that limit their resale to other investors or may require registration
under applicable securities laws before they may be sold publicly. The Fund will
not invest more than 15% of its net assets in illiquid or restricted securities
but is not required to sell them due to declines in the Fund's share price.
Certain restricted securities that are eligible for resale to qualified
institutional purchasers may not be subject to that limit. The Manager monitors
holdings of illiquid securities on an ongoing basis to determine whether to sell
any holdings to maintain adequate liquidity.

|X| Derivative Investments. The Fund can invest in a number of different
kinds of "derivative" investments. In general terms, a derivative investment is
an investment contract whose value depends on (or is derived from) the value of
an underlying asset, interest rate or index. In the broadest sense, options,
futures contracts, and other hedging instruments the Fund might use may be
considered "derivative" investments. In addition to using derivatives for
hedging, the Fund might use certain derivative investments because they offer
the potential for increased value. The Fund currently does not use derivatives
to a significant degree and is not required to use them in seeking its
objective.

Derivatives have risks. If the issuer of the derivative investment does not
pay the amount due, the Fund can lose money on the investment. The underlying
security or investment on which a derivative is based, and the derivative
itself, may not perform the way the Manager expected it to. As a result of these
risks, the Fund could realize less principal or income from the investment than
expected or its hedge might be unsuccessful. As a result, the Fund's share
prices could fall. Certain derivative investments held by the Fund might be
illiquid.

|X| Hedging. The Fund can buy and sell certain futures contracts, put and
call options, including options on futures and broadly-based securities indices,
swaps, forward contracts and other derivative securities. These investments are
referred to as "hedging instruments." The Fund does not currently use hedging
extensively and is not required to use hedging instruments to seek its
objective. The does not use hedging instruments for speculative purposes.

The Fund can buy and sell options, swaps, futures and forward contracts for
a number of purposes. It might do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or to
establish a position in the securities market as a temporary substitute for
purchasing individual securities. Forward contracts can be used to try to manage
foreign currency risks on the Fund's foreign investments. Foreign currency
options can be used to try to protect against declines in the dollar value of
foreign securities the Fund owns, or to protect against an increase in the
dollar cost of buying foreign securities.

There are special risks in particular hedging strategies. For example,
options trading involves the payment of premiums and can increase portfolio
turnover. If an investment that is subject to a covered call written by the Fund
increases in value above the call price, the Fund may be required to sell the
investment at the call price and may not be able to realize any gain above that
price. If the Manager uses a hedging instrument at the wrong time or judges
market conditions incorrectly, the hedge might fail and the strategy could
reduce the Fund's return. The Fund could also experience losses if the prices of
its futures and options positions were not correlated with its other investments
or if it could not close out a position because of an illiquid market.

|X| Investments in Oppenheimer Institutional Money Market Fund. The Fund
can invest its free cash balances in Class E shares of Oppenheimer Institutional
Money Market Fund to provide liquidity or for defensive purposes. The Fund
invests in Oppenheimer Institutional Money Market Fund rather than purchasing
individual short-term investments to try to seek a higher yield than it could
obtain on its own. Oppenheimer Institutional Money Market Fund is a registered
open-end management investment company, regulated as a money market fund under
the Investment Company Act of 1940, as amended and is part of the Oppenheimer
Family of Funds. It invests in a variety of short-term, high-quality,
dollar-denominated money market instruments issued by the U.S. government,
domestic and foreign corporations, other financial institutions, and other
entities. Those investments may have a higher rate of return than the
investments that would be available to the Fund directly. At the time of an
investment, the Manager cannot always predict what the yield of the Oppenheimer
Institutional Money Market Fund will be because of the wide variety of
instruments that fund holds in its portfolio. The return on those investments
may, in some cases, be lower than the return that would have been derived from
other types of investments that would provide liquidity. As a shareholder, the
Fund will be subject to its proportional share of the expenses of Oppenheimer
Institutional Money Market Fund's Class E shares, including its advisory fee.
However, the Manager will waive a portion of the Fund's advisory fee to the
extent of the Fund's share of the advisory fee paid to the Manager by
Oppenheimer Institutional Money Market Fund.

|X| Temporary Defensive and Interim Investments. For temporary defensive
purposes in times of adverse or unstable market, economic or political
conditions, the Fund can invest up to 100% of its assets in investments that may
be inconsistent with the Fund's principal investment strategies. Generally the
Fund would invest in shares of Oppenheimer Institutional Money Market Fund or in
the types of money market instruments described above or in other short-term
U.S. government securities. The Fund might also hold these types of securities
as interim investments pending the investment of proceeds from the sale of Fund
shares or the sale of Fund portfolio securities or to meet anticipated
redemptions of Fund shares. To the extent the Fund invests in these securities,
it might not achieve its investment objective.

|X| Loans of Portfolio Securities. The Fund may make loans of its portfolio
securities, with a value not to exceed 25% of its net assets, in accordance with
policies approved by the Fund's Board. The Fund has entered into a securities
lending agreement with JPMorgan Chase Bank, N.A. ("JPMorgan Chase") for that
purpose. Under the agreement, the Fund's portfolio securities may be loaned to
brokers, dealers and financial institutions, provided that such loans comply
with the collateralization and other requirements of the securities lending
agreement, the Fund's policies and applicable government regulations. JPMorgan
Chase has agreed, in general, to bear the risk that a borrower may default on
its obligation to return loaned securities. However, the Fund will be
responsible for risks associated with the investment of cash collateral,
including the risk of a default by the issuer of a security in which cash
collateral has been invested. If that occurs, the Fund may incur additional
costs in seeking to obtain the collateral or may lose the amount of the
collateral investment. The Fund may also lose money if the value of the
investments purchased with cash collateral decreases.

|X| Portfolio Turnover. The Fund may engage in active and frequent trading
to try to achieve its objective. It might have a turnover rate in excess of 100%
annually. Increased portfolio turnover creates higher brokerage and transaction
costs for the Fund (and may reduce performance). For a contract owner, any
increase in realized gains will generally not be taxable directly but may affect
the owner's tax basis in the account. The Financial Highlights table at the end
of this prospectus shows the Fund's portfolio turnover rates during prior fiscal
years.

PORTFOLIO HOLDINGS. The Fund's portfolio holdings are included in
semi-annual and annual reports that are distributed to shareholders of the Fund
within 60 days after the close of the period for which such report is being
made. The Fund also discloses its portfolio holdings in its Statements of
Investments on Form N-Q, which are filed with the Securities and Exchange
Commission no later than 60 days after the close of its first and third fiscal
quarters. These required filings are publicly available at the Securities and
Exchange Commission. Therefore, portfolio holdings of the Fund are made publicly
available no later than 60 days after the close of each of the Fund's fiscal
quarters.

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information.

How the Fund is Managed

The Manager. The Manager chooses the Fund's investments and handles its
day-to-day business. The Manager carries out its duties, subject to the policies
established by the Fund's Board of Trustees, under an investment advisory
agreement that states the Manager's responsibilities. The agreement sets the
fees the Fund pays to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.

The Manager has been an investment adviser since 1960. The Manager and its
subsidiaries and controlled affiliates managed more than $240 billion in assets
as of March 31, 2008, including other Oppenheimer funds with more than 6 million
shareholder accounts. The Manager is located at Two World Financial Center, 225
Liberty Street, 11th Floor, New York, New York 10281-1008.

A discussion regarding the basis for the Board of Trustees' approval of the
Fund's investment advisory contract is available in the Fund's Annual Report to
shareholders for the year ended December 31, 2007.

|X| Portfolio Manager. The Fund's portfolio is managed by Marc L. Baylin,
CFA, who is primarily responsible for the day-to-day management of the Fund's
investments. Mr. Baylin has been a portfolio manager and Vice President of the
Fund since October 2005 and has been a Vice President of the Manager and a
member of the Manager's Growth Equity Investment Team since September 2005. He
was Managing Director and Lead Portfolio Manager at JPMorgan Fleming Investment
Management from June 2002 to August 2005 and was a Vice President of T. Rowe
Price, where he was an investment analyst from June 1993 and a portfolio manager
from March 1999 to June 2002.

The Statement of Additional Information provides additional information
about the portfolio manager's compensation, other accounts he manages and his
ownership of Fund shares.

|X| Possible Conflicts of Interest. The investment activities of the
Manager and its affiliates in regard to other accounts they manage may present
conflicts of interest that could disadvantage the Fund and its shareholders. The
Manager or its affiliates may provide investment advisory services to other
funds and accounts that have investment objectives or strategies that differ
from, or are contrary to, those of the Fund. That may result in another such
fund or account holding investment positions that are adverse to the Fund's
investment strategies or activities. For example, the Fund may take a long
position in a security at the same time that another fund or account advised by
the Manager takes a short position in the same security.

Other funds or accounts advised by the Manager or its affiliates may have
conflicting interests arising from investment objectives that are similar to
those of the Fund. Those funds and accounts may engage in, and compete for,
transactions in the same types of securities or other investments as the Fund.
At other times, there may be conflicts of interest with other funds or accounts
that invest in one of the same issuers that the Fund invests in. For example,
the Fund may invest in an issuer's equity or debt securities that are
subordinate to other securities of that issuer held by another fund or account
the Manager advises.

The Manager and its affiliates are not obligated to make available to the
Fund's investment personnel any information regarding the strategies or
investment activities of other funds or accounts that the Manager and its
affiliates advise. The trading and other investment activities of those other
funds or accounts are carried out without regard to the investment activities of
the Fund and, as a result, the value of securities held by the Fund or the
Fund's investment strategies may be adversely affected. The Fund's investment
performance will usually differ from the performance of other accounts advised
by the Manager or its affiliates and the Fund may experience losses during
periods in which other accounts advised by the Manager or its affiliates achieve
significant gains.

The Fund offers its shares to separate accounts of different insurance
companies, as an investment for their variable annuity, variable life and other
investment product contracts. While the Fund does not foresee any disadvantages
to contract owners from these arrangements, it is possible that the interests of
owners of different contracts participating in the Fund through different
separate accounts might conflict. For example, a conflict could arise because of
differences in tax treatment.

The Fund's Board of Trustees has procedures to monitor the portfolio for
possible conflicts to determine what action should be taken. Such policies and
procedures may also limit the Fund's investment activities and affect its
performance. If a conflict occurs, the Board might require one or more
participating insurance company separate accounts to withdraw their investments
in the Fund. That could force the Fund to sell securities at disadvantageous
prices, and orderly portfolio management could be disrupted. Also, the Board
might refuse to sell shares of the Fund to a particular separate account, or
could terminate the offering of the Fund's shares if required to do so by law or
if it would be in the best interests of the shareholders of the Fund to do so.

INVESTING IN THE FUND

How to Buy and Sell Shares

How Are Shares Purchased? Shares of the Fund may be purchased only by
separate investment accounts of participating insurance companies as an
underlying investment for variable life insurance policies, variable annuity
contracts or other investment products. Individual investors cannot buy shares
of the Fund directly. Please refer to the accompanying prospectus of the
participating insurance company for information on how to select the Fund as an
investment option for that variable life insurance policy, variable annuity or
other investment product. That prospectus will indicate whether you are eligible
to purchase Service Shares of the Fund. The Fund reserves the right to refuse
any purchase order when the Manager believes it would be in the Fund's best
interests to do so.

ARE THERE LIMITATIONS ON FREQUENT PURCHASES AND REDEMPTIONS?

Risks from Excessive Purchase and Redemption Activity. Frequent purchases
and redemptions of Fund shares may interfere with the Manager's ability to
manage the Fund's investments, may increase the Fund's transaction and
administrative costs and/or may affect the Fund's performance. For example, if
large dollar amounts were involved in redemption transactions, the Fund might be
required to sell portfolio securities at unfavorable times to meet such
redemption requests, and the Fund's transaction or administrative expenses might
be increased. The extent to which the Fund might be affected by such trading
activity would depend on various factors, such as the current asset size of the
Fund, the nature of its investments, the amount of Fund assets the portfolio
manager maintains in cash or cash equivalents, and the aggregate dollar amount,
number and frequency of the share trades.

Policies on Disruptive Activity. The Manager and the Fund's Board of
Trustees have adopted the following policies and procedures to try to prevent
frequent and/or excessive purchase and redemption activity.

The Transfer Agent and the Distributor, on behalf of the Fund, have entered
into agreements with participating insurance companies designed to detect and
restrict excessive short term trading activity by contract or policy owners or
their financial advisers in their accounts. The Transfer Agent generally does
not consider periodic asset allocation or re-balancing that affects a portion of
the Fund shares held in the account of a policy or contract owner to be
"excessive trading." However, the Transfer Agent has advised participating
insurance companies that it generally considers certain other types of trading
activity to be "excessive," such as making a "transfer" out of the Fund within
30 days of buying Fund shares (by the sale of the recently purchased Fund shares
and the purchase of shares of another fund) or making more than six "round trip
transfers" between funds during one year. The agreements require participating
insurance companies to provide transaction information to the Fund and to
execute Fund instructions to restrict trading in Fund shares.

A participating insurance company may also have its own policies and
procedures and may impose its own restrictions or limitations to discourage
short-term and/or excessive trading by its policy or contract owners. Those
policies and procedures may be different from the Fund's in certain respects.
You should refer to the prospectus for your insurance company variable annuity
contract for specific information about the insurance company's policies. To the
extent that the Fund has agreed to utilize an insurance company's short-term or
excessive trading restrictions, policy or contract owners may be required to
only transmit purchase or redemption orders by first class U.S. mail.

Monitoring the Policies. The Fund's policies and procedures for detecting
and deterring frequent or excessive trading are administered by the Fund's
transfer agent. However, the Transfer Agent presently does not have the ability
to directly monitor trading activity in the accounts of policy or contract
owners within the participating insurance companies' accounts. The Transfer
Agent's ability to monitor and deter excessive short-term trading in such
insurance company accounts ultimately depends on the capability and diligence of
each participating insurance company, under their agreements with the Transfer
Agent, the Distributor and the Fund, in monitoring and controlling the trading
activity of the policy or contract owners in the insurance company's accounts.

The Transfer Agent will attempt to monitor the net effect on the Fund's
assets from the purchase and redemption activity in the accounts of
participating insurance companies and will seek to identify patterns that may
suggest excessive trading by the contract or policy owners who invest in the
insurance company's accounts. If the Transfer Agent believes it has observed
evidence of possible excessive trading activity, it will ask the participating
insurance companies or other registered owners to provide information about the
transaction activity of the contract or policy holders in their respective
accounts, and to take appropriate action. In that case, the insurance company
must confirm to the Transfer Agent that appropriate action has been taken to
curtail the excessive trading activity.

The Transfer Agent will, subject to the limitations described in this
section, limit or terminate the trading activity of any person, group or account
that it believes would be excessive or disruptive. However, the Transfer Agent
may not be able to detect or curtail all such trading activity in the Fund. The
Transfer Agent will evaluate trading activity on a case by case basis and the
limitations placed on trading may vary between accounts.

There is no guarantee that the policies and procedures described above will
be effective to enable the Fund's Transfer Agent to identify and deter excessive
short-term trading, and if the Transfer Agent is not able to detect and curtail
such activity, frequent trading could occur in the Fund.

Right to Refuse Purchase Orders. The Distributor and/or the Transfer Agent
may refuse any purchase order in their discretion and are not obligated to
provide notice before rejecting an order.

Information about your investment in the Fund through your variable annuity
contract, variable life insurance policy or other plan can be obtained only from
your participating insurance company or its servicing agent. The Fund's Transfer
Agent does not hold or have access to those records. Instructions for buying or
selling shares of the Fund can only be given to your insurance company or its
servicing agent, not directly to the Fund or its Transfer Agent.

At What Price Are Shares Sold? Shares are sold to participating insurance
companies at their offering price, which is the net asset value per share. The
Fund does not impose any sales charge on purchases of its shares. If there are
any charges imposed under the variable annuity, variable life or other contract
through which Fund shares are purchased, they are described in the accompanying
prospectus of the participating insurance company.

Net Asset Value. The Fund calculates the net asset value of each class of
shares as of the close of the NYSE, on each day the NYSE is open for trading
(referred to in this prospectus as a "regular business day"). The NYSE normally
closes at 4:00 p.m., Eastern time, but may close earlier on some days. All
references to time in this prospectus mean "Eastern time".

The net asset value per share for a class of shares on a "regular business
day" is determined by dividing the value of the Fund's net assets attributable
to that class by the number of shares of that class outstanding on that day. To
determine net asset values, the Fund assets are valued primarily on the basis of
current market quotations. If market quotations are not readily available or do
not accurately reflect fair value for a security (in the Manager's judgment) or
if a security's value has been materially affected by events occurring after the
close of the market on which the security is principally traded, that security
may be valued by another method that the Board of Trustees believes accurately
reflects the fair value. Because some foreign securities trade in markets and on
exchanges that operate on weekends and U.S. holidays, the values of some of the
Fund's foreign investments may change on days when investors cannot buy or
redeem Fund shares.

The Board has adopted valuation procedures for the Fund and has delegated
the day-to-day responsibility for fair value determinations to the Manager's
Valuation Committee. Fair value determinations by the Manager are subject to
review, approval and ratification by the Board at its next scheduled meeting
after the fair valuations are determined. In determining whether current market
prices are readily available and reliable, the Manager monitors the information
it receives in the ordinary course of its investment management responsibilities
for significant events that it believes in good faith will affect the market
prices of the securities of issuers held by the Fund. Those may include events
affecting specific issuers (for example, a halt in trading of the securities of
an issuer on an exchange during the trading day) or events affecting securities
markets (for example, a foreign securities market closes early because of a
natural disaster). The Fund uses fair value pricing procedures to reflect what
the Manager and the Board believe to be more accurate values for the Fund's
portfolio securities, although it may not always be able to accurately determine
such values. There can be no assurance that the Fund could obtain the fair value
assigned to a security if it were to sell the security at the same time at which
the Fund determines its net asset value per share. In addition, the discussion
of "time-zone arbitrage" describes effects that the Fund's fair value pricing
policy is intended to counteract.

If, after the close of the principal market on which a security held by the
Fund is traded and before the time as of which the Fund's net asset values are
calculated that day, an event occurs that the Manager learns of and believes in
the exercise of its judgment will cause a material change in the value of that
security from the closing price of the security on the principal market on which
it is traded, the Manager will use its best judgment to determine a fair value
for that security.

The offering price that applies to an order from a participating insurance
company is based on the next calculation of the net asset value per share that
is made after the insurance company (as the Fund's designated agent to receive
purchase orders) receives a purchase order from its contract owners to purchase
Fund shares on a regular business day, provided that the Fund receives the order
from the insurance company, generally by 9:30 a.m. Eastern time on the next
regular business day at the offices of its Transfer Agent in Colorado.

|X| Classes of Shares. The Fund currently offers two classes of shares. The
class of shares designated as Service Shares is subject to a Distribution and
Service Plan. The impact of the expenses of the Plan on Service Shares is
described below. The class of shares that is not subject to a Plan has no class
"name" designation, but is referred to herein as "Non-Service" Shares. The
different classes of shares represent investments in the same portfolio of
securities but are expected to be subject to different expenses and will likely
have different share prices.

Distribution and Service Plan for Service Shares. The Fund has adopted a
Distribution and Service Plan for Service Shares to pay the Distributor for
distribution related services, personal services and account maintenance for the
Fund's Service Shares. Under the Plan, payments are made quarterly at an annual
rate of up to 0.25% of the average annual net assets of Service Shares of the
Fund. Because these fees are paid out of the Fund's assets on an on-going basis,
over time these fees will increase the cost of your investment and may cost you
more than other types of fees or sales charges. The Distributor currently uses
all of those fees to compensate sponsor(s) of the insurance products that offer
Fund shares, for providing personal service and maintenance of accounts of their
variable contract owners that hold Service Shares.

OTHER PAYMENTS TO FINANCIAL INTERMEDIARIES AND SERVICE PROVIDERS. The
Manager and the Distributor, in their discretion, also may pay dealers or other
financial intermediaries and service providers for distribution and/or
shareholder servicing activities. These payments are made out of the Manager's
and/or the Distributor's own resources, including from the profits derived from
the advisory fees the Manager receives from the Fund. These cash payments, which
may be substantial, are paid to many firms having business relationships with
the Manager and Distributor. These payments are in addition to any distribution
fees, servicing fees, or transfer agency fees paid directly or indirectly by the
Fund to these financial intermediaries. These payments by the Manager or
Distributor from their own resources are not reflected in the tables in the
section called "Fees and Expenses of the Fund" in this prospectus because they
are not paid by the Fund.

"Financial intermediaries" are firms that offer and sell Fund shares to
their clients, or provide shareholder services to the Fund, or both, and receive
compensation for doing so. Your securities dealer or insurance agent, for
example, is a financial intermediary, and there are other types of financial
intermediaries that could receive payments relating to the sale or servicing of
the Fund's shares. In addition to dealers and insurance agents, the financial
intermediaries that may receive payments include the insurance companies that
offer variable annuity or variable life insurance products.

In general, these payments to financial intermediaries can be categorized
as "distribution-related" or "servicing" payments. Payments for
distribution-related expenses, such as marketing or promotional expenses, are
often referred to as "revenue sharing." Revenue sharing payments may be made on
the basis of the sales of shares attributable to that financial intermediary,
the average net assets of the Fund and other Oppenheimer funds attributable to
the accounts of that financial intermediary and its clients, negotiated lump sum
payments for distribution services provided, or sales support fees. In some
circumstances, revenue sharing payments may create an incentive for a dealer or
other financial intermediary or their representatives to recommend or offer
shares of the Fund or other Oppenheimer funds to their customers. These payments
also may give an intermediary an incentive to cooperate with the Distributor's
marketing efforts. A revenue sharing payment may, for example, qualify the Fund
for preferred status with the intermediary receiving the payment or provide
representatives of the Distributor with access to representatives of the
intermediary's sales force, in some cases on a preferential basis over funds of
competitors. Additionally, as firm support, the Manager or Distributor may
reimburse expenses related to educational seminars and "due diligence" or
training meetings (to the extent permitted by applicable laws or the rules of
the Financial Industry Regulatory Authority (FINRA), formerly known as the NASD)
designed to increase sales representatives' awareness about Oppenheimer funds,
including travel and lodging expenditures. However, the Manager does not
consider a financial intermediary's sale of shares of the Fund or other
Oppenheimer funds when selecting brokers or dealers to effect portfolio
transactions for the funds.

Various factors are used to determine whether to make revenue sharing
payments. Possible considerations include, without limitation, the types of
services provided by the intermediary, sales of Fund shares, the redemption
rates on accounts of clients of the intermediary or overall asset levels of
Oppenheimer funds held for or by clients of the intermediary, the willingness of
the intermediary to allow the Distributor to provide educational and training
support for the intermediary's sales personnel relating to the Oppenheimer
funds, the availability of the Oppenheimer funds on the intermediary's sales
system, as well as the overall quality of the services provided by the
intermediary, and the Manager or Distributor's relationship with the
intermediary. The Manager and Distributor have adopted guidelines for assessing
and implementing each prospective revenue sharing arrangement. To the extent
that financial intermediaries receiving distribution-related payments from the
Manager or Distributor sell more shares of the Oppenheimer funds or retain more
shares of the funds in their client accounts, the Manager and Distributor
benefit from the incremental management and other fees they receive with respect
to those assets.

Payments may also be made by the Manager, the Distributor or the Transfer
Agent to financial intermediaries to compensate or reimburse them for
administrative or other client services provided, such as sub-transfer agency
services for shareholders, omnibus accounting or sub-accounting, participation
in networking arrangements, account set-up, recordkeeping and other shareholder
services. Payments may also be made for administrative services related to the
distribution of Fund shares through the intermediary. Firms that may receive
servicing fees with respect to Oppenheimer funds include insurance companies
that offer variable annuity or variable life insurance products, retirement plan
administrators, qualified tuition program sponsors, banks and trust companies,
and others. These fees may be used by the service provider to offset or reduce
fees that would otherwise be paid directly to them by certain account holders.

The Statement of Additional Information contains more information about
revenue sharing and service payments made by the Manager or the Distributor.
Your dealer may charge you fees or commissions in addition to those disclosed in
this prospectus. You should ask your dealer or financial intermediary for
details about any such payments it receives from the Manager or the Distributor
and their affiliates, or any other fees or expenses it charges.

How Are Shares Redeemed? As with purchases, only the participating
insurance companies that hold Fund shares in their separate accounts for the
benefit of variable annuity contracts, variable life insurance policies or other
investment products can place orders to redeem shares. Contract holders and
policy holders should not directly contact the Fund or its transfer agent to
request a redemption of Fund shares. Contract owners should refer to the
withdrawal or surrender instructions in the accompanying prospectus of the
participating insurance company.

The share price that applies to a redemption order is the next net asset
value per share that is determined after the participating insurance company (as
the Fund's designated agent) receives a redemption request on a regular business
day from its contract or policy holder, provided that the Fund receives the
order from the insurance company, generally by 9:30 a.m. the next regular
business day at the office of its Transfer Agent in Colorado. The participating
insurance company must receive that order before the close of the NYSE (usually
4:00 p.m. Eastern time). The Fund normally sends payment by Federal Funds wire
to the insurance company's account on the next business day after the Fund
receives the order (and no later than seven days after the Fund's receipt of the
order). Under unusual circumstances determined by the Securities and Exchange
Commission, payment may be delayed or suspended.

Dividends, Capital Gains and Taxes

Dividends. The Fund intends to declare dividends separately for each class
of shares from net investment income on an annual basis. Dividends and
distributions will generally be lower for Service Shares, which normally have
higher expenses. The Fund has no fixed dividend rate and cannot guarantee that
it will pay any dividends.

Capital Gains. The Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains each year. The Fund may make supplemental distributions
of dividends and capital gains following the end of its fiscal year. There can
be no assurance that the Fund will pay any capital gains distributions in a
particular year.

Taxes. For a discussion of the tax status of a variable annuity contract, a
variable life insurance policy or other investment product of a participating
insurance company, please refer to the accompanying prospectus of your
participating insurance company. Because shares of the Fund may be purchased
only through insurance company separate accounts for variable annuity contracts,
variable life insurance policies or other investment products, dividends paid by
the Fund from net investment income and distributions (if any) of net realized
short-term and long-term capital gains will be taxable, if at all, to the
participating insurance company, although they may affect the tax basis of
certain types of distributions from those accounts.

This information is only a summary of certain federal income tax
information about an investment in Fund shares. You should consult with your tax
adviser or your participating insurance company representative about the effect
of an investment in the Fund under your contract or policy.

Financial Highlights

The Financial Highlights Table is presented to help you understand the
Fund's financial performance for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte & Touche LLP, the
Fund's independent registered public accounting firm, whose report, along with
the Fund's financial statements, is included in the Statement of Additional
Information, which is available upon request.

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 41.43 $ 38.52 $ 36.99 $ 34.70 $ 26.62
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 1 .07 1 .18 1 .35 1,2 .12
Net realized and unrealized gain 5.78 2.98 1.68 2.05 8.07
-----------------------------------------------------------------------------------------
Total from investment operations 5.85 3.05 1.86 2.40 8.19
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.10) (.14) (.33) (.11) (.11)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 47.18 $ 41.43 $ 38.52 $ 36.99 $ 34.70
=========================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 14.15% 7.95% 5.10% 6.93% 30.94%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,631,791 $ 1,598,967 $ 1,652,282 $ 1,770,273 $ 1,715,240
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,631,686 $ 1,615,352 $ 1,658,910 $ 1,708,511 $ 1,468,297
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.15% 0.17% 0.47% 0.99% 2 0.39%
Total expenses 0.65% 5,6,7 0.67% 5,6,7 0.66% 6 0.66% 6 0.67% 6
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 47% 70% 44% 48%

1. Per share amounts calculated based on the average shares outstanding
during the period.

2. Net investment income per share and the net investment income ratio
include $.16 and 0.43%, respectively, resulting from a special dividend from
Microsoft Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods less than one full year. Total return information does
not reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total return
figures for all periods shown. Returns do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as
follows:

Year Ended December 31, 2007 0.65%
Year Ended December 31, 2006 0.67%

6. Reduction to custodian expenses less than 0.005%.

7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.

FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------

SERVICE SHARES YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
------------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 41.09 $ 38.23 $ 36.73 $ 34.53 $ 26.53
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) 1 (.03) 1 .08 1 .29 1,2 .08
Net realized and unrealized gain 5.74 2.96 1.69 1.99 8.02
---------------------------------------------------------------------------------------
Total from investment operations 5.69 2.93 1.77 2.28 8.10
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income -- 3 (.07) (.27) (.08) (.10)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 46.78 $ 41.09 $ 38.23 $ 36.73 $ 34.53
=======================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 13.86% 7.68% 4.87% 6.62% 30.69%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 546,887 $ 463,140 $ 381,852 $ 248,649 $ 119,699
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 510,874 $ 426,539 $ 301,780 $ 184,273 $ 48,178
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) (0.10)% (0.08)% 0.20% 0.85% 2 0.14%
Total expenses 0.91% 6,7,8 0.92% 6,7,8 0.91% 7 0.91% 7 0.94% 7
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 47% 70% 44% 48%

1. Per share amounts calculated based on the average shares outstanding
during the period.

2. Net investment income per share and the net investment income ratio
include $.16 and 0.43%, respectively, resulting from a special dividend from
Microsoft Corp. in November 2004.

3. Less than $0.005 per share.

4. Assumes an investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods less than one full year. Total return information does
not reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total return
figures for all periods shown. Returns do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares.

5. Annualized for periods less than one full year.

6. Total expenses including indirect expenses from affiliated fund were as
follows:

Year Ended December 31, 2007 0.91%
Year Ended December 31, 2006 0.92%

7. Reduction to custodian expenses less than 0.005%.

8. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.

--------------------------------------------------------------------------------
INFORMATION AND SERVICES
--------------------------------------------------------------------------------

For More Information on Oppenheimer Capital Appreciation Fund/VA

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

The following additional information about the Fund is available without
charge upon request:

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

This document includes additional information about the Fund's investment
policies, risks, and operations. It is incorporated by reference into this
prospectus (which means it is legally part of this prospectus).

Annual and Semi-Annual Reports

Additional information about the Fund's investments and performance is
available in the Fund's Annual and Semi-Annual Reports to shareholders. The
Annual Report includes a discussion of market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year.

--------------------------------------------------------------------------------
How to Get More Information
--------------------------------------------------------------------------------

You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports and the notice explaining the Fund's privacy policy:

--------------------------------------------------------------------------------
By Telephone:
Call OppenheimerFunds Services toll-free: 1.800.981.2871

By Mail:
Write to:
OppenheimerFunds Services
P.O. Box 5270
--------------------------------------------------------------------------------
Denver, Colorado 80217-5270
--------------------------------------------------------------------------------

On the Internet:

You can request these documents by e-mail or through the OppenheimerFunds
website. You may also read or download certain documents on the OppenheimerFunds
website at: www.oppenheimerfunds.com.

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

Information about the Fund including the Statement of Additional
Information can be reviewed and copied at the Securities and Exchange
Commission's Public Reference Room in Washington, D.C. Information on the
operation of the Public Reference Room may be obtained by calling the Securities
and Exchange Commission at 1.202.551.8090. Reports and other information about
the Fund are available on the EDGAR database on the Securities and Exchange
Commission's Internet website at www.sec.gov. Copies may be obtained after
payment of a duplicating fee by electronic request at the Securities and
Exchange Commission's e-mail address: publicinfo@sec.gov or by writing to the
Securities and Exchange Commission's Public Reference Section, Washington, D.C.
20549-0102.

No one has been authorized to provide any information about the Fund or to
make any representations about the Fund other than what is contained in this
prospectus. This prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.

The Fund's SEC File No.: 811-4108 [logo] OppenheimerFunds
PR0610.001.0408 Distributor, Inc.
Printed on recycled paper

Appendix to Prospectus of

Oppenheimer Capital Appreciation Fund/VA
(a series of Oppenheimer Variable Account Funds)

Graphic material included in the prospectus of Oppenheimer Capital
Appreciation Fund/VA (the "Fund") under the heading "Annual Total Return (as of
December 31 each year)":

A bar chart will be included in the prospectus of the Fund depicting the
annual total returns of a hypothetical $10,000 investment in shares of the Fund
for each of the ten most recent calendar years, without deducting separate
account expenses. Set forth below are the relevant data that will appear on the
bar chart:

Calendar Year Ended Annual Total Returns

12/31/98 24.00%
12/31/99 41.66%
12/31/00 -0.23%
12/31/01 -12.58%
12/31/02 -26.86%
12/31/03 30.94%
12/31/04 6.93%
12/31/05 5.10%
12/31/06 7.95%
12/31/07 14.15%

Oppenheimer
Core Bond Fund/VA
A series of Oppenheimer Variable Account Funds

Prospectus dated April 29, 2008

Oppenheimer Core Bond Fund/VA is a mutual fund that seeks a high level of
current income as its primary goal. As a secondary goal, the Fund seeks capital
appreciation when consistent with its goal of high current income. The Fund
invests mainly in investment grade debt securities. Shares of the Fund are sold
only as the underlying investment for variable life insurance policies, variable
annuity contracts and other insurance company separate accounts. A prospectus
for the insurance product you have selected accompanies this prospectus and
explains how to select shares of the Fund as an investment under that insurance
product, and which share class you are eligible to purchase. This prospectus
contains important information about the Fund's objective, investment policies,
strategies and risks. Please read this prospectus (and your insurance product
prospectus) carefully before you invest and keep them for future reference about
your account.

(OppenheimerFunds Logo)

CONTENTS

ABOUT THE FUND

The Fund's Investment Objective and Principal Investment Strategies

Main Risks of Investing in the Fund

The Fund's Past Performance

Fees and Expenses of the Fund

About the Fund's Investments

How the Fund is Managed

INVESTING IN THE FUND

How to Buy and Sell Shares

Dividends, Capital Gains and Taxes

Financial Highlights

ABOUT THE FUND

The Fund's Investment Objective and Principal Investment Strategies

What Are the Fund's Investment Objectives? The Fund's main objective is to
seek a high level of current income. As a secondary objective, the Fund seeks
capital appreciation when consistent with its primary objective.

What Is A "Debt" Security? A debt security is essentially a loan by the
buyer to the issuer of the debt security. The issuer promises to pay back the
principal amount of the loan and normally pays interest, at a fixed or variable
rate, on the debt while it is outstanding.

What Does the Fund Mainly Invest In? As a non-fundamental policy (which
will not be changed without providing 60 days' notice to Fund shareholders),
under normal market conditions, the Fund invests at least 80% of its net assets
(plus borrowings for investment purposes) in investment grade bonds. The
investment-grade debt securities the Fund invests in can include the following
types of obligations, which in general are referred to as "bonds":

o short-, medium- and long-term foreign and U.S. government bonds and
notes,

o domestic and foreign corporate debt obligations,

o collateralized mortgage obligations (CMOs),

o other mortgage-related securities and asset-backed securities,

o participation interests in loans,

"structured" notes, and

o other debt obligations.

The Fund's investments in U.S. government securities include securities
issued or guaranteed by the U.S. government or its agencies or federally
chartered corporate entities referred to as "instrumentalities." These include
mortgage-related U.S. government securities and CMOs.

There are no other set percentage allocations of the Fund's assets among
the types of debt securities the Fund buys, but currently the Fund focuses
mainly on U.S. government securities, CMOs, and investment-grade debt securities
because they currently offer higher yields than money market instruments.
However, if market conditions change, the Fund's portfolio managers may change
the relative allocation of the Fund's assets.

The Fund's investments in debt securities can include "zero coupon"
securities and securities that have been "stripped" of their interest coupons.
The Fund can invest up to 20% of its total assets in high yield debt securities
and other debt securities that are below investment grade (commonly referred to
as "junk bonds") and other investments such as preferred stock.

The Fund can also use hedging instruments and certain derivative
investments, primarily CMOs and "structured" notes, to try to enhance income or
to try to manage investment risks. These investments are more fully explained in
"About the Fund's Investments," below.

The Fund seeks to maintain an average effective portfolio duration of three
to six years (measured on a dollar-weighted basis) to try to reduce the
volatility of the value of its securities portfolio. The Fund however has no
limitations on the range of maturities of the debt securities in which it can
invest and therefore may hold securities with short, medium or long-term
maturities. Because of market events and interest rate changes, the duration of
the portfolio might not meet that target at all times. The Fund will attempt to
maintain (on a dollar-weighted basis) an overall average portfolio credit
quality of "A-" or higher as rated by Moody's Investor Services, Inc. (or
equivalent rating of any nationally recognized credit rating organization).

How Do the Portfolio Managers Decide What Securities to Buy or Sell? In
selecting securities for the Fund, the Fund's portfolio managers analyze the
overall investment opportunities and risks in different sectors of the debt
security markets by focusing on business cycle analysis and relative values
between the corporate and government sectors. The portfolio managers' overall
strategy is to build a broadly diversified portfolio of debt securities. The
portfolio managers currently focus on the factors below (some of which may vary
in particular cases and may change over time), looking for:

o High current income from different types of corporate and government debt
securities,

o Investment-grade securities, primarily to help reduce credit risk,?

o Broad portfolio diversification to help reduce the volatility of the
Fund's share prices,

o Relative values among the debt securities market sectors.

The portfolio managers look for securities whose yield and price change are
expected to maximize the return to investors. The portfolio managers normally
will not invest in securities with higher yields if they expect the price to
decline to the point where total return (including income) would be lower than
the return on alternative fixed-income investments. Conversely, the portfolio
managers normally will not invest in securities they expect to appreciate in
price if that security's yield is so low that total return (including income)
will be lower than the return on alternative fixed-income investments. All else
being equal, the portfolio managers' preference is for investing for income over
price appreciation.

Who Is the Fund Designed For? The Fund's shares are available only as an
investment option under certain variable annuity contracts, variable life
insurance policies and investment plans offered through insurance company
separate accounts of participating insurance companies, for investors seeking
high current income from a fund that invests mainly in investment-grade debt
securities, but which can also hold below-investment-grade securities to seek
higher income. Those investors should be willing to assume the credit risks of a
fund that typically invests a significant amount of its assets in debt
securities and the changes in share prices that can occur when interest rates
rise. Since the Fund's income level will fluctuate, it is not designed for
investors needing an assured level of current income. The Fund is not a complete
investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments are
subject to changes in their value from a number of factors, described below.
There is also the risk that the value of your investment could be eroded over
time by the effects of inflation and that poor security selection by the Fund's
investment manager, OppenheimerFunds, Inc., (the "Manager"), will cause the Fund
to underperform other funds having similar objectives.

Credit Risk. Debt securities are subject to credit risk. Credit risk
is the risk that the issuer of a debt security

might not make interest and principal payments on the security as it
becomes due. A downgrade in an issuer's credit rating or other adverse news
about an issuer can reduce the value of that issuer's securities. Securities
directly issued by the U.S. Treasury and certain agencies that are backed by the
full faith and credit of the U.S. government have little credit risk, and
securities issued by other agencies of the U.S. government generally have low
credit risks. Securities issued by private issuers have greater credit risks. If
an issuer fails to pay interest, the Fund's income may be reduced. If an issuer
fails to repay principal, the value of that security and of the Fund's share
prices may be reduced.

o Special Risks of Lower-Grade Securities. Because the Fund can invest up
to 20% of its total assets in securities (including convertible securities)
below investment grade, the Fund's credit risks are greater than those of funds
that buy only investment- grade securities. Lower-grade debt securities may be
subject to greater market fluctuations and greater risks of loss of income and
principal than investment- grade debt securities. Securities that are (or that
have fallen) below investment grade are exposed to a greater risk that the
issuers of those securities might not meet their debt obligations. Those risks
can reduce the Fund's share prices and the income it earns. The market for
lower-grade securities may be less liquid, especially during times of economic
distress, and therefore they may be harder to value or to sell at an acceptable
price.

|X| Interest Rate Risks. The values of debt securities, including U.S.
government securities prior to maturity, are subject to change when prevailing
interest rates change. When interest rates fall, the values of already-issued
debt securities generally rise. When interest rates rise, the values of
already-issued debt securities generally fall, and they may sell at a discount
from their face amount. The magnitude of these fluctuations will often be
greater for longer-term debt securities than shorter-term debt securities.
However, interest rate changes may have different effects on the values of
mortgage-related securities because of prepayment risks, discussed below. The
Fund's share prices can go up or down when interest rates change because of the
effect of the changes on the value of the Fund's investments in debt securities.

|X| Prepayment Risk. Prepayment risk occurs when the mortgages underlying a
mortgage-related security are prepaid at a rate faster than anticipated (usually
when interest rates fall) and the issuer of a security can prepay the principal
prior to the security's maturity. Mortgage-related securities that are subject
to prepayment risk, including the CMOs and other mortgage-related securities
that the Fund buys, generally offer less potential for gains when prevailing
interest rates decline, and have greater potential for loss when interest rates
rise.

The impact of prepayments on the price of a security may be difficult to
predict and may increase the volatility of the price. Additionally, the Fund may
buy mortgage-related securities at a premium. Accelerated prepayments on those
securities could cause the Fund to lose the portion of its principal investment
represented by the premium the Fund paid.

If prepayments of mortgages underlying a CMO occur faster than expected
when interest rates fall, the market value and yield of the CMO could be
reduced. If interest rates rise rapidly, prepayments may occur at slower rates
than expected, which could have the effect of lengthening the expected maturity
of a short- or medium-term security. That could cause its value to fluctuate
more widely in response to changes in interest rates. In turn, this could cause
the value of the Fund's shares to fall more.

|X| Risks of Foreign Investing. The Fund can invest its assets without
limit in foreign debt securities and can buy securities of governments and
companies in both developed markets and emerging markets. While foreign
securities offer special investment opportunities, there are also special risks
that can reduce the Fund's share prices and returns.

The change in value of a foreign currency against the U.S. dollar will
result in a change in the U.S. dollar value of securities denominated in that
foreign currency. Currency rate changes can also affect the distributions the
Fund makes from the income it receives from foreign securities as foreign
currency values change against the U.S. dollar. Foreign investing can result in
higher transaction and operating costs for the Fund. Foreign issuers are not
subject to the same accounting and disclosure requirements that U.S. companies
are subject to.

The value of foreign investments may be affected by exchange control
regulations, expropriation or nationalization of a company's assets, foreign
taxes, delays in settlement of transactions, changes in governmental economic or
monetary policy in the U.S. or abroad, or other political and economic factors.
These risks could cause the prices of foreign securities to fall and therefore
could depress the Fund's share prices.

Additionally, if the Fund invests a significant amount of its assets in
foreign securities, it may be exposed to "time-zone arbitrage" attempts by
investors seeking to take advantage of the differences in value of foreign
securities that might result from events that occur after the close of the
foreign securities market on which a foreign security is traded and before the
close of the New York Stock Exchange (the "NYSE") that day, when the Fund's net
asset value is calculated. If such time-zone arbitrage were successful, it might
dilute the interests of other shareholders. However, the Fund's use of "fair
value pricing" to adjust the closing market prices of foreign securities under
certain circumstances, to reflect what the Manager and the Board believe to be
their fair value may help deter those activities.

Credit Default Swaps. The Fund may enter into credit default swaps.
A credit default swap enables an investor to buy or sell protection against a
credit event, such as an issuer's failure to make timely payments of interest or
principal, bankruptcy or restructuring. The terms of the instrument are
generally negotiated by the Fund and the swap counterparty.

If the Fund buys credit protection using a credit default swap, the Fund
will make fixed payments to the counterparty. If a credit event occurs, the Fund
will deliver the defaulted bonds underlying the swap and the swap counterparty
will pay the par amount of the bonds. If the Fund sells credit protection using
a credit default swap, the Fund will receive fixed payments from the
counterparty. If a credit event occurs, the Fund will pay the par amount of the
defaulted bonds underlying the swap and the swap counterparty will deliver the
bonds. If the swap is on a basket of securities, the notional amount of the swap
is reduced by the par amount of the defaulted bonds, and the fixed payments are
then made on the reduced notional amount.

Credit default swaps are subject to counterparty credit risk (if the
counterparty fails to meet its obligations). They are subject to the risk that
the Fund will not properly assess the cost of the instrument. If the Fund is
selling credit protection, there is a risk that a credit event will occur and
that the Fund will have to pay par value on defaulted bonds. If the Fund is
buying credit protection, there is a risk that no credit event will occur and
the Fund will receive no benefit for the premium paid.

|X| There are Special Risks in Using Derivative Investments. The Fund can
use derivatives to seek increased income or to try to hedge investment risks. In
general terms, a derivatives investment is an investment contract whose value
depends on (or is derived from) the value of an underlying asset, interest rate
or index. Options, futures, interest rate swaps, credit derivatives, structured
notes and CMOs are examples of derivatives the Fund can use.

If the issuer of the derivative does not pay the amount due, the Fund can
lose money on the investment. Also, the underlying security or investment on
which the derivative is based, and the derivative itself, might not perform the
way the Manager expected it to perform. If that happens, the Fund's share price
could decline or the Fund could get less income than expected. The Fund has
limits on the amount of particular types of derivatives it can hold. However,
using derivatives can cause the Fund to lose money on its investment and/or
increase the volatility of its share prices.

|X| How Risky is the Fund Overall? The risks described above collectively
form the risk profile of the Fund, and can affect the value of the Fund's
investments, its investment performance and its price per share. These risks
mean that you can lose money by investing in the Fund. When you redeem your
shares, they may be worth more or less than what you paid for them. There is no
assurance that the Fund will achieve its investment objective. Debt securities
are subject to credit and interest rate risks that can affect their values and
the share prices of the Fund. Prepayment risks of mortgage-backed securities can
cause the Fund to reinvest the proceeds of its investments in lower-yielding
securities. The Fund generally has more risks than bond funds that focus on U.S.
government securities, but the Fund's emphasis on investment-grade securities
may make its share prices less volatile than high yield bond funds or funds that
focus on foreign bonds.

An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in
the Fund, by showing changes in the Fund's performance for Non-Service Shares
from year to year for the last ten calendar years and by showing how the average
annual total returns of the Fund's shares compare to those of broad-based market
indices. Because the Fund's Service Shares are subject to a service fee, their
performance is expected to be lower for any given period. The Fund's past
investment performance is not necessarily an indication of how the Fund will
perform in the future.

Annual Total Returns (as of December 31 each year) [See appendix to
prospectus for data in bar chart showing annual total returns]

Charges imposed by the separate accounts that invest in the Fund are not
included in the calculations of return in this bar chart, and if those charges
were included, the returns would be less than those shown.

During the period shown in the bar chart, the highest return for a calendar
quarter was 4.04% (1st Qtr '01) and the lowest return for a calendar quarter was
-2.23% (2nd Qtr '04).

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

Average Annual Total Returns 1 Year 5 Years 10 Years
for the periods ended December 31, 2007 (or life of class, if
less)

Non-Service Shares (inception 4/3/85) 4.39% 4.90% 5.24%

Service Shares (inception 5/1/02) 4.09% 4.62% 5.49%

Citigroup Broad Investment Grade Bond Index 7.22% 4.55% 6.02%
5.42%(1)

6.97% 4.42% 5.97%
Lehman Brothers Aggregate Bond Index 5.32%(1)

Lehman Brothers Credit Index 5.11% 4.84% 6.05%
5.55%(1)

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

1. From 4/30/02

The Fund's average annual total returns in the table measure the
performance of a hypothetical account without deducting charges imposed by the
separate accounts that invest in the Fund and assume that all dividends and
capital gains distributions have been reinvested in additional shares. The
Fund's performance is compared to the Citigroup Broad Investment Grade Bond
Index, an index of investment grade corporate and U.S. government bonds; the
Lehman Brothers Aggregate Bond Index, a broad-based index of government agencies
and corporate debt, and the Lehman Brothers Credit Index, an index of
non-convertible U.S. investment grade corporate bonds. The indices' performance
includes reinvestment of income but does not reflect transaction costs, fees or
expenses. The Fund's investments vary from those in the indices.

The Fund's total returns should not be expected to be the same as the
returns of other Oppenheimer funds, even if both funds have the same portfolio
managers and/or similar names.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and
expenses you may pay if you buy and hold shares of the Fund. The Fund pays a
variety of expenses directly for management of its assets, administration,
distribution of its shares and other services. Those expenses are subtracted
from the Fund's assets to calculate the Fund's net asset values per share. All
shareholders therefore pay those expenses indirectly. The numbers below are
based on the Fund's expenses during its fiscal year ended December 31, 2007.

Shareholder Fees. The Fund does not charge an initial sales charge to buy
shares or to reinvest dividends. There are no redemption fees and no contingent
deferred sales charges. Please refer to the accompanying prospectus of the
participating insurance company for information on initial or contingent
deferred sales charges, exchange fees or redemption fees for that variable life
insurance policy, variable annuity or other investment product. Those charges
and fees are not reflected in either of the tables below.

Management Fees 0.64% 0.64%

Other Expenses 0.04% 0.03%

Total Annual Operating Expenses 0.68% 0.92%

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

The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
Oppenheimer Institutional Money Market Fund. During the fiscal year ended
December 31, 2007, the Manager waived $10,315 for Oppenheimer Institutional
Money Market Fund management fees. The Fund also receives certain credits from
the Fund's custodian that, during the fiscal year, reduced its custodial
expenses for both classes less than 0.01% of average daily net assets. After
these waivers/reductions, the actual "Other Expenses" and "Total Annual
Operating Expenses" were the same as shown above.

EXAMPLE. The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in shares of the Fund for the
time periods indicated and reinvest your dividends and distributions. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Separate account or contract expenses
are not included and if they were included, overall expenses would be higher.
Your actual costs may be higher or lower, because expenses will vary over time.
Based on these assumptions your expenses would be as follows, whether or not you
redeem your investment at the end of each period:

Non-Service Shares $70 $218 $380 $849

Service Shares $94 $295 $512 $1,136

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

About the Fund's Investments

The Fund's Principal Investment Policies and Risks. The allocation of the
Fund's portfolio among different types of investments will vary over time based
upon the Manager's evaluation of economic and market trends. The Fund's
portfolio might not always include all of the different types of investments
described below. The Statement of Additional Information contains more detailed
information about the Fund's investment policies and risks.

The Manager tries to reduce risks by carefully researching securities
before they are purchased, and in some cases by using hedging techniques. The
Fund attempts to reduce its exposure to credit risks by limiting its investments
in below-investment grade securities, as explained above. The Fund attempts to
reduce its exposure to market risks by diversifying its investments, that is, by
not holding a substantial percentage of the securities of any one issuer and by
not investing too great a percentage of the Fund's assets in any one issuer.
Also, the Fund does not concentrate 25% or more of its investments in the
securities of any one foreign government or in the debt and equity securities of
companies in any one industry.

The debt securities the Fund buys may be rated by nationally recognized
rating organizations or they may be unrated securities assigned an equivalent
rating by the Manager. While the Fund's investments may be above or below
investment grade in credit quality, the Fund invests primarily in
investment-grade debt securities. However, the Fund can invest up to 20% of its
net assets in below investment-grade debt securities, commonly called "junk
bonds." They typically offer higher yields than investment-grade bonds, because
investors assume the greater risks of default of those securities. The ratings
definitions of the principal national rating organizations are included in
Appendix A to the Statement of Additional Information.

Investment-grade debt securities are those rated in one of the four highest
categories by Standard & Poor's Corporation, Moody's Investors Service,
Inc., Fitch or other national rating organizations. They can also be
"split-rated" (rated as investment grade by one rating organization but below
investment grade by another) or unrated, if determined by the Manager to be of
comparable quality to rated investment-grade securities. The Fund is not
obligated to dispose of securities when issuers are in default or if the rating
of the security is reduced below investment grade.

The Fund can invest some of its assets in other types of securities,
including common stocks, preferred stocks, and other equity securities of
foreign and U.S. companies. However, the Fund does not anticipate having
significant investments in those types of securities as part of its normal
portfolio strategy.

The Fund could pursue its secondary objective of capital appreciation by
investing in securities convertible into common stock. Convertible securities
might allow the Fund to participate in the increase in value of the issuer's
underlying common stock, by exercising the conversion right. Normally the Fund
would not hold the common stock for investment, although it can hold common
stock as part of the value of its net assets that is not normally expected to be
invested in debt securities. Typically, convertible securities also pay
dividends until they are converted. There may be other investment strategies
that could offer the Fund opportunities for capital appreciation, such as
investing in defaulted securities, but these are not expected to be a
significant part of the Fund's investment program.

|X| U.S. Government Securities. The Fund can invest in securities issued or
guaranteed by the U.S. Treasury or other government agencies or
federally-chartered corporate entities referred to as "instrumentalities." These
are referred to as "U.S. government securities" in this prospectus.

|_| U.S. Treasury Obligations. These include Treasury bills (which have
maturities of one year or less when issued), Treasury notes (which have
maturities of from one to ten years when issued), and Treasury bonds (which have
maturities of more than ten years when issued). Treasury securities are backed
by the full faith and credit of the United States as to timely payments of
interest and repayments of principal. The Fund can also buy U.S. Treasury
securities that have been "stripped" of their coupons by a Federal Reserve Bank,
zero-coupon U.S. Treasury securities described below, and Treasury
Inflation-Protection Securities ("TIPS|_| ").

|_| Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and mortgage-related
securities that have different levels of credit support from the U.S.
government. Some are supported by the full faith and credit of the U.S.
government, such as Government National Mortgage Association pass-through
mortgage certificates (called "Ginnie Maes"). Some are supported by the right of
the issuer to borrow from the U.S. Treasury under certain circumstances, such as
Federal National Mortgage Association bonds ("Fannie Maes") and Federal Home
Loan Mortgage Corporation obligations ("Freddie Macs|_| ").

|_| Mortgage-Related U.S. Government Securities. The Fund can buy interests
in pools of residential or commercial mortgages, in the form of CMOs and other
"pass-through" mortgage securities. CMOs that are U.S. government securities
have collateral to secure payment of interest and principal on underlying
assets. They may be issued in different series each having different interest
rates and maturities. The collateral is either in the form of mortgage
pass-through certificates issued or guaranteed by a U.S. agency or
instrumentality or mortgage loans insured by a U.S. government agency. The Fund
can have substantial amounts of its assets invested in mortgage-related U.S.
government securities.

The prices and yields of CMOs are determined, in part, by assumptions about
the cash flows from the rate of payments of the underlying mortgages. Changes in
interest rates may cause the rate of expected prepayments of those mortgages to
change. In general, prepayments increase when general interest rates fall and
decrease when interest rates rise.

If prepayments of mortgages underlying a CMO occur faster than expected
when interest rates fall, the market value and yield of the CMO could be
reduced. Additionally, the Fund may have to reinvest the prepayment proceeds in
other securities paying interest at lower rates, which could reduce the Fund's
yield.

When interest rates rise rapidly, and if prepayments occur more slowly than
expected, a short or medium-term CMO can in effect become a long-term security,
subject to greater fluctuations in value. These prepayment risks can make the
prices of CMOs very volatile when interest rates change. The prices of
longer-term debt securities tend to fluctuate more than those of shorter-term
debt securities. That volatility will affect the Fund's share prices.

|X| The Fund's Portfolio "Duration" Strategy. The "maturity" of a security
(the date when its principal repayment is due) differs from effective duration,
which attempts to measure the expected volatility of a security's price.

The Fund measures the duration of its entire portfolio of securities on a
dollar-weighted basis, to try to maintain an average effective duration of its
portfolio of three to six years under normal market conditions (that is, when
financial markets are not in an unstable or volatile state). However, duration
cannot be relied on as an exact prediction of future volatility. There can be no
assurance that the Fund will achieve its targeted portfolio duration at all
times.

Duration calculations rely on a number of assumptions and variables based
on the historic performance of similar securities. Therefore, duration can be
affected by unexpected economic events or conditions relating to a particular
security. In the case of CMOs, duration calculations are based on historic rates
of prepayments of underlying mortgages. If the mortgages underlying the Fund's
investments are prepaid more rapidly or more slowly than expected, the duration
calculation for that security may not be correct.

|X| Forward Rolls. The Fund may enter into "forward roll" (also referred to
as "mortgage dollar rolls") transactions with respect to mortgage-related
securities. In this type of transaction, the Fund sells a mortgage-related
security to a buyer and simultaneously agrees to repurchase a similar security
at a later date at a set price.

During the period between the sale and the purchase, the Fund will not be
entitled to receive interest and principal payments on the securities that have
been sold. It is possible that the market value of the securities the Fund sells
may decline below the price at which the Fund is obligated to repurchase
securities, or that the counterparty might default in its obligation.

|X| High-Yield, Lower-Grade Debt Securities. The Fund can purchase a
variety of lower-grade, high-yield debt securities of U.S. and foreign issuers,
including bonds, debentures, notes, preferred stocks, loan participation
interests, structured notes, asset-backed securities, among others, to seek high
current income. These securities are sometimes called "junk bonds." The Fund has
no requirements as to the maturity of the debt securities it can buy, or as to
the market capitalization range of the issuers of those securities. Up to 20% of
the Fund's total assets can be invested in debt securities below investment
grade under normal market conditions.

Lower-grade debt securities are those rated below "Baa" by Moody's
Investors Service, Inc. or lower than "BBB" by Standard & Poor's Rating
Service or that have similar ratings by other nationally-recognized rating
organizations. The Fund can invest in securities rated as low as "C" or "D", in
unrated bonds or bonds which are in default at the time the Fund buys them.
While securities rated "Baa" by Moody's or "BBB" by S&P are considered
"investment grade," they have some speculative characteristics.

The Manager does not rely solely on ratings issued by rating organizations
when selecting investments for the Fund. The Fund can buy unrated securities
that offer high current income. The Manager may assign a rating to an unrated
security that is equivalent to the rating of a rated security that the Manager
believes offers comparable yields and risks.

While investment-grade securities are subject to risks of non-payment of
interest and principal, in general higher-yielding lower-grade bonds, whether
rated or unrated, have greater risks than investment-grade securities. They may
be subject to greater market fluctuations and risk of loss of income and
principal than investment-grade securities. There may be less of a market for
them and therefore they may be harder to value and to sell at an acceptable
price. There is a relatively greater possibility that the issuer's earnings may
be insufficient to make the payments of interest and principal due on the bonds.
These risks mean that the Fund may not achieve the expected income from
lower-grade securities, and that the Fund's net asset value per share may be
affected by declines in value of these securities.

|X| Private-Issuer Mortgage-Backed Securities. The Fund can invest a
substantial portion of its assets in mortgage-backed securities issued by
private issuers, which do not offer the credit backing of U.S. government
securities. Primarily these include multi-class debt or pass-through
certificates secured by mortgage loans. They may be issued by banks, savings and
loans, mortgage bankers and other non-governmental issuers. Private issuer
mortgage-backed securities are subject to the credit risks of the issuers (as
well as the interest rate risks and prepayment risks of CMOs that are U.S.
government securities, discussed above); although in some cases they may be
supported by insurance or guarantees.

|X| Asset-Backed Securities. The Fund can buy asset-backed securities,
which are fractional interests in pools of loans collateralized by the loans or
other assets or receivables. They are issued by trusts and special purpose
corporations that pass the income from the underlying pool to the buyer of the
interest. These securities are subject to the risk of default by the issuer as
well as by the borrowers of the underlying loans in the pool.

|X| Foreign Debt Securities. The Fund can buy debt securities issued by
foreign governments and companies, as well as "supra-national" entities, such as
the World Bank. They can include bonds, debentures, and notes, including
derivative investments called "structured" notes, described below. The Fund will
not invest 25% or more of its total assets in debt securities of any one foreign
government or in debt securities of companies in any one industry. The Fund has
no requirements as to the maturity range of the foreign debt securities it can
buy, or as to the market capitalization range of the issuers of those
securities.

Foreign government debt securities might not be supported by the full faith
and credit of the issuing government. The Fund's foreign debt investments can be
denominated in U.S. dollars or in foreign currencies. The Fund will buy foreign
currency only in connection with the purchase and sale of foreign securities and
not for speculation.

|X| Special Risks of Emerging and Developing Markets. Securities of issuers
in emerging and developing markets may offer special investment opportunities
but present risks not found in more mature markets. Those securities may be more
difficult to value and to sell at an acceptable price and their prices may be
more volatile than securities of issuers in more developed markets. Settlements
of trades may be subject to greater delays so that the Fund may not receive the
proceeds of a sale of a security on a timely basis. These investments may be
very speculative.

These countries might have less developed trading markets and exchanges.
Emerging market countries may have less developed legal and accounting systems
and investments may be subject to greater risks of government restrictions on
withdrawing the sales proceeds of securities from the country. Economies of
developing countries may be more dependent on relatively few industries that may
be highly vulnerable to local and global changes. Governments may be more
unstable and present greater risks of nationalization or restrictions on foreign
ownership of stocks of local companies.

The Fund can buy "Brady Bonds," which are U.S.-dollar denominated debt
securities collateralized by zero-coupon U.S. Treasury securities. They are
typically issued by emerging markets countries and are considered speculative
securities with higher risks of default.

Special Portfolio Diversification Requirements. To enable a variable
annuity or variable life insurance contract based on an insurance company
separate account to qualify for favorable tax treatment under the Internal
Revenue Code, the underlying investments must follow special diversification
requirements that limit the percentage of assets that can be invested in
securities of particular issuers. The Fund's investment program is managed to
meet those requirements, in addition to other diversification requirements under
the Internal Revenue Code and the Investment Company Act that apply to
publicly-sold mutual funds.

Failure by the Fund to meet those special requirements could cause earnings
on a contract owner's interest in an insurance company separate account to be
taxable income. Those diversification requirements might also limit, to some
degree, the Fund's investment decisions in a way that could reduce its
performance.

Can the Fund's Investment Objective and Policies Change? The Fund's Board
of Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to this
prospectus. Shareholders will receive 60 days advance notice of any change in
the 80% requirement (a non-fundamental policy) described under "What Does The
Fund Mainly Invest In?" Fundamental policies are those that cannot be changed
without the approval of a majority of the Fund's outstanding voting shares. The
Fund's investment objectives are fundamental policies. Investment restrictions
that are fundamental policies are listed in the Statement of Additional
Information. An investment policy is not fundamental unless this prospectus or
the Statement of Additional Information says that it is.

|X| Portfolio Turnover. The Fund may engage in active and frequent trading
to try to achieve its objective. It might have a turnover rate in excess of 100%
annually. Increased portfolio turnover creates higher brokerage and transaction
costs for the Fund (and may reduce performance). For a contract owner, any
increase in realized gains will generally not be taxable directly but may affect
the owner's tax basis in the account. The Financial Highlights table at the end
of this prospectus shows the Fund's portfolio turnover rates during prior fiscal
years.

Other Investment Strategies. To seek its objective, the Fund can also use
the investment techniques and strategies described below. The Fund might not
always use all of them. These techniques involve risks, although some are
designed to help reduce overall investment or market risks.

|X| Zero-Coupon and "Stripped" Securities. Some of the government and
corporate debt securities the Fund buys are zero-coupon bonds that pay no
interest. They are issued at a substantial discount from their face value.
"Stripped" securities are the separate income or principal components of a debt
security. Some CMOs or other mortgage-related securities may be stripped, with
each component having a different proportion of principal or interest payments.
One class might receive all the interest and the other all the principal
payments.

The values of interest-only mortgage-related securities are also very
sensitive to prepayments of underlying mortgages. Principal-only securities are
also sensitive to changes in interest rates. When prepayments tend to fall, the
timing of the cash flows to these securities increases, making them more
sensitive to changes in interest rates. The market for some of these securities
may be limited, making it difficult for the Fund to dispose of its holdings at
an acceptable price. The Fund can invest up to 50% of its total assets in
zero-coupon securities issued by either the U.S. Treasury or companies.

|X| Participation Interests in Loans. These securities represent an
undivided fractional interest in a loan obligation by a borrower. They are
typically purchased from banks or dealers that have made the loan or are members
of the loan syndicate. The loans may be to foreign or U.S. companies. The Fund
does not invest more than 5% of its net assets in participation interests of any
one borrower. They are subject to the risk of default by the borrower. If the
borrower fails to pay interest or repay principal, the Fund can lose money on
its investment.

|X| Illiquid and Restricted Securities. Investments may be illiquid because
they do not have an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. Restricted securities may have
terms that limit their resale to other investors or may require registration
under applicable securities laws before they may be sold publicly. The Fund will
not invest more than 15% of its net assets in illiquid or restricted securities.
Certain restricted securities that are eligible for resale to qualified
institutional purchasers may not be subject to that limit. The Manager monitors
holdings of illiquid securities on an ongoing basis to determine whether to sell
any holdings to maintain adequate liquidity.

|X| Derivative Investments. The Fund can invest in a number of different
kinds of "derivative" investments. In the broadest sense, exchange-traded
options, futures contracts, structured notes, CMOs and other hedging instruments
the Fund can use may be considered "derivative investments." In addition to
using hedging instruments, the Fund can use other derivative investments because
they offer the potential for increased income.

Markets underlying securities and indices may move in a direction not
anticipated by the Manager. Interest rate and stock market changes in the U.S.
and abroad may also influence the performance of derivatives. As a result of
these risks the Fund could realize less principal or income from the investment
than expected. Certain derivative investments held by the Fund may be illiquid.

"Structured" Notes. The Fund can buy "structured" notes, which are
specially-designed derivative debt investments. Their principal payments or
interest are linked to the value of an index (such as a currency or securities
index) or commodity. The terms of the instrument may be "structured" by the
purchaser (the Fund) and the borrower issuing the note.

The principal and/or interest payments depend on the performance of one or
more other securities or indices, and the values of these notes will therefore
fall or rise in response to the changes in the values of the underlying security
or index. They are subject to both credit and interest rate risks and therefore
the Fund could receive more or less than it originally invested when the notes
mature, or it might receive less interest than the stated coupon payment if the
underlying investment or index does not perform as anticipated. Their values may
be very volatile and they may have a limited trading market, making it difficult
for the Fund to sell its investment at an acceptable price.

|X| Hedging. The Fund can buy and sell certain futures contracts, put and
call options, including options on futures and broadly-based securities indices
and forward contracts. These investments are all referred to as "hedging
instruments." The Fund does not currently use hedging extensively and is not
required to use hedging instruments to seek its objective.

The Fund could buy and sell options, futures, forward contracts, and swaps
for a number of purposes. It might do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or to
establish a position in the securities market as a temporary substitute for
purchasing individual securities. Forward contracts can be used to try to manage
foreign currency risks on the Fund's foreign investments. Foreign currency
options can be used to try to protect against declines in the dollar value of
foreign securities the Fund owns, or to protect against an increase in the
dollar cost of buying foreign securities.

There are special risks in particular hedging strategies. For example,
options trading involves the payment of premiums and can increase portfolio
turnover. If an investment that is subject to a covered call written by the Fund
increases in value above the call price, the Fund may be required to sell the
investment at the call price and may not be able to realize any gain above that
price. In writing a put, there is a risk that the Fund may be required to buy
the underlying security at a disadvantageous price. If the Manager uses a
hedging instrument at the wrong time or judges market conditions incorrectly,
the hedge might fail and the strategy could reduce the Fund's return. The Fund
could also experience losses if the prices of its futures and options positions
were not correlated with its other investments or if it could not close out a
position because of an illiquid market.

|X| Loans of Portfolio Securities. The Fund may make loans of its portfolio
securities, with a value not to exceed 25% of its net assets, in accordance with
policies approved by the Fund's Board. The Fund has entered into a securities
lending agreement with JPMorgan Chase Bank, N.A. ("JPMorgan Chase") for that
purpose. Under the agreement, the Fund's portfolio securities may be loaned to
brokers, dealers and financial institutions, provided that such loans comply
with the collateralization and other requirements of the securities lending
agreement, the Fund's policies and applicable government regulations. JPMorgan
Chase has agreed, in general, to bear the risk that a borrower may default on
its obligation to return loaned securities. However, the Fund will be
responsible for risks associated with the investment of cash collateral,
including the risk of a default by the issuer of a security in which cash
collateral has been invested. If that occurs, the Fund may incur additional
costs in seeking to obtain the collateral or may lose the amount of the
collateral investment. The Fund may also lose money if the value of the
investments purchased with cash collateral decreases.

Investments in Oppenheimer Institutional Money Market Fund. The Fund
can invest its free cash balances in Class E shares of Oppenheimer Institutional
Money Market Fund, to provide liquidity or for defensive purposes. The Fund
invests in Oppenheimer Institutional Money Market Fund rather than purchasing
individual short-term investments to try to seek a higher yield than it could
obtain on its own. Oppenheimer Institutional Money Market Fund is a registered
open-end management investment company, regulated as a money market fund under
the Investment Company Act of 1940, as amended, and is part of the Oppenheimer
Family of Funds. It invests in a variety of short-term, high-quality,
dollar-denominated money market instruments issued by the U.S. government,
domestic and foreign corporations, other financial institutions, and other
entities. Those investments may have a higher rate of return than the
investments that would be available to the Fund directly. At the time of an
investment, the Manager cannot always predict what the yield of the Oppenheimer
Institutional Money Market Fund will be because of the wide variety of
instruments that fund holds in its portfolio. The return on those investments
may, in some cases, be lower than the return that would have been derived from
other types of investments that would provide liquidity. As a shareholder, the
Fund will be subject to its proportional share of the expenses of Oppenheimer
Institutional Money Market Fund's Class E shares, including its advisory fee.
However, the Manager will waive a portion of the Fund's advisory fee to the
extent of the Fund's share of the advisory fee paid to the Manager by
Oppenheimer Institutional Money Market Fund.

|X| Temporary Defensive and Interim Investments. For temporary defensive
purposes in times of adverse or unstable market, economic or political
conditions, the Fund can invest up to 100% of its assets in investments that may
be inconsistent with the Fund's principal investment strategies. Generally the
Fund would invest in shares of Oppenheimer Institutional Money Market Fund or in
the types of money market instruments described above or in other short-term
U.S. government securities. The Fund might also hold these types of securities
as interim investments pending the investment of proceeds from the sale of Fund
shares or the sale of Fund portfolio securities or to meet anticipated
redemptions of Fund shares. To the extent the Fund invests in these securities,
it might not achieve its investment objective.

PORTFOLIO HOLDINGS. The Fund's portfolio holdings are included in
semi-annual and annual reports that are distributed to shareholders of the Fund
within 60 days after the close of the period for which such report is being
made. The Fund also discloses its portfolio holdings in its Statements of
Investments on Form N-Q, which are filed with the Securities and Exchange
Commission no later than 60 days after the close of its first and third fiscal
quarters. These required filings are publicly available at the Securities and
Exchange Commission. Therefore, portfolio holdings of the Fund are made publicly
available no later than 60 days after the close of each of the Fund's fiscal
quarters.

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information.

How the Fund is Managed

The Manager. The Manager chooses the Fund's investments and handles its
day-to-day business. The Manager carries out its duties, subject to the policies
established by the Fund's Board of Trustees, under an investment advisory
agreement that states the Manager's responsibilities. The agreement sets the
fees the Fund pays to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.

The Manager has been an investment adviser since 1960. The Manager and its
subsidiaries and controlled affiliates managed more than $240 billion in assets
as of March 31, 2008, including other Oppenheimer funds with more than 6 million
shareholder accounts. The Manager is located at Two World Financial Center, 225
Liberty Street, 11th Floor, New York, New York 10281-1008.

|X| Advisory Fees. Effective May 1, 2007, under the investment advisory
agreement, the Fund pays the Manager an advisory fee at an annual rate that
declines on additional assets as the Fund grows: at an annual rate of 0.60% on
the first $1 billion of the Fund's daily net assets, and 0.50% of daily net
assets over $1 billion. Prior to May 1, 2007, the Fund's annual advisory fee
rate was: 0.75% of the first $200 million of net assets; 0.72% of the next $200
million; 0.69% of the next $200 million; 0.66% of the next $200 million; 0.60%
of the next $200 million; and 0.50% of the net assets over $1 billion. The
Fund's management fee for its fiscal year ended December 31, 2007 was 0.64% of
the Fund's average annual net assets for each class of shares.

A discussion regarding the basis for the Board of Trustees' approval of the
Fund's investment advisory contract is available in the Fund's Annual Report to
shareholders for the year ended December 31, 2007.

|X| Portfolio Managers. The Fund's portfolio is managed by a team of
investment professionals including Angelo Manioudakis, Benjamin J. Gord,
Geoffrey Caan, Thomas Swaney and Antulio Bomfim who are primarily responsible
for the day-to-day management of the Fund's investments.

Mr. Manioudakis has been a Vice President and portfolio manager of the Fund
since April 2002, and a Senior Vice President of the Manager and of HarbourView
Asset Management Corporation since April 2002. He has been a Senior Vice
President of OFI Institutional Asset Management, Inc. since June 2002. He is
also a portfolio manager and officer of other portfolios in the OppenheimerFunds
complex. Mr. Manioudakis was Executive Director and portfolio manager for
Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment
Management from August 1993 through April 2002.

Mr. Gord has been a Vice President and portfolio manager of the Fund and a
Vice President of the Manager since April 2002. He is also a portfolio manager
of other portfolios in the OppenheimerFunds complex. Mr. Gord was an Executive
Director and a senior fixed income analyst at Miller Anderson & Sherrerd, a
division of Morgan Stanley Investment Management from April 1992 through March
2002.

Mr. Caan has been a Vice President and portfolio manager of the Fund and a
Vice President of the Manager since August 2003. He is also a portfolio manager
of other portfolios in the OppenheimerFunds complex. Mr. Caan was a Vice
President of ABN AMRO N.A., Inc. from June 2002 through August 2003, and a Vice
President of Zurich Scudder Investments from January 1999 through June 2002.

Mr. Swaney has been a portfolio manager of the Fund and a Vice President of
the Manager since April 2006 and a Vice President of the Fund since April 2006.
He is also a portfolio manager of other portfolios in the OppenheimerFunds
complex. Mr. Swaney was a senior analyst of the Manager's High Grade Investment
Team from June 2002 to March 2006. Prior to joining the Manager in June 2002,
Mr. Swaney was a senior fixed income analyst at Miller, Anderson & Sherrerd,
a division of Morgan Stanley Investment Management from May 1998 through May
2002.

Mr. Bomfim has been a Vice President and portfolio manager of the Fund and
a Vice President of the Manager since October 2003. He is also a portfolio
manager of other portfolios in the OppenheimerFunds complex. Mr. Bomfim was a
Senior Economist at the Board of Governors of the Federal Reserve System from
June 1992 to October 2003.

The Statement of Additional Information provides additional information
about the Portfolio Managers' compensation, other accounts they manage and their
ownership of the Fund shares.

|X| Possible Conflicts of Interest. The investment activities of the
Manager and its affiliates in regard to other accounts they manage may present
conflicts of interest that could disadvantage the Fund and its shareholders. The
Manager or its affiliates may provide investment advisory services to other
funds and accounts that have investment objectives or strategies that differ
from, or are contrary to, those of the Fund. That may result in another such
fund or account holding investment positions that are adverse to the Fund's
investment strategies or activities. For example, the Fund may take a long
position in a security at the same time that another fund or account advised by
the Manager takes a short position in the same security.

Other funds or accounts advised by the Manager or its affiliates may have
conflicting interests arising from investment objectives that are similar to
those of the Fund. Those funds and accounts may engage in, and compete for,
transactions in the same types of securities or other investments as the Fund.
At other times, there may be conflicts of interest with other funds or accounts
that invest in one of the same issuers that the Fund invests in. For example,
the Fund may invest in an issuer's equity or debt securities that are
subordinate to other securities of that issuer held by another fund or account
the Manager advises.

The Manager and its affiliates are not obligated to make available to the
Fund's investment personnel any information regarding the strategies or
investment activities of other funds or accounts that the Manager and its
affiliates advise. The trading and other investment activities of those other
funds or accounts are carried out without regard to the investment activities of
the Fund and, as a result, the value of securities held by the Fund or the
Fund's investment strategies may be adversely affected. The Fund's investment
performance will usually differ from the performance of other accounts advised
by the Manager or its affiliates and the Fund may experience losses during
periods in which other accounts advised by the Manager or its affiliates achieve
significant gains.

The Fund offers its shares to separate accounts of different insurance
companies, as an investment for their variable annuity, variable life and other
investment product contracts. While the Fund does not foresee any disadvantages
to contract owners from these arrangements, it is possible that the interests of
owners of different contracts participating in the Fund through different
separate accounts might conflict. For example, a conflict could arise because of
differences in tax treatment.

The Fund's Board of Trustees has procedures to monitor the portfolio for
possible conflicts to determine what action should be taken. Such policies and
procedures may also limit the Fund's investment activities and affect its
performance. If a conflict occurs, the Board might require one or more
participating insurance company separate accounts to withdraw their investments
in the Fund. That could force the Fund to sell securities at disadvantageous
prices, and orderly portfolio management could be disrupted. Also, the Board
might refuse to sell shares of the Fund to a particular separate account, or
could terminate the offering of the Fund's shares if required to do so by law or
if it would be in the best interests of the shareholders of the Fund to do so.

INVESTING IN THE FUND

How to Buy and Sell Shares

How Are Shares Purchased? Shares of the Fund may be purchased only by
separate investment accounts of participating insurance companies as an
underlying investment for variable life insurance policies, variable annuity
contracts or other investment products. Individual investors cannot buy shares
of the Fund directly. Please refer to the accompanying prospectus of the
participating insurance company for information on how to select the Fund as an
investment option for that variable life insurance policy, variable annuity or
other investment product. That prospectus will indicate whether you are eligible
to purchase Service Shares of the Fund. The Fund reserves the right to refuse
any purchase order when the Manager believes it would be in the Fund's best
interests to do so.

ARE THERE LIMITATIONS ON FREQUENT PURCHASES AND REDEMPTIONS?

Risks from Excessive Purchase and Redemption Activity. Frequent purchases
and redemptions of Fund shares may interfere with the Manager's ability to
manage the Fund's investments, may increase the Fund's transaction and
administrative costs and/or may affect the Fund's performance. For example, if
large dollar amounts were involved in redemption transactions, the Fund might be
required to sell portfolio securities at unfavorable times to meet such
redemption requests, and the Fund's transaction or administrative expenses might
be increased. The extent to which the Fund might be affected by such trading
activity would depend on various factors, such as the current asset size of the
Fund, the nature of its investments, the amount of Fund assets the portfolio
managers maintain in cash or cash equivalents, and the aggregate dollar amount,
number and frequency of the share trades.