-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XZdkhy8wKgo3tHjk7Gcsoqchy2rMqCNKt8Lu/9HzBIPavKtGuMh4paHP4csaXH86 Xo9FqyqR4027hDLagPL/UQ== 0000752737-95-000011.txt : 19950502 0000752737-95-000011.hdr.sgml : 19950502 ACCESSION NUMBER: 0000752737-95-000011 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950501 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840974272 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 002-93177 FILM NUMBER: 95533379 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER VARIABLE LIFE FUNDS DATE OF NAME CHANGE: 19860609 497 1 OPPENHEIMER VARIABLE ACCOUNT FUNDS Prospectus dated May 1, 1995 OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is a diversified open- end investment company consisting of nine separate funds (collectively, the "Funds"): OPPENHEIMER MONEY FUND ("Money Fund") seeks the maximum current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. Its shares are neither insured nor guaranteed by the U.S. government, and there is no assurance that this Fund will be able to maintain a stable net asset value of $1.00 per share. OPPENHEIMER HIGH INCOME FUND ("High Income Fund") seeks a high level of current income from investment in high yield fixed-income securities. High Income Fund's investments include unrated securities or high risk securities in the lower rating categories, commonly known as "junk bonds," which are subject to a greater risk of loss of principal and nonpayment of interest than higher-rated securities. These securities may be considered to be speculative. OPPENHEIMER BOND FUND ("Bond Fund") primarily seeks a high level of current income from investment in high yield fixed-income securities rated "Baa" or better by Moody's or "BBB" or better by Standard & Poor's. Secondarily, this Fund seeks capital growth when consistent with its primary objective. OPPENHEIMER CAPITAL APPRECIATION FUND ("Capital Appreciation Fund") seeks to achieve capital appreciation by investing in "growth-type" companies. OPPENHEIMER GROWTH FUND ("Growth Fund") seeks to achieve capital appreciation by investing in securities of well-known established companies. OPPENHEIMER MULTIPLE STRATEGIES FUND ("Multiple Strategies Fund") seeks a total investment return (which includes current income and capital appreciation in the value of its shares) from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. OPPENHEIMER GROWTH & INCOME FUND ("Growth & Income Fund") seeks a high total return (which includes growth in the value of its shares as well as current income) from equity and debt securities. From time to time this Fund may focus on small to medium capitalization common stocks, bonds and convertible securities. OPPENHEIMER GLOBAL SECURITIES FUND ("Global Securities Fund") seeks long- term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations which are considered to have appreciation possibilities. Current income is not an objective. These securities may be considered to be speculative. OPPENHEIMER STRATEGIC BOND FUND ("Strategic Bond Fund") seeks a high level of current income principally derived from interest on debt securities and seeks to enhance such income by writing covered call options on debt securities. The Fund intends to invest principally in: (i) foreign government and corporate debt securities, (ii) U.S. Government securities, and (iii) lower-rated high yield domestic debt securities, commonly known as "junk bonds", which are subject to a greater risk of loss of principal and nonpayment of interest than higher-rated securities. These securities may be considered to be speculative. Shares of the Funds are sold only to provide benefits under variable life insurance policies and variable annuity contracts (collectively, the "Accounts"). The Accounts invest in shares of one or more of the Funds in accordance with allocation instructions received from Account owners. Such allocation rights are further described in the accompanying Account Prospectus. Shares are redeemed to the extent necessary to provide benefits under an Account. This Prospectus explains concisely what you should know before investing in the Trust and the Funds. Please read this Prospectus carefully and keep it for future reference. You can find more detailed information about the Funds in the May 1, 1995 Statement of Additional Information. For a free copy, call Oppenheimer Shareholder Services, the Funds' Transfer Agent, at 1-800-525-7048, or write to the Transfer Agent at the address on the back cover. The Statement of Additional Information has been filed with the Securities and Exchange Commission and is incorporated into this Prospectus by reference (which means that it is legally part of this Prospectus). THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Contents About the Funds Overview of the Funds Financial Highlights Investment Objectives and Policies How the Funds are Managed Performance of the Funds About Your Account How to Buy Shares How to Sell Shares Dividends, Capital Gains and Taxes Appendix A: Description of Terms Appendix B: Description of Securities Ratings ABOUT THE FUNDS Overview of the Funds Some of the important facts about the Funds are summarized below, with references to the section of this Prospectus where more complete information can be found. You should carefully read the entire Prospectus before making a decision about investing. Keep the Prospectus for reference after you invest. - What Are the Funds' Investment Objectives? The Money Fund's investment objective is to seek current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. The High Income Fund's investment objective is to seek a high level of current income from investment in high yield fixed-income securities. The Bond Fund's investment objective is to seek a high level of current income from investment in high yield fixed-income securities rate "baa" or better by Moody's or "BBB" or better by Standard & Poor's. As a secondary investment objective, the Bond Fund seeks capital growth when consistent with its primary objective. Capital Appreciation Fund's investment objective is to achieve capital appreciation by investing in "growth-type" companies. The Growth Fund's investment objective is to seek to achieve capital appreciation by investing in securities of well- known established companies. The Multiple Strategies Fund's investment objective is to seek a total investment return (which includes current income and capital appreciation in the value of its shares) from investment in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. The Growth & Income Fund's investment objective is to seek a total return (which includes growth in the value of its shares) as well as current income from equity and debt securities. The Global Securities Fund's investment objective is to seek long-term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations which are considered to have appreciation possibilities. The Strategic Bond Fund's investment objective is to seek a high level of current income principally derived from interest on debt securities and seeks to enhance such income by writing covered call options on debt securities. - What Do the Funds Invest In? To seek their respective investment objectives, the Funds invest as follows. Money Fund primarily invests in money market securities. High Income Fund primarily invests in high yield fixed-income securities, including unrated securities or high risk securities in the lower rating categories, commonly known as "junk bonds." Bond Fund primarily invests in high yield fixed-income securities rated "Baa" or better by Moody's or "BBB" or better by Standard & Poor's. Capital Appreciation Fund primarily invests in "growth-type" companies. Growth Fund primarily invests in securities of well-known established companies. Multiple Strategies Fund primarily invests in common stocks and other equity securities, bonds and other debt securities, and money market securities. Growth & Income Fund is a new fund that will primarily invest in equity and debt securities and focus from time to time on small to medium capitalization companies. Global Securities Fund primarily invests in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations. Strategic Bond Fund primarily invests in foreign government and corporate debt securities, U.S. Government securities, and lower-rated high yield domestic and foreign debt securities, commonly know as "junk bonds." These investments are more fully explained for each Fund in "Investment Objectives and Policies," starting on page ___. - Who Manages the Funds? The Funds' investment adviser is Oppenheimer Management Corporation, which (including a subsidiary) advises investment company portfolios having over $29 billion in assets. Each Fund's portfolio manager is primarily responsible for the selection of securities of that Fund. The portfolio managers are as follows: for Money Fund, Arthur Zimmer; for High Income Fund, Bond Fund, Multiple Strategies Fund and Strategic Bond Fund, David Negri (joined by Richard Rubinstein for Multiple Strategies Fund and by Arthur Steinmetz for Strategic Bond Fund); for Capital Appreciation Fund, Paul LaRocco; for Growth Fund, Jane Putnam; for Global Securities Fund, George Evans; and for Growth & Income Fund, John Wallace. The Manager is paid an advisory fee by each Fund, based on its assets. The Trust's Board of Trustees, elected by shareholders, oversees the investment adviser and the portfolio manager. Please refer to "How The Funds Are Managed," starting on page ____ for more information about the Manager and its fees. - How Risky Are The Funds? While different types of investments have risks that differ in type and magnitude, all investments carry risk to some degree. Changes in overall market movements or interest rates, or factors affecting a particular industry or issuer, can affect the value of the Funds' investments and their price per share. Equity investments are generally subject to a number of risks including the risk that values will fluctuate as a result of changing expectations for the economy and individual issuers. For both equity and income investments, foreign investments are subject to the risk of adverse currency fluctuation and additional risks and expenses in comparison to domestic investments. In comparing levels of risk among the equity and equity- income funds, Growth Fund is most conservative, followed by Multiple Strategies Fund, Growth & Income Fund, Capital Appreciation Fund and Global Securities Fund. Fixed-income investments are generally subject to the risk that values will fluctuate with inflation, with lower-rated fixed-income investments being subject to a greater risk that the issuer will default in its interest or principal payment obligations. In comparing levels of risk among the fixed-income funds, Bond Fund is most conservative, followed by Strategic Bond Fund and High Income Fund. Money Fund is the most conservative of all nine Funds in that Money Fund intends to maintain a stable net asset value, although there is no assurance that it will be able to do so. - How Can I Buy or Sell Shares? Shares of each Fund are offered only for purchase by Accounts as an investment medium for variable life insurance policies and variable annuity contracts. Account owners should refer to the accompanying Account Prospectus on how to buy or sell shares of the Funds. - How Have the Funds Performed? Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund measure their performance by quoting their yields. All of the Funds with the exception of Money Fund may measure their performance by quoting average annual total return and cumulative total return, which measure historical performance. Those returns can be compared to the returns (over similar periods) of other funds. Of course, other funds may have different objectives, investments, and levels of risk. The performance of all but two of the Funds can also be compared to broad market indices, which we have done starting on page ___. Please remember that past performance does not guarantee future results. Financial Highlights The table on the following pages presents selected financial information, including per share data and expense ratios and other data about all the Funds (except Growth & Income Fund, which did not commence operations until after December 31, 1994). The information is based on each such Fund's average net assets. This information has been audited by Deloitte & Touche LLP, the Funds' independent auditors, whose report on the Funds' financial statements for the fiscal year ended December 31, 1994, is included in the Statement of Additional Information.
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .04 .03 .04 .06 .08 Dividends and distributions to shareholders (.04) (.03) (.04) (.06) (.08) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $89,671 $61,221 $58,266 $58,709 $89,143 Average net assets (in thousands) $90,264 $57,654 $61,317 $75,747 $82,966 Number of shares outstanding at end of year (in thousands) 89,695 61,221 58,266 58,703 89,141 Ratios to average net assets: Net investment income 4.18% 3.12% 3.76% 5.97% 7.80% Expenses .43% .43% .50% .49% .51%
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .09 .07 .06 .06 .05 Dividends and distributions to shareholders (.09) (.07) (.06) (.06) (.05) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $68,440 $69,468 $42,538 $28,218 $2,506 Average net assets (in thousands) $67,586 $60,241 $35,138 $12,914 $2,080 Number of shares outstanding at end of year (in thousands) 68,439 69,468 42,538 28,218 2,506 Ratios to average net assets: Net investment income 8.82% 7.31% 6.33% 5.68% 7.25%(2) Expenses .53% .55% .59% .75% .75%(2)
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Annualized. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER HIGH INCOME FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.02 $ 9.74 $ 9.40 $ 7.90 $ 8.59 Income (loss) from investment operations: Net investment income .94 .82 1.19 1.28 1.21 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (1.27) 1.65 .43 1.30 (.82) -------------------------------------------------------------------- Total income (loss) from investment operations (.33) 2.47 1.62 2.58 .39 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.66) (1.19) (1.28) (1.08) (1.08) Distributions from net realized gain on investments, options written and foreign currency transactions (.24) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.90) (1.19) (1.28) (1.08) (1.08) -------------------------------------------------------------------- Net asset value, end of period $ 9.79 $ 11.02 $ 9.74 $ 9.40 $ 7.90 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (3.18)% 26.34% 17.92% 33.91% 4.65% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 95,698 $93,011 $40,817 $27,308 $19,172 Average net assets (in thousands) $101,096 $67,000 $36,861 $23,663 $21,493 Number of shares outstanding at end of period (in thousands) 9,779 8,443 4,189 2,905 2,427 Ratios to average net assets: Net investment income 9.15% 10.50% 12.08% 14.26% 14.32% Expenses .67% .68% .73% .75% .75% Portfolio turnover rate(4) 110.1% 135.7% 144.2% 108.0% 95.1%
OPPENHEIMER HIGH INCOME FUND ----------------------------------------------------- 1989 1988 1987 1986(1) ----------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 9.30 $ 9.14 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income 1.09 1.12 1.30 .72 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.65) .23 (.51) (.24) ----------------------------------------------------- Total income (loss) from investment operations .44 1.35 .79 .48 ----------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (1.08) (1.07) (1.55) (.44) Distributions from net realized gain on investments, options written and foreign currency transactions (.07) (.12) (.14) -- ----------------------------------------------------- Total dividends and distributions to shareholders (1.15) (1.19) (1.69) (.44) ----------------------------------------------------- Net asset value, end of period $ 8.59 $ 9.30 $ 9.14 $ 10.04 ===================================================== TOTAL RETURN, AT NET ASSET VALUE(2) 4.84% 15.58% 8.07% 4.73% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $23,698 $25,551 $21,768 $14,833 Average net assets (in thousands) $26,040 $24,530 $20,637 $ 8,036 Number of shares outstanding at end of period (in thousands) 2,760 2,746 2,382 1,478 Ratios to average net assets: Net investment income 11.52% 11.94% 13.13% 11.18%(3) Expenses .75% .75% .75% .75%(3) Portfolio turnover rate(4) 78.7% 57.9% 42.1% 18.3%
1. For the period from April 30, 1986 (commencement of operations) to December 31, 1986. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER BOND FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.65 $ 10.99 $ 11.15 $ 10.33 $ 10.49 Income (loss) from investment operations: Net investment income .76 .65 .87 .95 .97 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.98) .76 (.17) .80 (.18) -------------------------------------------------------------------- Total income (loss) from investment operations (.22) 1.41 .70 1.75 .79 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.62) (.75) (.86) (.93) (.95) Distributions from net realized gain on investments and foreign currency transactions (.03) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.65) (.75) (.86) (.93) (.95) -------------------------------------------------------------------- Net asset value, end of period $ 10.78 $ 11.65 $ 10.99 $ 11.15 $ 10.33 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (1.94)% 13.04% 6.50% 17.63% 7.92% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $135,067 $111,846 $63,354 $32,762 $16,576 Average net assets (in thousands) $121,884 $ 87,215 $45,687 $22,169 $15,088 Number of shares outstanding at end of period (in thousands) 12,527 9,602 5,766 2,939 1,604 Ratios to average net assets: Net investment income 7.30% 7.20% 7.81% 8.73% 9.30% Expenses .57% .46% .56% .64% .61% Portfolio turnover rate(4) 35.1% 36.3% 41.3% 7.6% 7.4%
OPPENHEIMER BOND FUND -------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 10.15 $ 10.19 $ 11.15 $ 11.27 $ 10.00 Income (loss) from investment operations: Net investment income .98 .94 .97 .97 .86 Net realized and unrealized gain (loss) on investments and foreign currency transactions .32 (.05) (.71) .09 .99 -------------------------------------------------------------------- Total income (loss) from investment operations 1.30 .89 .26 1.06 1.85 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.96) (.93) (1.17) (1.03) (.58) Distributions from net realized gain on investments and foreign currency transactions -- -- (.05) (.15) -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.96) (.93) (1.22) (1.18) (.58) -------------------------------------------------------------------- Net asset value, end of period $ 10.49 $ 10.15 $ 10.19 $ 11.15 $ 11.27 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) 13.32% 8.97% 2.53% 10.12% 18.82% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $13,422 $ 9,989 $10,415 $7,377 $2,725 Average net assets (in thousands) $11,167 $11,028 $ 8,748 $4,647 $1,614 Number of shares outstanding at end of period (in thousands) 1,280 984 1,022 662 242 Ratios to average net assets: Net investment income 9.34% 9.08% 9.17% 8.71% 10.52%(3) Expenses .64% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 5.4% 36.3% 5.9% 27.7% 101.3%
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 31.64 $ 26.04 $ 23.24 $ 15.24 $ 20.40 Income (loss) from investment operations: Net investment income .10 .05 .06 .08 .32 Net realized and unrealized gain (loss) on investments and options written (2.22) 6.71 3.43 8.18 (3.54) ---------------------------------------------------------------------- Total income (loss) from investment operations (2.12) 6.76 3.49 8.26 (3.22) ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) (.06) (.14) (.26) (.53) Distributions from net realized gain on investments and options written (3.53) (1.10) (.55) -- (1.41) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (3.57) (1.16) (.69) (.26) (1.94) ---------------------------------------------------------------------- Net asset value, end of period $ 25.95 $ 31.64 $ 26.04 $ 23.24 $ 15.24 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) (7.59)% 27.32% 15.42% 54.72% (16.82)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $185,774 $136,885 $83,335 $49,371 $23,295 Average net assets (in thousands) $153,832 $98,228 $56,371 $34,887 $24,774 Number of shares outstanding at end of period (in thousands) 7,158 4,326 3,201 2,125 1,528 Ratios to average net assets: Net investment income .50% .23% .30% .81% 1.93% Expenses .57% .47% .54% .63% .71% Portfolio turnover rate(5) 96.5% 122.8% 78.9% 122.3% 222.0%
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- 1989 1988 1987 1986(2) 1986(1) ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.31 $ 14.39 $ 13.12 $ 16.21 $ 13.71 Income (loss) from investment operations: Net investment income .50 .33 .21 .12 .09 Net realized and unrealized gain (loss) on investments and options written 3.93 1.60 1.67 (1.24) 3.40 ---------------------------------------------------------------------- Total income (loss) from investment operations 4.43 1.93 1.88 (1.12) 3.49 ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.34) -- (.34) (.21) (.20) Distributions from net realized gain on investments and options written -- (.01) (.27) (1.76) (.79) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (.34) (.01) (.61) (1.97) (.99) ---------------------------------------------------------------------- Net asset value, end of period $ 20.40 $ 16.31 $ 14.39 $ 13.12 $ 16.21 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) 27.57% 13.41% 14.34% (1.65)% N/A RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $27,523 $13,667 $9,692 $4,549 $3,852 Average net assets (in thousands) $21,307 $13,239 $8,598 $3,099 $2,292 Number of shares outstanding at end of period (in thousands) 1,349 838 674 347 238 Ratios to average net assets: Net investment income 3.27% 2.13% 1.68% 2.36%(4) 2.27% Expenses .68% .73% .75% 1.01%(4) 2.17% Portfolio turnover rate(5) 130.5% 128.7% 138.7% 100.1% 464.8%
1. For the year ended June 30, 1986. Operating results were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 2. For the six months ended December 31, 1986. Operating results prior to August 15, 1986 were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 3. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 4. Annualized. 5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 17.70 $ 16.96 $ 15.17 $ 12.54 $ 16.38 Income (loss) from investment operations: Net investment income .22 .46 .16 .30 .56 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.05) .74 1.99 2.82 (1.79) --------------------------------------------------------------------- Total income from investment operations .17 1.20 2.15 3.12 (1.23) --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.15) (.14) (.36) (.49) (.62) Distributions from net realized gain on investments and foreign currency transactions (.04) (.32) -- -- (1.99) --------------------------------------------------------------------- Total dividends and distributions to (.19) (.46) (.36) (.49) (2.61) shareholders --------------------------------------------------------------------- Net asset value, end of period $ 17.68 $ 17.70 $ 16.96 $ 15.17 $ 12.54 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) .97% 7.25% 14.53% 25.54% (8.21)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $63,283 $56,701 $36,494 $22,032 $15,895 Average net assets (in thousands) $59,953 $46,389 $25,750 $18,810 $17,235 Number of shares outstanding at end of period (in thousands) 3,580 3,203 2,152 1,453 1,267 Ratios to average net assets: Net investment income 1.38% 1.13% 1.36% 2.82% 4.09% Expenses .58% .50% .61% .70% .71% Portfolio turnover rate(4) 53.8% 12.6% 48.7% 133.9% 267.9%
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.64 $ 11.21 $ 12.53 $ 10.95 $ 10.00 Income (loss) from investment operations: Net investment income .66 .29 .20 .13 .16 Net realized and unrealized gain (loss) on investments and foreign currency transactions 2.50 2.19 .24 1.76 .79 --------------------------------------------------------------------- Total income from investment operations 3.16 2.48 .44 1.89 .95 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.35) -- (.34) (.15) -- Distributions from net realized gain on investments and foreign currency transactions (.07) (.05) (1.42) (.16) -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.42) (.05) (1.76) (.31) -- --------------------------------------------------------------------- Net asset value, end of period $ 16.38 $ 13.64 $ 11.21 $ 12.53 $ 10.95 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) 23.59% 22.09% 3.32% 17.76% 9.50% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $19,301 $17,746 $14,692 $8,287 $ 820 Average net assets (in thousands) $18,596 $15,585 $15,121 $3,744 $ 388 Number of shares outstanding at end of period (in thousands) 1,179 1,301 1,311 661 75 Ratios to average net assets: Net investment income 3.72% 2.39% 1.56% 2.62% 4.25%(3) Expenses .70% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 148.0% 132.5% 191.0% 100.9% 132.9%
1. For the period from April 3, 1985 (commencement) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER MULTIPLE STRATEGIES FUND ------------------------------------------------------------------------ Year Ended December 31, 1994 1993 1992 1991 1990 ------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.88 $ 12.47 $ 11.96 $ 10.90 $ 12.30 Income (loss) from investment operations: Net investment income .63 .55 .55 .69 .73 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.90) 1.41 .50 1.15 (.97) ------------------------------------------------------------------------ Total income (loss) from investment operations (.27) 1.96 1.05 1.84 (.24) ------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.60) (.55) (.54) (.78) (.70) Distributions from net realized gain on investments, options written and foreign currency transactions (.10) -- -- -- (.46) ------------------------------------------------------------------------ Total dividends and distributions to shareholders (.70) (.55) (.54) (.78) (1.16) ------------------------------------------------------------------------ Net asset value, end of period $ 12.91 $ 13.88 $ 12.47 $ 11.96 $ 10.90 ========================================================== ============== TOTAL RETURN, AT NET ASSET VALUE(2) (1.95)% 15.95% 8.99% 17.48% (1.91)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $292,067 $250,290 $159,464 $124,634 $118,888 Average net assets (in thousands) $279,949 $199,954 $139,011 $117,000 $123,231 Number of shares outstanding at end of period (in thousands) 22,620 18,026 12,792 10,421 10,908 Ratios to average net assets: Net investment income 4.90% 4.44% 4.63% 5.95% 6.53% Expenses .56% .48% .55% .54% .55% Portfolio turnover rate(4) 31.4% 32.4% 57.8% 80.3% 99.2%
OPPENHEIMER MULTIPLE STRATEGIES FUND --------------------------------------- 1989 1988 1987(1) --------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.58 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .73 .66 .44 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions 1.04 1.53 .07 --------------------------------------- Total income (loss) from investment operations 1.77 2.19 .51 --------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.68) (.65) (.43) Distributions from net realized gain on investments, options written and foreign currency transactions (.37) -- (.04) --------------------------------------- Total dividends and distributions to shareholders (1.05) (.65) (.47) ======================================= Net asset value, end of period $ 12.30 $ 11.58 $ 10.04 TOTAL RETURN, AT NET ASSET VALUE(2) 15.76% 22.15% 3.97% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $121,286 $78,386 $53,291 Average net assets (in thousands) $101,057 $64,298 $34,256 Number of shares outstanding at end of period (in thousands) 9,860 6,766 5,306 Ratios to average net assets: Net investment income 6.36% 6.18% 6.12%(3) Expenses .57% .58% .65%(3) Portfolio turnover rate(4) 66.9% 110.0% 46.9%
1. For the period from February 9, 1987 (commencement of operations) to December 31, 1987. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GLOBAL SECURITIES FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.30 $ 9.57 $ 10.38 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .04 (.02) .07 .04 -- Net realized and unrealized gain (loss) on investments and foreign currency transactions (.96) 6.75 (.80) .30 .04 --------------------------------------------------------------------- Total income (loss) from investment operations (.92) 6.73 (.73) .34 .04 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) -- (.04) -- -- Distributions from net realized gain on investments and foreign currency transactions (.25) -- (.04) -- -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.29) -- (.08) -- -- --------------------------------------------------------------------- Net asset value, end of period $ 15.09 $ 16.30 $ 9.57 $ 10.38 $ 10.04 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) (5.72)% 70.32% (7.11)% 3.39% .40% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $297,842 $96,425 $13,537 $7,339 $ 432 Average net assets (in thousands) $214,545 $31,696 $11,181 $3,990 $ 263 Number of shares outstanding at end of period (in thousands) 19,743 5,917 1,415 707 43 Ratios to average net assets: Net investment income .54% .72% 1.04% .75% .08%(3) Expenses .91% .92% 1.06% 1.32% 6.84%(3) Portfolio turnover rate(4) 70.4% 65.1% 34.1% 29.5% 0.0%
1. For the period from November 12, 1990 (commencement of operations) to December 31, 1990. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER STRATEGIC BOND FUND -------------------------------- Year Ended December 31, 1994 1993(1) -------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 5.12 $ 5.00 Income (loss) from investment operations: Net investment income .35 .10 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.54) .11 -------------------------------- Total income (loss) from investment operations (.19) .21 -------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.32) (.09) Distributions from net realized gain on investments, options written and foreign currency transactions -- -- Distributions in excess of net realized gain on investments (.01) -- -------------------------------- Total dividends and distributions to shareholders (.33) (.09) -------------------------------- Net asset value, end of period $ 4.60 $ 5.12 ================================ TOTAL RETURN, AT NET ASSET VALUE(2) (3.78)% 4.25% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $20,320 $9,887 Average net assets (in thousands) $15,389 $4,259 Number of shares outstanding at end of period (in thousands) 4,418 1,930 Ratios to average net assets: Net investment income 8.36% 5.67%(3) Expenses .87% .96%(3) Portfolio turnover rate(4) 136.6% 10.9%
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Investment Objectives and Policies Investment Objective and Policies - Money Fund. The objective of Money Fund is to seek the maximum current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. The Securities and Exchange Commission Rule 2a-7 ("Rule 2a- 7") under the Investment Company Act of 1940 (the "Investment Company Act") places restrictions on a money market fund's investments. Under Rule 2a-7, Money Fund may purchase only "Eligible Securities," as defined below, that the Trust's Board of Trustees has determined have minimal credit risk. An "Eligible Security" is (a) a security that has received a rating in one of the two highest short-term rating categories by any two "nationally-recognized statistical rating organizations" as defined in Rule 2a-7 ("Rating Organizations"), or, if only one Rating Organization has rated that security, by that Rating Organization, or (b) an unrated security that is judged by the Trust's investment adviser, Oppenheimer Management Corporation (the "Manager") to be of comparable quality to investments that are "Eligible Securities" rated by Rating Organizations. Rule 2a-7 permits Money Fund to purchase "First Tier Securities," which are Eligible Securities rated in the highest category for short-term debt obligations by at least two Rating Organizations, or, if only one Rating Organization has rated a particular security, by that Rating Organization, or comparable unrated securities. Under Rule 2a-7, Money Fund may invest only up to 5% of its assets in "Second Tier Securities," which are Eligible Securities that are not "First Tier Securities." In addition to the overall 5% limit on Second Tier Securities, Money Fund may not invest (i) more than 5% of its total assets in the securities of any one issuer (other than the U.S. Government, its agencies or instrumentalities) or (ii) more than 1% of its total assets or $1 million (whichever is greater) in Second Tier Securities of any one issuer. The Trust's Board must approve or ratify the purchase of Eligible Securities that are unrated or are rated by only one Rating Organization. Additionally, under Rule 2a-7, Money Fund must maintain a dollar-weighted average portfolio maturity of no more than 90 days, and the maturity of any single portfolio investment may not exceed 397 days. The Trust's Board has adopted procedures under Rule 2a-7 pursuant to which the Board has delegated to the Manager the responsibility of conforming Money Fund's investments with the requirements of Rule 2a-7 and those Procedures. Ratings at the time of purchase will determine whether securities may be acquired under the above restrictions. The rating restrictions described in this Prospectus do not apply to banks in which the Trust's cash is kept. Subsequent downgrades in ratings may require reassessment of the credit risk presented by a security and may require its sale. See "Investment Objectives and Policies -- Money Fund" in the Statement of Additional Information for further details. The Trust intends to exercise due care in the selection of portfolio securities. However, a risk may exist that the issuers of Money Fund's portfolio securities may not be able to meet their duties and obligations on interest or principal payments at the time called for by the instrument. There is also the risk that because of a redemption demand greater than anticipated by management, some of Money Fund's portfolio may have to be liquidated prior to maturity at prices less than the original cost or maturity value. Any of these risks, if encountered, could cause a reduction in the net asset value of Money Fund's shares. The types of instruments that will form the major part of Money Fund's investments are certificates of deposit, bankers' acceptances, commercial paper, U.S. Treasury bills, securities of U.S. government agencies or instrumentalities and other debt instruments (including bonds) issued by corporations, including variable and floating rate instruments, and variable rate master demand notes. Some of such instruments may be supported by letters of credit or may be subject to repurchase transactions (described below). Except as described below, Money Fund will purchase certificates of deposit or bankers' acceptances only if issued or guaranteed by a domestic bank subject to regulation by the U.S. Government or by a foreign bank having total assets at least equal to U.S. $1 billion. Money Fund may invest in certificates of deposit of up to $100,000 of a domestic bank if such certificates of deposit are fully insured as to principal by the Federal Deposit Insurance Corporation. For purposes of this section, the term "bank" includes commercial banks, savings banks, and savings and loan associations and the term "foreign bank" includes foreign branches of U.S. banks (issuers of "Eurodollar" instruments), U.S. branches and agencies of foreign banks (issuers of "Yankee dollar" instruments) and foreign branches of foreign banks. Money Fund also may purchase obligations issued by other entities if they are: (i) guaranteed as to principal and interest by a bank or corporation whose certificates of deposit or commercial paper may otherwise be purchased by Money Fund, or (ii) subject to repurchase agreements (explained below), if the collateral for the agreement complies with Rule 2a-7. In addition, the Fund may also invest in other types of securities described above in accordance with the requirements of the rule. For further information, see "Foreign Securities" and "Other Investment Restrictions" below. See Appendix A below and "Investment Objectives and Policies" in the Statement of Additional Information for further information on the investments which Money Fund may make. See Appendix B below for a description of the rating categories of the Rating Organizations. Investment Objectives and Policies - High Income Fund, Bond Fund and Strategic Bond Fund. High Income Fund. The objective of High Income Fund is to earn a high level of current income by investing primarily in a diversified portfolio of high yield, fixed-income securities (long-term debt and preferred stock issues, including convertible securities) believed by the Manager not to involve undue risk. The Fund may also acquire participation interests in loans that are made to corporations (see "Participation Interests," below). High Income Fund's investment policy is to assume certain risks (discussed below) in seeking high yield, which is ordinarily associated with high risk securities, commonly known as "junk bonds," in the lower rating categories of the established securities ratings services (i.e., securities rated "Baa" or lower by Moody's Investor Service, Inc. ("Moody's") or "BBB" or lower by Standard & Poor's Corporation ("Standard & Poor's")), and unrated securities. The investments in which High Income Fund will invest principally will be in the lower rating categories; it may invest in securities rated as low as "C" by Moody's or "D" by Standard & Poor's. Such ratings indicate that the obligations are speculative in a high degree and may be in default. Appendix B of this Prospectus describes these rating categories. High Income Fund is not obligated to dispose of securities whose issuers subsequently are in default or if the rating is subsequently downgraded. High Income Fund may invest, without limit, in unrated securities if such securities offer, in the opinion of the Manager, yields and risks comparable to rated securities. Risks of high yield securities are discussed under "Risk Factors" below. High Income Fund's portfolio at December 31, 1994 contained domestic and foreign corporate bonds in the following rating categories as rated by Standard & Poor's (the percentages relate to the weighted average value of the bonds in each rating category as a percentage of that Fund's total assets): AAA, 1.70%; AA, 2.10%; A, 3.06%; BBB, 1.06%; BB, 5.93%; B, 37.14%; CCC, 5.53%; CC, 1.04%; D, 1.69%; and unrated, 18.02%. If a bond was not rated by Standard & Poor's but was rated by Moody's, it is included in the comparable category. The Manager will not rely principally on the ratings assigned by rating services. The Manager's analysis may include consideration of the financial strength of the issuer, including its historic and current financial condition, the trading activity in its securities, present and anticipated cash flow, estimated current value of assets in relation to historical cost, the issuer's experience and managerial expertise, responsiveness to changes in interest rates and business conditions, debt maturity schedules, current and future borrowing requirements, and any change in the financial condition of the issuer and the issuer's continuing ability to meet its future obligations. The Manager also may consider anticipated changes in business conditions, levels of interest rates of bonds as contrasted with levels of cash dividends, industry and regional prospects, the availability of new investment opportunities and the general economic, legislative and monetary outlook for specific industries, the nation and the world. Bond Fund. Bond Fund's primary objective is to earn a high level of current income by investing primarily in a diversified portfolio of high yield fixed-income securities. As a secondary objective, Bond Fund seeks capital growth when consistent with its primary objective. As a matter of non-fundamental policy, Bond Fund will, under normal market conditions, invest at least 65% of its total assets in bonds. Bond Fund will invest only in securities rated "Baa" or better by Moody's or "BBB" or better by Standard & Poor's. However, Bond Fund is not obligated to dispose of securities if the rating is reduced, and therefore will from time to time hold securities rated lower than "Baa" by Moody's or "BBB" by Standard & Poor's. Strategic Bond Fund. The investment objective of Strategic Bond Fund is to seek a high level of current income principally derived from interest on debt securities and to enhance such income by writing covered call options on debt securities. Although the premiums received by Strategic Bond Fund from writing covered calls are a form of capital gain, the Fund generally will not make investments in securities with the objective of seeking capital appreciation. The Fund intends to invest principally in: (i) lower-rated high yield domestic debt securities; (ii) U.S. Government securities, and (iii) foreign government and corporate debt securities. Under normal circumstances, the Fund's assets will be invested in each of these three sectors. However, Strategic Bond Fund may from time to time invest up to 100% of its total assets in any one sector if, in the judgment of the Manager, the Fund has the opportunity of seeking a high level of current income without undue risk to principal. Accordingly, the Fund's investments should be considered speculative. Distributable income will fluctuate as the Fund assets are shifted among the three sectors. - High Yield Securities. The higher yields and high income sought by Strategic Bond Fund are generally obtainable from securities in the lower rating categories of the established rating services, commonly known as "junk bonds." Such securities are rated "Baa" or lower by Moody's or "BBB" or lower by Standard & Poor's. Strategic Bond Fund may invest in securities rated as low as "C" by Moody's or "D" by Standard & Poor's. Such ratings indicate that the obligations are speculative in a high degree and may be in default. Risks of high yield, high risk securities are discussed under "Risk Factors" below. Strategic Bond Fund's portfolio at December 31, 1994, contained securities in the following rating categories as rated by Standard & Poor's (the percentages relate to the weighted average of the bonds in each rating category as a percentage of that Fund's total assets): AAA, 22.53%; AA, 2.41%; BBB, .41%; BB, 5.32%; B, 20.57%; CCC, 3.17%; D, .62%; unrated, 17.76%. If a bond was not rated by Standard & Poor's but was rated by Moody's, it is included in the comparable category. The Manager will not rely principally on the ratings assigned by rating services. Strategic Bond Fund is not obligated to dispose of securities whose issuers subsequently are in default or if the rating of such securities is reduced. Appendix B of this Prospectus describes these rating categories. Strategic Bond Fund may also invest in unrated securities which, in the opinion of the Manager, offer yields and risks comparable to those of securities which are rated. - International Securities. The Fund may invest in foreign government and foreign corporate debt securities (which may be denominated in U.S. dollars or in non-U.S. currencies) issued or guaranteed by foreign corporations, certain supranational entities (such as the World Bank) and foreign governments (including political subdivisions having taxing authority) or their agencies or instrumentalities. These investments may include (i) U.S. dollar-denominated debt obligations known as "Brady Bonds," which are issued for the exchange of existing commercial bank loans to foreign entities for new obligations that are generally collateralized by zero coupon Treasury securities having the same maturity, (ii) debt obligations such as bonds (including sinking fund and callable bonds), (iii) debentures and notes (including variable rate and floating rate instruments), and (iv) preferred stocks and zero coupon securities. Further information about investments in foreign securities is set forth below under "Other Investment Techniques and Strategies - Foreign Securities." - U.S. Government Securities. U.S. Government Securities are debt obligations issued by or guaranteed by the United States Government or one of its agencies or instrumentalities. Although U.S. Government Securities are considered among the most creditworthy of fixed-income investments and their yields are generally lower than the yields available from corporate debt securities, the values of U.S. Government Securities (and of fixed- income securities generally) will vary inversely to changes in prevailing interest rates. To compensate for the lower yields available on U.S. Government securities, Strategic Bond Fund will attempt to augment these yields by writing covered call options against them. See "Hedging," below. Certain of these obligations, including U.S. Treasury notes and bonds, and mortgage-backed securities guaranteed by the Government National Mortgage Association ("Ginnie Maes"), are supported by the full faith and credit of the United States. Certain other U.S. Government Securities, issued or guaranteed by Federal agencies or government- sponsored enterprises, are not supported by the full faith and credit of the United States. These latter securities may include obligations supported by the right of the issuer to borrow from the U.S. Treasury, such as obligations of Federal Home Loan Mortgage Corporation ("Freddie Macs"), and obligations supported by the credit of the instrumentality, such as Federal National Mortgage Association bonds ("Fannie Maes"). U.S. Government Securities in which the Fund may invest include zero coupon U.S. Treasury securities, mortgage-backed securities and money market instruments. Zero coupon Treasury securities are: (i) U.S. Treasury notes and bonds which have been stripped of their unmatured interest coupons and receipts; or (ii) certificates representing interests in such stripped debt obligations or coupons. Because a zero coupon security pays no interest to its holder during its life or for a substantial period of time, it usually trades at a deep discount from its face or par value and will be subject to greater fluctuations of market value in response to changing interest rates than debt obligations of comparable maturities which make current distributions of interest. Because the Fund accrues taxable income from these securities without receiving cash, the Fund may be required to sell portfolio securities in order to pay cash dividends or to meet redemptions. The Fund may invest up to 50% of its total assets at the time of purchase in zero coupon securities issued by either corporations or the U.S. Treasury. - Domestic Securities. The Fund's investments in domestic securities may include preferred stocks, participation interests and zero coupon securities. Domestic investments include fixed-income securities and dividend-paying common stocks issued by domestic corporations in any industry which may be denominated in U.S. dollars or non-U.S. currencies. The Fund's investments may include securities which represent participation interests in loans made to corporations (see "Participation Interests," below) and in pools of residential mortgage loans which may be guaranteed by agencies or instrumentalities of the U.S. Government (e.g. Ginnie Maes, Freddie Macs and Fannie Maes), including collateralized mortgage-backed obligations ("CMOs"), or which may not be guaranteed. Such securities differ from conventional debt securities which provide for periodic payment of interest in fixed amounts (usually semi-annually) with principal payments at maturity or specified call dates. Mortgage-backed securities provide monthly payments which are, in effect, a "pass-through" of the monthly interest and principal payments (including any prepayments) made by the individual borrowers on the pooled mortgage loans. The Fund's reinvestment of scheduled principal payments and unscheduled prepayments it receives may occur at lower rates than the original investment, thus reducing the yield of the Fund. CMOs in which the Fund may invest are securities issued by a U.S. Government instrumentality or private corporation that are collateralized by a portfolio of mortgages or mortgage-backed securities which may or may not be guaranteed by the U.S. Government. The issuer's obligation to make interest and principal payments is secured by the underlying portfolio of mortgages or mortgage- backed securities. Mortgage-backed securities may be less effective than debt obligations of similar maturity at maintaining yields during periods of declining interest rates. The Fund may also invest in CMOs that are "stripped." That means that the security is divided into two parts, one of which receives some or all of the principal payments (and is known as a "P/O") and the other which receives some or all of the interest (and is known as an "I/O"). P/Os and I/Os are generally referred to as "derivative investments," discussed further below. The yield to maturity on the class that receives only interest is extremely sensitive to the rate of payment of the principal on the underlying mortgages. Principal prepayments increase that sensitivity. Stripped securities that pay "interest only" are therefore subject to greater price volatility when interest rates change, and they have the additional risk that if the underlying mortgages are prepaid, the Fund will lose the anticipated cash flow from the interest on the prepaid mortgages. That risk is increased when general interest rates fall, and in times of rapidly falling interest rates, the Fund might receive back less than its investment. The value of "principal only" securities generally increases as interest rates decline and prepayment rates rise. The price of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity. Stripped securities are generally purchased and sold by institutional investors through investment banking firms. At present, established trading markets have not yet developed for these securities. Therefore, some stripped securities may be deemed "illiquid." If the Fund holds illiquid stripped securities, the amount it can hold will be subject to the Fund's investment policy limiting investments in illiquid securities to 15% of the Fund's assets. The Fund may also enter into "forward roll" transactions with mortgage-backed securities. The Fund sells mortgage-backed securities it holds to banks or other buyers and simultaneously agrees to repurchase a similar security from that party at a later date at an agreed-upon price. Forward rolls are considered to be a borrowing. The Fund is required to place liquid assets in a segregated account with its custodian bank in an amount equal to its obligation under the forward roll. The main risk of this investment strategy is risk of default by the counterparty. The Fund may also invest in asset-backed securities, which are securities that represent fractional undivided interests in pools of consumer loans and trade receivables, similar in structure to the mortgage-backed securities in which the Fund may invest, described above. Payments of principal and interest are passed through to holders of asset- backed securities and are typically supported by some form of credit enhancement, such as a letter of credit, surety bond, limited guarantee by another entity or having a priority to certain of the borrower's other securities. The degree of credit enhancement varies, and generally applies to only a fraction of the asset-backed security's par value until exhausted. Risk Factors. The securities in which High Income Fund and Strategic Bond Fund principally invest are considered speculative and involve greater risk than lower yielding, higher rated fixed-income securities, while providing higher yields than such securities. Lower rated securities may be less liquid, and significant losses could be experienced if a substantial number of other holders of such securities decide to sell at the same time. Other risks may involve the default of the issuer or price changes in the issuer's securities due to changes in the issuer's financial strength or economic conditions. Issuers of lower rated or unrated securities are generally not as financially secure or creditworthy as issuers of higher-rated securities. These Funds are not obligated to dispose of securities when issuers are in default or if the rating of the security is reduced. These risks are discussed in more detail in the Statement of Additional Information. Investment Objectives and Policies - Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund. Capital Appreciation Fund. In seeking its objective of capital appreciation, Capital Appreciation Fund will emphasize investments in securities of "growth-type" companies. Such companies are believed to have relatively favorable long-term prospects for increasing demand for their goods or services, or to be developing new products, services or markets, and normally retain a relatively larger portion of their earnings for research, development and investment in capital assets. "Growth-type" companies may also include companies developing applications for recent scientific advances. Capital Appreciation Fund may also invest in cyclical industries and in "special situations" that the Manager believes present opportunities for capital growth. "Special situations" are anticipated acquisitions, mergers or other unusual developments which, in the opinion of the Manager, will increase the value of an issuer's securities, regardless of general business conditions or market movements. An additional risk is present in this type of investment since the price of the security may be expected to decline if the anticipated development fails to occur. Growth Fund. In seeking its objective of capital appreciation, Growth Fund will emphasize investments in securities of well-known and established companies. Such securities generally have a history of earnings and dividends and are issued by seasoned companies (having an operating history of at least five years, including predecessors). Current income is a secondary consideration in the selection of Growth Fund's portfolio securities. Multiple Strategies Fund. The objective of Multiple Strategies Fund is to seek a high total investment return, which includes current income as well as capital appreciation in the value of its shares. In seeking that objective, Multiple Strategies Fund may invest in equity securities (including common stocks, preferred stocks, convertible securities and warrants), debt securities (including bonds, participation interests, asset-backed securities, private-label mortgage-backed securities and CMOs, zero coupon securities and U.S. government obligations, described above under "Investment Objectives and Policies - High Income Fund, Bond Fund and Strategic Bond Fund" and under "Participation Interests" below) and cash and cash equivalents (identified above as the types of instruments in which the Money Fund may invest). The composition of Multiple Strategies Fund's portfolio among the different types of permitted investments will vary from time to time based upon the Manager's evaluation of economic and market trends and perceived relative total anticipated return from such types of securities. Accordingly, there is neither a minimum nor a maximum percentage of Multiple Strategies Fund's assets that may, at any given time, be invested in any of the types of investments identified above. In the event future economic or financial conditions adversely affect equity securities, it is expected that Multiple Strategies Fund would assume a defensive position by investing in debt securities (with an emphasis on securities maturing in one year or less from the date of purchase), or cash and cash equivalents. Growth & Income Fund. The objective of Growth & Income Fund is to seek a high total return, which includes growth in the value of its shares as well as current income from equity and debt securities. In seeking that objective, Growth & Income Fund may invest in equity and debt securities. Its equity investments will include common stocks, preferred stocks, convertible securities and warrants. Its debt securities will include bonds, participation interests, asset-backed securities, private-label mortgage-backed securities and CMOs, zero coupon securities and U.S. government obligations. From time to time Growth & Income Fund may focus on small to medium capitalization issuers, the securities of which may be subject to greater price volatility than those of larger capitalized issuers. The composition of Growth & Income Fund's portfolio among equity and fixed-income investments will vary from time to time based upon the Manager's evaluation of economic and market trends and perceived relative total anticipated return from such types of investments. Accordingly, there is neither a minimum nor a maximum percentage of Growth & Income Fund's assets that may, at any given time, be invested in either type of investment. In the event future economic or financial conditions adversely affect equity securities, it is expected that Growth & Income Fund would assume a defensive position by investing in debt securities (with an emphasis on securities maturing in one year or less from the date of purchase). Global Securities Fund. The objective of Global Securities Fund is to seek long-term capital appreciation. Current income is not an objective. In seeking its objective, the Fund will invest a substantial portion of its invested assets in securities of foreign issuers, "growth-type" companies (those which, in the opinion of the Manager, have relatively favorable long-term prospects for increasing demand or which develop new products and retain a significant part of earnings for research and development), cyclical industries (e.g. base metals, paper and chemicals) and special investment situations which are considered to have appreciation possibilities (e.g., private placements of start-up companies). The Fund may invest without limit in "foreign securities" (as defined below in "Other Investment Techniques and Strategies - Foreign Securities") and thus the relative amount of such investments will change from time to time. It is currently anticipated that Global Securities Fund may invest as much as 80% or more of its total assets in foreign securities. Under normal market conditions, the Fund will invest its total assets in securities of issuers traded in markets of at least three countries (which may include the United States). See "Other Investment Techniques and Strategies - Foreign Securities," below, for further discussion as to the possible rewards and risks of investing in foreign securities and as to additional diversification requirements for the Fund's foreign investments. - Can the Funds' Investment Objectives and Policies Change? The Funds have investment objectives, described above, as well as investment policies each follows to try to achieve its objectives. Additionally, the Funds use certain investment techniques and strategies in carrying out those investment policies. The Funds' investment policies and techniques are not "fundamental" unless this Prospectus or the Statement of Additional Information says that a particular policy is "fundamental." Each Fund's investment objectives are fundamental policies. The Trust's Board of Trustees may change non-fundamental policies without shareholder approval, although significant changes will be described in amendments to this Prospectus. Fundamental policies are those that cannot be changed without the approval of a "majority" of the Fund's outstanding voting shares. The term "majority" is defined in the Investment Company Act to be a particular percentage of outstanding voting shares (and this term is explained in the Statement of Additional Information). Other Investment Techniques and Strategies. Some of the Funds can also use the investment techniques and strategies described below. These techniques involve certain risks. The Statement of Additional Information contains more information about these practices, including limitations on their use that are designed to reduce some of the risks. - Special Risks - Borrowing for Leverage. From time to time, Capital Appreciation Fund, Strategic Bond Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund may borrow money from banks to buy securities. These Funds will borrow only if they can do so without putting up assets as security for a loan. This is a speculative investment method known as "leverage." This investing technique may subject the Fund to greater risks and costs than funds that do not borrow. These risks may include the possibility that a Fund's net asset value per share will fluctuate more than funds that don't borrow, since a Fund pays interest on borrowings and interest expense affects a Fund's share price and yield. Growth Fund may borrow only up to 5% of the value of its total assets and Global Securities Fund may borrow up to 10% of the value of its total assets. Global Securities Fund will not borrow, if as a result of such borrowing more than 25% of its total assets would consist of investments in when-issued or delayed delivery securities or borrowed funds. Borrowing for Leverage is subject to regulatory limits described in more detail in "Borrowing" in the Statement of Additional Information. Pursuant to an undertaking by Capital Appreciation Fund, Strategic Bond Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund, borrowing by each such Fund is limited to 25% of the value of its net assets, which is further limited to 10% if the borrowing is for a purpose other than to facilitate redemptions. Neither percentage limitation is a fundamental policy. - Investments In Small, Unseasoned Companies. Money Fund, Capital Appreciation Fund, Multiple Strategies Fund, Growth & Income Fund, Growth Fund, Global Securities Fund and Strategic Bond Fund may each invest in securities of small, unseasoned companies. These are companies that have been in operation for less than three years, counting the operations of any predecessors. Securities of these companies may have limited liquidity (which means that the Fund may have difficulty selling them at an acceptable price when it wants to) and the prices of these securities may be volatile. It is not currently intended that investments in securities of companies (including predecessors) that have operated less than three years will exceed 5% of the net assets of either Growth Fund or Multiple Strategies Fund. Money Fund, Capital Appreciation Fund, Growth & Income Fund, Global Securities Fund and Strategic Bond Fund are not subject to this restriction. - Participation Interests. Strategic Bond Fund, Global Securities Fund, High Income Fund and Multiple Strategies Fund and Growth & Income Fund may acquire participation interests in U.S. dollar-denominated loans that are made to U.S. or foreign companies (the "borrower"). They may be interests in, or assignments of, the loan, and are acquired from the banks or brokers that have made the loan or are members of the lending syndicate. No more than 5% of a Fund's net assets can be invested in participation interests of the same borrower. The Manager has set certain creditworthiness standards for issuers of loan participations, and monitors their creditworthiness. The value of loan participation interests primarily depends upon the creditworthiness of the borrower, and its ability to pay interest and principal. Borrowers may have difficulty making payments. If a borrower fails to make scheduled interest or principal payments, the Fund could experience a decline in the net asset value of its shares. Some borrowers may have senior securities rated as low as "C" by Moody's or "D" by Standard & Poor's, but may be deemed acceptable credit risks. Participation interests are subject to each Fund's limitations on investments in illiquid securities. See "Illiquid and Restricted Securities" below. - Foreign Securities. Each Fund may purchase "foreign securities" that is, securities of companies organized under the laws of countries other than the United States that are traded on foreign securities exchanges or in the foreign over-the-counter markets. Securities of foreign issuers that are represented by American Depository Receipts ("ADRs"), or that are listed on a U.S. securities exchange or are traded in the United States over-the-counter markets are not considered "foreign securities" for this purpose because they are not subject to many of the special considerations and risks (discussed below and in the Statement of Additional Information) that apply to foreign securities traded and held abroad. If a Fund's securities are held abroad, the countries in which such securities may be held and the sub-custodians holding them must be approved by the Fund's Board of Trustees under applicable SEC rules. Each Fund may also invest in debt obligations issued or guaranteed by foreign corporations, certain supranational entities (such as the World Bank) and foreign governments (including political subdivisions having taxing authority) or their agencies or instrumentalities, subject to the investment policies described above. Foreign securities which the Funds may purchase may be denominated in U.S. dollars or in non-U.S. currencies. The Funds may convert U.S. dollars into foreign currency, but only to effect securities transactions and not to hold such currency as an investment, other than in hedging transactions (see "Hedging" below). It is currently intended that each Fund (other than Global Securities Fund, Multiple Strategies Fund, Growth & Income Fund or Strategic Bond Fund) will invest no more than 25% of its total assets in foreign securities or in government securities of any foreign country or in obligations of foreign banks. Multiple Strategies Fund will invest no more than 35% of its total assets in foreign securities or in government securities of any foreign country or in obligations of foreign banks. Global Securities Fund, Growth & Income Fund and Strategic Bond Fund have no restrictions on the amount of their assets that may be invested in foreign securities. Investments in securities of issuers in non- industrialized countries generally involve more risk and may be considered highly speculative. The Funds have undertaken to comply with the foreign country diversification guidelines of Section 10506 of the California Insurance Code, as follows: Whenever a Fund's investment in foreign securities exceeds 25% of its net assets, it will invest its assets in securities of issuers located in a minimum of two different foreign countries; this minimum is increased to three foreign countries if foreign investments comprise 40% or more of a Fund's net assets, to four if 60% or more and to five if 80% or more. In addition, no such Fund will have more than 20% of its net assets invested in securities of issuers located in any one foreign country; that limit is increased to 35% for Australia, Canada, France, Japan, the United Kingdom or Germany. The percentage of each Fund's assets that will be allocated to foreign securities will vary depending on the relative yields of foreign and U.S. securities, the economies of foreign countries, the condition of their financial markets, the interest rate climate of such countries, and the relationship of such countries' currencies to the U.S. dollar. These factors are judged on the basis of fundamental economic criteria (e.g., relative inflation levels and trends, growth rate forecasts, balance of payments status, and economic policies) as well as technical and political data. Subsequent foreign currency losses may result in a Fund having previously distributed more income in a particular period than was available from investment income, which could result in a return of capital to shareholders. Each such Fund's portfolio of foreign securities may include those of a number of foreign countries or, depending upon market conditions and subject to the above diversification requirements those of a single country. In summary, foreign securities markets may be less liquid and more volatile than the markets in the U.S. Risks of foreign securities investing may include foreign withholding taxation, changes in currency rates or currency blockage, currency exchange costs, difficulty in obtaining and enforcing judgments against foreign issuers, relatively greater brokerage and custodial costs, risk of expropriation or nationalization of assets, less publicly available information, and differences between domestic and foreign legal, auditing, brokerage and economic standards. See "Investment Objectives and Policies - Foreign Securities" in the Statement of Additional Information for further details. - Warrants and Rights. Warrants basically are options to purchase stock at set prices that are valid for a limited period of time. Rights are options to purchase securities, normally granted to current holders by the issuer. Each of the Funds (except Money Fund) may invest up to 5% of its total assets in warrants and rights. That 5% does not apply to warrants and rights that have been acquired as part of units with other securities or that were attached to other securities. No more than 2% of each such Fund's total assets may be invested in warrants that are not listed on either the New York or American Stock Exchanges. For further details about these investments, see "Warrants and Rights" in the Statement of Additional Information. - Repurchase Agreements. Each Fund may acquire securities that are subject to repurchase agreements to generate income while providing liquidity. 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 may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so. No Fund will enter into a repurchase agreement that causes more than 15% of its net assets (10% of net assets for Money Fund) to be subject to repurchase agreements having a maturity beyond seven days. There is no limit on the amount of a Fund's net assets that may be subject to repurchase agreements of seven days or less. - Illiquid and Restricted Securities. Under the policies and procedures established by the Board of Trustees, the Manager determines the liquidity of a Fund's investments. Investments may be illiquid because of the absence of a trading market, making it difficult to value them or dispose of them promptly at an acceptable price. A restricted security is one that has a contractual restriction on resale or cannot be sold publicly until it is registered under the Securities Act of 1933. No Fund will invest more than 15% of its net assets in illiquid or restricted securities; no Fund presently intends to invest more than 10% of its net assets in illiquid or restricted securities. This policy applies to participation interests, bank time deposits, master demand notes and repurchase transactions maturing in more than seven days, over- the-counter ("OTC") options held by any Fund and that portion of assets used to cover such OTC options (High Income, Global Securities and Strategic Bond Funds); it does not apply to certain restricted securities that are eligible for resale to qualified institutional purchasers. - Loans of Portfolio Securities. To attempt to increase its income, each Fund may lend its portfolio securities to brokers, dealers and other financial institutions. These loans are limited to 25% of the Fund's net assets and are subject to other conditions described in the Statement of Additional Information. The Funds presently do not intend to lend portfolio securities, but if any Fund does, the value of securities loaned is not expected to exceed 5% of the value of that Fund's total assets. - "When-Issued" or Delayed Delivery Transactions. Each Fund may purchase securities on a "when-issued" basis and may purchase or sell securities on a "delayed delivery" basis. These terms refer to securities that have been created and for which a market exists, but which are not available for immediate delivery. There may be a risk of loss to a Fund if the value of the security changes prior to the settlement date. - Hedging. As described below, the Funds (other than Money Fund) may purchase and sell certain kinds of futures contracts, put and call options, forward contracts, and options on futures and broadly-based stock or bond indices, or enter into interest rate swap agreements. These are all referred to as "hedging instruments." The Funds do not use hedging instruments for speculative purposes, and have limits on the use of them, described below. The hedging instruments the Funds may use are described below and in greater detail in "Other Investment Techniques and Strategies" in the Statement of Additional Information. The Funds may buy and sell options, futures and forward contracts for a number of purposes. They may do so to try to manage their exposure to the possibility that the prices of their portfolio securities may decline, or to establish a position in the securities market as a temporary substitute for purchasing individual securities. High Income Fund, Bond Fund, Multiple Strategies Fund, Growth & Income Fund and Strategic Bond Fund may do so to try to manage their exposure to changing interest rates. Some of these strategies, such as selling futures, buying puts and writing covered calls, hedge the Funds' portfolio against price fluctuations. Other hedging strategies, such as buying futures and call options, tend to increase the Funds' exposure to the securities market. Forward contracts are used to try to manage foreign currency risks on Funds' foreign investments. Foreign currency options are used to try to protect against declines in the dollar value of foreign securities the Funds own, or to protect against an increase in the dollar cost of buying foreign securities. Writing covered call options may also provide income to the Funds for liquidity purposes or to raise cash to distribute to shareholders. - Futures. Global Securities Fund, Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Strategic Bond Fund may buy and sell futures contracts that relate to broadly-based stock indices (these are referred to as Stock Index Futures). The latter three Funds and Global Securities Fund, Bond Fund and High Income Fund may buy and sell futures contracts that relate to interest rates (these are referred to as Interest Rate Futures). These types of Futures are described in "Hedging" in the Statement of Additional Information. - Put and Call Options. The Funds may buy and sell certain kinds of put options (puts) and call options (calls). The Funds may buy calls only on securities, broadly-based stock and bond indices, foreign currencies and Futures that the Fund is permitted to buy and sell (as explained above) or to terminate their obligation on a call that the Fund previously wrote. The Funds may write (that is, sell) covered call options on up to 100% of each Fund's assets. When a Fund writes a call, it receives cash (called a premium). The call gives the buyer the ability to buy the investment on which the call was written from that Fund at the call price during the period in which the call may be exercised. If the value of the investment does not rise above the call price, it is likely that the call will lapse without being exercised, while the Fund keeps the cash premium (and the investment). The Funds may purchase put options. Buying a put on an investment gives that Fund the right to sell the investment at a set price to a seller of a put on that investment. The Funds can buy only those puts that relate to (1) securities (whether or not that Fund owns such securities), (2) Futures that the Fund is permitted to buy and sell (as explained above), (3) broadly-based stock or bond indices or (4) foreign currencies. A Fund can buy a put on a Future whether or not that Fund owns the particular Future in its portfolio. A Fund may not sell a put other than a put that it previously purchased. The Funds may buy and sell puts and calls only if certain conditions are met: (1) calls the Funds buy or sell must be listed on a securities or commodities exchange, or quoted on the Automated Quotation System of the National Association of Securities Dealers, Inc. ("NASDAQ"); (2) in the case of puts and calls on foreign currency, they must be traded on a securities or commodities exchange, or in the over-the-counter market, or quoted by recognized dealers in those options; (3) none of the Funds will write puts if, as a result, more than 50% of its net assets would be required to be segregated liquid assets; (4) each call the Funds write must be "covered" while it is outstanding: that means a Fund must own the investment on which the call was written or it must own other securities that are acceptable for the escrow arrangements required for calls; (5) a Fund may write calls on Futures contracts it owns, but these calls must be covered by securities or other liquid assets the Fund owns and segregates to enable it to satisfy its obligations if the call is exercised; (6) a call or put option may not be purchased if the value of all of a Fund's put and call options would exceed 5% of that Fund's total assets. If a call written by a Fund is exercised, the Fund forgoes any possible profit from an increase in the market price of the underlying security over the exercise price less the commissions paid on the sale. In addition, the Fund could experience capital losses which might cause previously distributed short-term capital gains to be recharacterized as non-taxable return of capital to shareholders. - Forward Contracts. Forward contracts are foreign currency exchange contracts. They are used to buy or sell foreign currency for future delivery at a fixed price. The Funds (other than Money Fund) use them to "lock-in" the U.S. dollar price of a security denominated in a foreign currency that a Fund has bought or sold, or to protect against losses from changes in the relative values of the U.S. dollar and a foreign currency. Such Funds may also use "cross hedging," where a Fund hedges against changes in currencies other than the currency in which a security it holds is denominated. - Interest Rate Swaps. Strategic Bond Fund, High Income Fund and Bond Fund can also enter into interest rate swap transactions. In an interest rate swap, a Fund and another party exchange their right to receive or their obligation to pay interest on a security. For example, they may swap a right to receive floating rate payments for fixed rate payments. A Fund enters into swaps only on securities it owns. Each of these Funds may not enter into swaps with respect to more than 50% of its total assets. Also, each Fund will segregate liquid assets (such as cash or U.S. Government securities) to cover any amounts it could owe under swaps that exceed the amounts it is entitled to receive, and it will adjust that amount daily, as needed. Hedging instruments can be volatile investments and may involve special risks. The use of hedging instruments requires special skills and knowledge of investment techniques that are different than what is required for normal portfolio management. If the Manager uses a hedging instrument at the wrong time or judges market conditions incorrectly, hedging strategies may reduce that Fund's return. A 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 for the future or option. Options trading involves the payment of premiums and has special tax effects on the Funds. There are also special risks in particular hedging strategies. If a covered call written by a Fund is exercised on a security that has increased in value, that Fund will be required to sell the security at the call price and will not be able to realize any profit if the security has increased in value above the call price. The use of forward contracts may reduce the gain that would otherwise result from a change in the relationship between the U.S. dollar and a foreign currency. To limit its exposure in foreign currency exchange contracts, each Fund limits its exposure to the amount of its assets denominated in the foreign currency. Interest rate swaps are subject to credit risks (if the other party fails to meet its obligations) and also to interest rate risks. The Funds could be obligated to pay more under their swap agreements they receive under them, as a result of interest rate changes. These risks are described in greater detail in the Statement of Additional Information. - Derivative Investments. Each Fund (other than Money Fund) can invest in a number of different kinds of "derivative investments." Such Funds may use some types of derivatives for hedging purposes, and may invest in others because they offer the potential for increased income and principal value. In general, a "derivative investment" is a specially- designed investment whose performance is linked to the performance of another investment or security, such as an option, future, index or currency. In the broadest sense, derivative investments include exchange- traded options and futures contracts (please refer to "Hedging"). One risk of investing in derivative investments is that the company issuing the instrument might not pay the amount due on the maturity of the instrument. There is also the risk that the underlying investment or security might not perform the way the Manager expected it to perform. The performance of derivative investments may also be influenced by interest rate changes in the U.S. and abroad. All of these risks can mean that a Fund will realize less income than expected from its investments, or that it can lose part of the value of its investments, which will affect that Fund's share price. Certain derivative investments held by the Funds may trade in the over-the-counter markets and may be illiquid. If that is the case, the Funds' investment in them will be limited, as discussed in "Illiquid and Restricted Securities." Another type of derivative the Funds (other than Money Fund) may invest in is an "index-linked" note. On the maturity of this type of debt security, payment is made based on the performance of an underlying index, rather than based on a set principal amount for a typical note. Another derivative investment such Funds may invest in are currency-indexed securities. These are typically short-term or intermediate-term debt securities. Their value at maturity or the interest rates at which they pay income are determined by the change in value of the U.S. dollar against one or more foreign currencies or an index. In some cases, these securities may pay an amount at maturity based on a multiple of the amount of the relative currency movements. This variety of index security offers the potential for greater income but at a greater risk of loss. Other derivative investments the Funds (other than Money Fund) may invest in include "debt exchangeable for common stock" of an issuer or "equity-linked debt securities" of an issuer. At maturity, the debt security is exchanged for common stock of the issuer or is payable in an amount based on the price of the issuer's common stock at the time of maturity. In either case there is a risk that the amount payable at maturity will be less than the principal amount of the debt (because the price of the issuer's common stock is not as high as was expected). - Portfolio Turnover. A change in the securities held by the Fund is known as "portfolio turnover." The Funds may engage frequently in short-term trading to try to achieve their objectives. High turnover and short-term trading involve correspondingly greater commission expenses and transaction costs for Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund and to a lesser extent, higher transaction costs for Money Fund, Bond Fund, Strategic Bond Fund and High Income Fund. The "Financial Highlights," above show the portfolio turnover for the past fiscal years for each Fund except Growth & Income Fund, which is not expected to exceed a portfolio turnover rate of 200% in the current fiscal year. If any Fund derives 30% or more of its gross income from the sale of securities held less than three months, it may fail to qualify under the tax laws as a regulated investment company (see "Dividends, Capital Gains and Taxes," below). - Short Sales Against-the-Box. In a short sale, the seller does not own the security that is sold, but normally borrows the security to fulfill its delivery obligation. The seller later buys the security to repay the loan, in the expectation that the price of the security will be lower when the purchase is made, resulting in a gain. The Funds may not sell securities short except that each Fund (except Money Fund) may sell securities short in collateralized transactions referred to as "short sales against-the-box." No more than 15% of any Fund's net assets will be held as collateral for such short sales at any one time. Other Investment Restrictions Each of the Funds has certain investment restrictions which, together with its investment objective, are fundamental policies. Under some of those restrictions, each Fund cannot: (1) with respect to 75% of its total assets, invest in securities (except those of the U.S. Government or its agencies or instrumentalities) of any issuer if immediately thereafter, either (a) more than 5% of that Fund's total assets would be invested in securities of that issuer, or (b) that Fund would then own more than 10% of that issuer's voting securities or 10% in principal amount of the outstanding debt securities of that issuer (the latter limitation on debt securities does not apply to Strategic Bond Fund); (2) lend money except in connection with the acquisition of debt securities which a Fund's investment policies and restrictions permit it to purchase; the Funds may also make loans of portfolio securities (see "Loans of Portfolio Securities"); (3) pledge, mortgage or hypothecate any assets to secure a debt; the escrow arrangements which are involved in options trading are not considered to involve such a mortgage, hypothecation or pledge; (4) concentrate investments in any particular industry, other than securities of the U.S. Government or its agencies or instrumentalities (Money Fund, Bond Fund and High Income Fund, only); therefore these Funds will not purchase the securities of issuers primarily engaged in the same industry if more than 25% of the total value of that Fund's assets would (in the absence of special circumstances) consist of securities of companies in a single industry; however, there is no limitation as to concentration of investments by Money Fund in obligations issued by domestic banks, foreign branches of domestic banks (if guaranteed by the domestic parent), savings and loan associations or in obligations issued by the federal government and its agencies and instrumentalities; and (5) deviate from the percentage requirements and other restrictions listed under "Warrants and Rights," and the first paragraph under "Special Risks-Borrowing for Leverage." None of the percentage limitations and restrictions described above and in the Statement of Additional Information for the Funds with respect to writing covered calls, hedging, short sales and derivatives is a fundamental policy. All of the percentage restrictions described above and elsewhere in this Prospectus, other than those described under "Other Investment Techniques and Strategies--Special Risks-Borrowing for Leverage," apply only at the time a Fund purchases a security. A Fund need not dispose of a security merely because the size of the Fund's assets has changed or the security has increased in value relative to the size of the Fund. Money Fund has separately undertaken to exclude savings and loan associations from the exception to the concentration limitation set forth under investment restriction (4), above. There are other fundamental policies discussed in the Statement of Additional Information. The Trustees of the Trust are required to monitor events to identify any irreconcilable conflicts which may arise between the variable life insurance policies and variable annuity contracts that invest in the Funds. Should any conflict arise which ultimately requires that any substantial amount of assets be withdrawn from any Fund, its operating expenses could increase. How the Funds are Managed Organization and History. The Trust was organized in 1984 as a Massachusetts business trust. The Trust is an open-end, diversified management investment company, with an unlimited number of authorized shares of beneficial interest. It consists of nine separate Funds - Money Fund, Bond Fund and Growth Fund, all organized in 1984, High Income Fund, Capital Appreciation Fund and Multiple Strategies Fund, all organized in 1986, Global Securities Fund, organized in 1990, Strategic Bond Fund, organized in 1993 and Growth & Income Fund, which is expected to commence operations in 1995. The Trust is governed by a Board of Trustees, which is responsible for protecting the interests of shareholders under Massachusetts law. The Trustees meet periodically throughout the year to oversee the Funds' activities, review performance, and review the actions of the Manager. "Trustees and Officers of the Trust" in the Statement of Additional Information names the Trustees and provides more information about them and the officers of the Trust. Although the Trust is not required by law to hold annual meetings, it may hold shareholder meetings from time to time on important matters, and shareholders have the right to call a meeting to remove a Trustee or to take other action described in the Trust's Declaration of Trust. The Manager and Its Affiliates. The Funds are managed by the Manager, Oppenheimer Management Corporation, which is responsible for selecting the Funds' investments and handles its day-to-day business. The Manager carries out its duties, subject to the policies established by the Board of Trustees, under Investment Advisory Agreements for each Fund which state the Manager's responsibilities. The Agreements set forth the fees paid by each Fund to the Manager and describe the expenses that each Fund is responsible to pay to conduct its business. The Manager has operated as an investment adviser since 1959. The Manager (including a subsidiary) currently manages investment companies, including other OppenheimerFunds, with assets of more than $29 billion as of December 31, 1994, and with more than 2.4 million shareholder accounts. The Manager is owned by Oppenheimer Acquisition Corp., a holding company that is owned in part by senior officers of the Manager and controlled by Massachusetts Mutual Life Insurance Company, a mutual life insurance company. - Portfolio Managers. The Portfolio Manager of High Income Fund, Bond Fund, Multiple Strategies Fund and Strategic Bond Fund is David P. Negri, joined by Richard H. Rubinstein for Multiple Strategies Fund and by Arthur P. Steinmetz for Strategic Bond Fund. They are the persons principally responsible for the day-to-day management of those Funds since July 1989, January 1990, July 1989 (April 1991 for Mr. Rubinstein) and May 1993, respectively. During the past five years, Messrs. Steinmetz and Negri have also served as officers of other OppenheimerFunds. During the past five years, Mr. Rubinstein has served as an officer of other OppenheimerFunds and was formerly Vice President and Portfolio Manager/Security Analyst for Oppenheimer Capital Corp., an investment adviser. The Portfolio Manager of Global Securities Fund is George Evans. He has been the person principally responsible for the day-to-day management of that Fund since February, 1991. During the past five years, he has also served as an Associate Portfolio Manager for other OppenheimerFunds and formerly served as an international equities portfolio manager/analyst with Brown Brothers Harriman & Co. The Portfolio Manager of the Money Fund is Arthur Zimmer. Since October 1990, he has been the person principally responsible for the day-to-day management of that Fund's portfolio. During the past five years, he has also served as an officer of other OppenheimerFunds and formerly served as Vice President of Hanifen Imhoff Management Company (mutual fund investment adviser). The Portfolio Manager of Growth Fund is Jane Putnam. She has been the person principally responsible for the day-to-day management of that Fund's portfolio since May 1994. During the past five years, Ms. Putnam has also served as an Associate Portfolio Manager for other OppenheimerFunds and formerly served as a portfolio manager and equity research analyst for Chemical Bank. The Portfolio Manager of Capital Appreciation Fund is Paul LaRocco. He has been the person principally responsible for the day-to-day management of that Fund's portfolio since January 1994. During the past five years, he has also served as an Associate Portfolio Manager for other OppenheimerFunds and formerly served as a securities analyst with Columbus Circle Investors, prior to which he was an investment analyst for Chicago Title & Trust Co. The Portfolio Manager of Growth & Income Fund is John Wallace. He will be the person principally responsible for the day-to-day management of that Fund after its inception in 1995. He is a Vice President of the Manager and an officer of other OppenheimerFunds. During the past five years, he has also been a Securities Analyst and Assistant Portfolio Manager for the Manager. Messrs. Negri, Evans, Zimmer and Rubinstein are Vice Presidents of the Manager, Mr. Steinmetz is a Senior Vice President of the Manager, and Ms. Putnam and Mr. LaRocco are Assistant Vice Presidents of the Manager. Each of the Portfolio Managers named above are also Vice Presidents of the Trust. - Fees and Expenses. The monthly management fee payable to the Manager is computed separately on the net assets of each Fund as of the close of business each day. The management fee rates that became effective September 1, 1994 are as follows: (i) for Money Fund: 0.450% of the first $500 million of net assets, 0.425% of the next $500 million, 0.400% of the next $500 million, and 0.375% of net assets over $1.5 billion; (ii) for Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund: 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, and 0.60% of net assets over $800 million; and (iii) for High Income Fund, Bond Fund and Strategic Bond Fund: 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 net assets over $1 billion. The management fee rates in effect prior to September 1, 1994 are contained in note 8 to the Funds' financial statements included in the Statement of Additional Information. During the fiscal year ended December 31, 1994, the management fee (computed on an annualized basis as a percentage of the net assets of all the Funds as of the close of business each day) and the total operating expenses as a percentage of average net assets of each Fund, when restated to reflect the current management fee rates described above and the current limitation on expenses described in the Statement of Additional Information, were as follows:
Total Management Operating Fees Expenses(1) - -------------------------------------------------------------------------------------------- Money Fund .45% .50% High Income Fund .75% .81% Bond Fund .75% .81% Capital Appreciation Fund .75% .80% Growth Fund .75% .81% Multiple Strategies Fund .74% .79% Global Securities Fund .75% .95% Strategic Bond Fund .75% .93% Growth & Income Fund(2) .75% .93% ____________________ (1) This table does not reflect expenses that apply at the separate account level or to related insurance products. (2) Because Growth & Income Fund is a new fund and has not completed a full fiscal year, the expenses shown above are based on amounts estimated to be payable in the current fiscal year, assuming that Growth & Income Fund will have average net assets of $15 million at the end of the current fiscal year.
The Funds pay expenses related to their daily operations, such as custodian fees, Trustees' fees, transfer agency fees, legal and auditing costs. Those expenses are paid out of the Funds' assets and are not paid directly by shareholders. However, those expenses reduce the net asset value of shares, and therefore are indirectly borne by shareholders through their investment. More information about the investment advisory agreement is contained in the Statement of Additional Information. There is also information about the Funds' brokerage policies and practices in "Brokerage Policies of the Funds" in the Statement of Additional Information. That section discusses how brokers and dealers are selected for the Funds' portfolio transactions. When deciding which brokers to use, the Manager is permitted by the investment advisory agreements to consider whether brokers have sold shares of the Funds or any other funds for which the Manager serves as investment adviser. - Shareholder Inquiries. Inquiries by policyowners for Account information are to be directed to the insurance company issuing the Account at the address or telephone number shown in the accompanying Account Prospectus. Performance of the Funds Explanation of Performance Terminology. Money Fund uses the terms "yield" to illustrate its performance. High Income Fund, Bond Fund and Strategic Bond Fund use the terms "yield," "total return," and "average annual total return" to illustrate performance. All the Funds, except Money Fund, use the terms "average annual total return" and "total return" to illustrate their performance. This performance information may be useful to help you see how well your investment has done and to compare it to other funds or market indices, as we have done below. It is important to understand that the Funds' total returns and yields represent past performance and should not be considered to be predictions of future returns or performance. This performance data is described below, but more detailed information about how total returns and yields are calculated is contained in the Statement of Additional Information, which also contains information about other ways to measure and compare the Funds' performance. Each Fund's investment performance will vary over time, depending on market conditions, the composition of the portfolio and expenses. - Yields. Money Fund's "yield" is the income generated by an investment in that Fund over a seven-day period, which is then "annualized." In annualizing, the amount of income generated by the investment during that seven days is assumed to be generated each week over a 52-week period, and is shown as a percentage of the investment. The compounded "effective yield" is calculated similarly, but the annualized income earned by an investment in Money Fund is assumed to be reinvested. The compounded effective yield will therefore be slightly higher than the yield because of the effect of the assumed reinvestment. Yield for High Income Fund, Strategic Bond Fund or Bond Fund will be computed in a standardized manner for mutual funds, by dividing that Fund's net investment income per share earned during a 30-day base period by the maximum offering price (equal to the net asset value) per share on the last day of the period. This yield calculation is compounded on a semi-annual basis, and multiplied by 2 to provide an annualized yield. The Statement of Additional Information describes a dividend yield and a distribution return that may also be quoted for these Funds. - Total Returns. There are different types of total returns used to measure each Fund's performance. Total return is the change in value of a hypothetical investment in the Fund over a given period, assuming that all dividends and capital gains distributions are reinvested in additional shares. The cumulative total return measures the change in value over the entire period (for example, ten years). An average annual total return shows the average rate of return for each year in a period that would produce the cumulative total return over the entire period. However, average annual total returns do not show the Funds' actual year-by-year performance. How Have the Funds Performed? Below is a discussion by the Manager of the Funds' performance during their last fiscal year ended December 31, 1994, followed by a graphical comparison of each Fund's performance, except Money Fund and Growth & Income Fund (which commenced operations after that date) to an appropriate broad-based market index. - Management's Discussion of Performance. During the Funds' fiscal year ended December 31, 1994, the Manager emphasized the following investment strategies and techniques. For High Income Fund, bonds issued by U.S. companies that derive a large percentage of their earnings from Europe were emphasized, together with bonds positioned to benefit from rising commodity prices, notably those issued by companies in the chemicals, industrial metals and forest product sectors. For Bond Fund, intermediate and long-term U.S. government bonds were emphasized. For Capital Appreciation Fund, stocks of well-managed, innovative companies in sectors with high potential were emphasized, including technology, health care and consumer cyclicals, such as specialty retailing. For Growth Fund, consumer and industrial company stocks were emphasized, including financial, technology and health care issues. Multiples Strategies Fund's equity portfolio emphasized technology, health care and industrial issues; its fixed income portfolio emphasized commodity-based industries, telecommunications and media issues. For Global Securities Fund, emerging markets such as Latin America were emphasized, including stocks with strong earnings potential driven by corporate restructurings and the privatization of state-owned industries. For Strategic Bond Fund, corporate bonds in U.S. companies that derive a large percentage of their earnings from Europe were emphasized, foreign fixed-income securities were emphasized in Latin American, Asian and Eastern European countries, and U.S. government securities of a longer term were emphasized. - Comparing each Fund's Performance to the Market. The charts below show the performance of hypothetical $10,000 investments in each Fund (except for Money Fund and Growth & Income Fund) held until December 31, 1994. Performance information does not reflect charges that apply to separate accounts investing in the Funds and is not restated to reflect the increased management fee rates that took effect September 1, 1994. If these charges and expenses were taken into account, performance would be lower. High Income Fund's performance is compared to the performance of the Salomon Brothers High Yield Market Index which is an unmanaged index of below-investment grade (but rated at least BB+/Ba1 by Standard & Poor's or Moody's) U.S. corporate debt obligations, widely-recognized as a measure of the performance of the high-yield corporate bond market. Bond Fund's performance is compared to the performance of the Lehman Brothers Corporate Bond Index, which is an unmanaged index of publicly-issued non- convertible investment grade corporate debt of U.S. issuers, widely recognized as a measure of the U.S. fixed-rate corporate bond market. The performance of Capital Appreciation Fund and Growth Fund is compared to the performance of the S&P 500 Index, a broad-based index of equity securities widely regarded as a general measurement of the performance of the U.S. equity securities market. Multiple Strategies Fund's performance is compared to the S&P 500 Index and the Lehman Brothers Aggregate Bond Index, a broad-based, unmanaged index of U.S. corporate bond issues, U.S. government securities and mortgage-backed securities, widely recognized as a measure of the performance of the domestic debt securities market. Global Securities Fund's performance is compared to the Morgan Stanley World Index, an unmanaged index of issuers listed on the stock exchanges of 20 foreign countries and the U.S., and is widely recognized as a measure of global stock market performance. Strategic Bond Fund's performance is compared to the Lehman Brothers Aggregate Bond Index and the Salomon Brothers World Government Bond Index. The Salomon Brothers World Government Bond Index is an unmanaged index of fixed-rate bonds having a maturity of one year or more, and is widely recognized as a benchmark of fixed income performance on a world-wide basis. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains or transaction costs, and none of the data below shows the effect of taxes. Also, a Fund's performance reflects the effect of that Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for a Fund's performance, it must be noted that the Fund's investments are not limited to the securities in the one index. Moreover, the index performance data does not reflect any assessment of the risk of the investments included in the index. Comparison of Change in Value of $10,000 Hypothetical Investments in High Income Fund Versus Salomon Brothers High Yield Market Index (Graph comparing total return of High Income Fund shares to performance of Salomon Brothers High Yield Market Index) Average Annual Total Return at 12/31/94 (1) 1 year 5 years Life of Fund -3.18% 15.09% 12.47% (1) The inception date of the Fund was 4/30/86. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Bond Fund Versus Lehman Brothers Corporate Bond Index (Graph comparing total return of Bond Fund shares to performance of Lehman Brothers Corporate Bond Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund -1.94% 8.43% 9.78% (1) The inception date of the Fund was 4/3/85. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Capital Appreciation Fund Versus S&P 500 Index (Graph comparing total return of Capital Appreciation Fund shares to performance of S&P 500 Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund -7.59% 11.81% 13.28% (1) The inception date of the Fund was 8/15/86. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Growth Fund Versus S&P 500 Index (Graph comparing total return of Growth Fund shares to performance of S&P 500 Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund 0.97% 7.40% 11.44% (1) The inception date of the Fund was 4/3/85. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Multiple Strategies Fund Versus S&P 500 Index and Lehman Brothers Aggregate Bond Index (Graph comparing total return of Multiple Strategies Fund shares to performance of S&P 500 Index and Lehman Brothers Aggregate Bond Index) Average Annual Total Return at 12/31/94(1) 1 year 5 years Life of Fund -1.95% 7.38% 9.85% (1) The inception date of the Fund was 2/9/87. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Global Securities Fund Versus Morgan Stanley World Index (Graph comparing total return of Global Securities Fund shares to performance of Morgan Stanley World Index) Average Annual Total Return at 12/31/94(1) 1 year Life of Fund -5.72% 11.15% (1) The inception date of the Fund was 11/12/90. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. Comparison of Change in Value of $10,000 Hypothetical Investments in Strategic Bond Fund Versus Lehman Brothers Aggregate Bond Index and Salomon Brothers World Government Bond Index (Graph comparing total return of Strategic Bond Fund to performance of Lehman Brothers Aggregate Bond Index and Salomon Brothers World Government Bond Index) Average Annual Total Return at 12/31/94(1) 1 year Life of Fund -3.78% 0.19% ______________ (1) The inception date of the Fund was 5/3/93. The average annual total returns and the ending account value in the graph reflect reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Graphs are not drawn to same scale. ABOUT YOUR ACCOUNT How to Buy Shares Shares of each Fund are offered only for purchase by Accounts as an investment medium for variable life insurance policies and variable annuity contracts, as described in the accompanying Account Prospectus. The sale of shares will be suspended during any period when the determination of net asset value is suspended and may be suspended by the Board of Trustees whenever the Board judges it in that Fund's best interest to do so. Shares of each Fund are offered at their respective offering price, which (as used in this Prospectus and the Statement of Additional Information) is net asset value (without sales charge). Shares of Growth & Income Fund will not be offered prior to July 1, 1995. All purchase orders are processed at the offering price next determined after receipt by the Trust of a purchase order in proper form. The offering price (and net asset value) is determined as of the close of The New York Stock Exchange, which is normally 4:00 P.M., New York time, but may be earlier on some days. Net asset value per share of each Fund is determined by dividing the value of that Fund's net assets by the number of its shares outstanding. The Board of Trustees has established procedures for valuing each Fund's securities. In general, those valuations are based on market value. Under Rule 2a-7, the amortized cost method is used to value Money Fund's net asset value per share, which is expected to remain fixed at $1.00 per share except under extraordinary circumstances; see "About Your Account - How to Buy Shares - Money Fund Net Asset Valuation" in the Statement of Additional Information for further information. There can be no assurance that Money Fund's net asset value will not vary. Further details are in "About Your Account- How to Buy Shares - Money Fund Net Asset Valuation" in the Statement of Additional Information. How to Sell Shares Payment for shares tendered by an Account for redemption is made ordinarily in cash and forwarded within seven days after receipt by the Trust's transfer agent, Oppenheimer Shareholder Services (the "Transfer Agent"), of redemption instructions in proper form, except under unusual circumstances as determined by the Securities and Exchange Commission. The Trust understands that payment to the Account owner will be made in accordance with the terms of the accompanying Account Prospectus. The redemption price will be the net asset value next determined after the receipt by the Transfer Agent of a request in proper form. The market value of the securities in the portfolio of the Funds is subject to daily fluctuations and the net asset value of the Funds' shares (other than shares of the Money Fund) will fluctuate accordingly. Therefore, the redemption value may be more or less than the investor's cost. Dividends, Capital Gains And Taxes Dividends of the Money Fund. The Trust intends to declare Money Fund's dividends from its net investment income on each day the New York Stock Exchange is open for business. Such dividends will be payable on shares held of record at the time of the previous determination of net asset value. Daily dividends accrued since the prior dividend payment will be paid to shareholders monthly as of a date selected by the Board of Trustees. Money Fund's net income for dividend purposes consists of all interest income accrued on portfolio assets, less all expenses of that Fund for such period. Accrued market discount is included in interest income; amortized market premium is treated as an expense. Although distributions from net realized gains on securities, if any, will be paid at least once each year, and may be made more frequently, Money Fund does not expect to realize long-term capital gains, and therefore does not contemplate payment of any capital gains distribution. Distributions from net realized gains will not be distributed unless Money Fund's capital loss carry forwards, if any, have been used or have expired. Money Fund seeks to maintain a net asset value of $1.00 per share for purchases and redemptions. To effect this policy, under certain circumstances the Money Fund may withhold dividends or make distributions from capital or capital gains (see "Dividends, Capital Gains and Taxes" in the Statement of Additional Information). Dividends and Distributions of High Income Fund, Bond Fund, Strategic Bond Fund, Growth & Income Fund and Multiple Strategies Fund. The Trust intends to declare High Income Fund, Bond Fund, Strategic Bond Fund, Growth & Income Fund and Multiple Strategies Fund dividends quarterly, payable in March, June, September and December. Dividends and Distributions of Capital Appreciation Fund, Growth Fund and Global Securities Fund. The Trust intends to declare Capital Appreciation Fund, Growth Fund and Global Securities Fund dividends on an annual basis. Capital Gains. Any Fund (other than Money Fund) may make a supplemental distribution annually in December out of any net short-term or long-term capital gains derived from the sale of securities, premiums from expired calls written by the Fund, and net profits from hedging transactions. Each such Fund may also make a supplemental distribution of capital gains and ordinary income following the end of its fiscal year. All dividends and capital gains distributions paid on shares of any of the Funds are automatically reinvested in additional shares of that Fund at net asset value determined on the distribution date. There are no fixed dividend rates and there can be no assurance as to payment of any dividends or the realization of any capital gains. Tax Treatment to the Account As Shareholder. Dividends paid by each Fund from its ordinary income and distributions of each Fund's net realized short-term or long-term capital gains are includable in gross income of the Accounts holding such shares. The tax treatment of such dividends and distributions depends on the tax status of that Account. Tax Status of the Funds. If the Funds qualify as "regulated investment companies" under the Internal Revenue Code, the Trust will not be liable for Federal income taxes on amounts paid as dividends and distributions from any of the Funds. The Funds did qualify during their last fiscal year and the Trust intends that they will qualify in current and future years. However, the Code contains a number of complex tests relating to qualification which any Fund might not meet in any particular year (see, e.g., "Other Investment Techniques and Strategies - Portfolio Turnover"). If any Fund does not so qualify, it would be treated for tax purposes as an ordinary corporation and would receive no tax deduction for payments made to shareholders of that Fund. The above discussion relates solely to Federal tax laws. This discussion is not exhaustive and a qualified tax adviser should be consulted. APPENDIX A - DESCRIPTION OF TERMS Some of the terms used in the Prospectus and the Statement of Additional Information are described below: Bank obligations include certificates of deposit which are negotiable certificates evidencing the indebtedness of a commercial bank to repay funds deposited with it for a definite period of time (usually 14 days to one year) at a stated interest rate. Bankers' acceptances are credit instruments evidencing the obligation of a bank to pay a draft which has been drawn on it by a customer; these instruments reflect the obligation both of the bank and of the drawer to pay the face amount of the instrument upon maturity. Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Bank notes are short-term direct credit obligations of the issuing bank or bank holding company. Commercial paper consists of short-term (usually 1 to 270 days) unsecured promissory notes issued by corporations in order to finance their current operations. Variable rate master demand notes are obligations that permit the investment of fluctuating amounts at varying rates of interest pursuant to direct arrangement between the holder and the borrower. The holder has the right to increase the amount under the note at any time up to the face amount, or to decrease the amount borrowed, and the borrower may repay up to the face amount of the note without penalty. Corporate obligations are bonds and notes issued by corporations and other business organizations, including business trusts, in order to finance their long-term credit needs. Letters of credit are obligations by the issuer (a bank or other person) to honor drafts or other demands for payment upon compliance with specified conditions. Securities issued or guaranteed by the United States Government or its agencies or instrumentalities include issues of the United States Treasury, such as bills, certificates of indebtedness, notes and bonds, and issues of agencies and instrumentalities established under the authority of an act of Congress. Such agencies and instrumentalities include, but are not limited to, Bank for Cooperatives, Federal Financing Bank, Federal Home Loan Bank, Federal Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage Association and Tennessee Valley Authority. Issues of the United States Treasury are direct obligations of the United States Government. Issues of agencies or instrumentalities are (i) guaranteed by the United States Treasury, or (ii) supported by the issuing agency's or instrumentality's right to borrow from the United States Treasury, or (iii) supported by the issuing agency's or instrumentality's own credit. APPENDIX B - DESCRIPTION OF SECURITIES RATINGS This is a description of (i) the two highest rating categories for Short Term Debt and Long Term Debt by the Rating Organizations referred to under "Investment Objectives and Policies -- Money Fund", and (ii) additional rating categories that apply principally to investments by High Income Fund, Strategic Bond Fund and Bond Fund. The rating descriptions are based on information supplied by the Rating Organizations to subscribers. Short Term Debt Ratings. Moody's Investors Service, Inc. ("Moody's"): The following rating designations for commercial paper (defined by Moody's as promissory obligations not having original maturity in excess of nine months), are judged by Moody's to be investment grade, and indicate the relative repayment capacity of rated issuers: Prime-1: Superior capacity for repayment. Capacity will normally be evidenced by the following characteristics: (a) leveling market positions in well-established industries; (b) high rates of return on funds employed; (c) conservative capitalization structures with moderate reliance on debt and ample asset protection; (d) broad margins in earning coverage of fixed financial charges and high internal cash generation; and (e) well established access to a range of financial markets and assured sources of alternate liquidity. Prime-2: Strong capacity for repayment. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Standard & Poor's Corporation ("S&P"): The following ratings by S&P for commercial paper (defined by S&P as debt having an original maturity of no more than 365 days) assess the likelihood of payment: A-1: Strong capacity for timely payment. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation. A-2: Satisfactory capacity for timely payment. However, the relative degree of safety is not as high as for issues designated "A-1". Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following short-term ratings to debt obligations that are payable on demand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes: F-1+: Exceptionally strong credit quality; the strongest degree of assurance for timely payment. F-1: Very strong credit quality; assurance of timely payment is only slightly less in degree than issues rated "F-1+". F-2: Good credit quality; satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned "F-1+" or "F-1" ratings. Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial paper (defined by Duff & Phelps as obligations with maturities, when issued, of under one year), asset-backed commercial paper, and certificates of deposit (the ratings cover all obligations of the institution with maturities, when issued, of under one year, including bankers' acceptance and letters of credit): Duff 1+: Highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury short-term obligations. Duff 1: Very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Duff 1-: High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. Duff 2: Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings, including commercial paper (with maturities up to 12 months), are as follows: A1+: Obligations supported by the highest capacity for timely repayment. A1: Obligations supported by a very strong capacity for timely repayment. A2: Obligations supported by a strong capacity for timely repayment, although such capacity may be susceptible to adverse changes in business, economic, or financial conditions. Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to commercial paper, certificates of deposit, unsecured notes, and other securities having a maturity of one year or less. TBW-1: The highest category; indicates the degree of safety regarding timely repayment of principal and interest is very strong. TBW-2: The second highest rating category; while the degree of safety regarding timely repayment of principal and interest is strong, the relative degree of safety is not as high as for issues rated "TBW-1". Long Term Debt Ratings. These rating categories apply principally to investments by High Income Fund, Strategic Bond Fund and Bond Fund. For Money Fund only, the two highest rating categories of each Rating Organization are relevant for securities purchased with a remaining maturity of 397 days or less, or for rating issuers of short-term obligations. Moody's: Bonds (including municipal bonds) are rated as follows: Aaa: Judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong positions of such issues. Aa: Judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in "Aaa" securities or fluctuations of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in "Aaa" securities. A: Possess many favorable investment attributes and are to be considered as upper-medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa: Considered medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well. Ba: Judged to have speculative elements; their future cannot be considered well-assured. Often the protection of interest and principal payments may be very moderate and not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B: Bonds rated "B" generally lack characteristics of desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa: Of poor standing and may be in default or there may be present elements of danger with respect to principal or interest. Ca: Represent obligations which are speculative in a high degree and are often in default or have other marked shortcomings. C: Bonds rated "C" can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers "1", "2" and "3" in each generic rating classification from "Aa" through "B" in its corporate bond rating system. The modifier "1" indicates that the security ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates that the issue ranks in the lower end of its generic rating category. Standard & Poor's: Bonds are rated as follows: AAA: The highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA: A strong capacity to pay interest and repay principal and differ from "AAA" rated issues only in small degree. A: Have a strong capacity to pay principal and interest, although they are somewhat more susceptible to adverse effects of change in circumstances and economic conditions. BBB: Regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this capacity than for bonds in the "A" category. BB, B, CCC, CC: Regarded, on balance, as predominantly speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. "BB" indicates the lowest degree of speculation and"CC" the highest degree. While such bonds will likely have some equality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. C, D: Bonds on which no interest is being paid are rated "C." Bonds rated "D" are in default and payment of interest and/or repayment of principal is in arrears. Fitch: AAA: Considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events. AA: Considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated "AAA". Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+". Duff & Phelps: AAA: The highest credit quality. The risk factors are negligible, being only slightly more than the risk-free U.S. Treasury debt. AA: High credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Plus (+) and minus (-) signs are used in the "AA" category to indicate the relative position of a credit within that category. IBCA: Long-term obligations (with maturities of more than 12 months) are rated as follows: AAA: The lowest expectation for investment risk. Capacity for timely repayment of principal and interest is substantial such that adverse changes in business, economic, or financial conditions are unlikely to increase investment risks significantly. AA: A very low expectation for investment risk. Capacity for timely repayment of principal and interest is substantial. Adverse changes in business, economic, or financial conditions may increase investment risk albeit not very significantly. A plus (+) or minus (-) sign may be appended to a long term rating to denote relative status within a rating category. TBW: TBW issues the following ratings for companies. These ratings assess the likelihood of receiving payment of principal and interest on a timely basis and incorporate TBW's opinion as to the vulnerability of the company to adverse developments, which may impact the market's perception of the company, thereby affecting the marketability of its securities. A: Possesses an exceptionally strong balance sheet and earnings record, translating into an excellent reputation and unquestioned access to its natural money markets. If weakness or vulnerability exists in any aspect of the company's business, it is entirely mitigated by the strengths of the organization. A/B: The company is financially very solid with a favorable track record and no readily apparent weakness. Its overall risk profile, while low, it not quite as favorable as for companies in the highest rating category. APPENDIX TO PROSPECTUS Graphic material included in Prospectus of Oppenheimer Variable Account Funds: "Comparison of Total Return of Oppenheimer Variable Account Funds with Broad-Based Indices - Changes in Value of a $10,000 Hypothetical Investment" Linear graphs will be included in the Prospectus of Oppenheimer Variable Account Funds (the "Funds") depicting the initial account value and subsequent account value of a hypothetical $10,000 investment in shares of the Funds for the life of each Fund (except Oppenheimer Money Fund and Oppenheimer Growth & Income Fund) and comparing such values with the same investments over the same time periods in the Broad-Based Indices. Set forth below are the relevant data points that will appear on the linear graphs. Additional information with respect to the foregoing, including a description of the Broad-Based Indices, is set forth in the Prospectus under "How Have the Funds Performed? - Management's Discussion of Performance."
Salomon Brothers Fiscal High Yield Year Ended High Income Fund Market Index 04/30/86(1) $10,000 $10,000 12/31/86 $10,473 $10,510 12/31/87 $11,318 $10,990 12/31/88 $13,081 $12,664 12/31/89 $13,715 $13,012 12/31/90 $14,352 $12,096 12/31/91 $19,220 $16,851 12/31/92 $22,664 $19,859 12/31/93 $28,632 $24,878 12/31/94 $27,722 $24,569 Lehman Brothers Fiscal Corporate Year Ended Bond Fund Bond Index 04/03/85 $10,000 $10,000 12/31/85 $11,882 $11,819 12/31/86 $13,084 $13,770 12/31/87 $13,415 $14,112 12/31/88 $14,618 $15,352 12/31/89 $16,565 $17,526 12/31/90 $17,877 $18,811 12/31/91 $21,028 $22,325 12/31/92 $22,395 $24,294 12/31/93 $25,315 $27,209 12/31/94 $24,825 $26,139 Fiscal Capital Year Ended Appreciation Fund S&P 500 Index 08/15/86(1) $10,000 $10,000 12/31/86 $ 9,835 $ 9,684 12/31/87 $11,245 $10,192 12/31/88 $12,754 $11,880 12/31/89 $16,269 $15,638 12/31/90 $13,533 $15,152 12/31/91 $20,938 $19,758 12/31/92 $24,167 $21,261 12/31/93 $30,770 $23,400 12/31/94 $28,434 $23,706 Fiscal Year Ended Growth Fund S&P 500 Index 04/30/85 $10,000 $10,000 12/31/85 $10,950 $12,076 12/31/86 $12,894 $14,331 12/31/87 $13,322 $15,083 12/31/88 $16,265 $17,581 12/31/89 $20,101 $23,141 12/31/90 $18,450 $22,422 12/31/91 $23,163 $29,238 12/31/92 $26,528 $31,463 12/31/93 $28,451 $34,668 12/31/94 $28,726 $35,081 Lehman Brothers Fiscal Multiple Aggregate Year Ended Strategies Fund S&P 500 Index Bond Index 02/09/87(1) $10,000 $10,000 $10,000 12/31/87 $10,397 $ 8,923 $10,063 12/31/88 $12,700 $10,401 $10,857 12/31/89 $14,701 $13,690 $12,434 12/31/90 $14,421 $13,265 $13,549 12/31/91 $16,941 $17,297 $15,716 12/31/92 $18,463 $18,613 $16,879 12/31/93 $21,408 $20,486 $18,525 12/31/94 $20,991 $20,754 $17,984 Morgan Fiscal Global Stanley Year Ended Securities Fund World Index 11/12/90(1) $10,000 $10,000 12/31/90 $10,040 $10,211 12/31/91 $10,380 $12,148 12/31/92 $ 9,642 $11,582 12/31/93 $16,423 $14,261 12/31/94 $15,483 $14.985 Lehman Salomon Brothers Brothers World Fiscal Strategic Aggregate Government Year Ended Bond Fund Bond Index Bond Index 05/03/93(1) $10,000 $10,000 $10,000 12/31/93 $10,425 $10,453 $10,426 12/31/94 $10,032 $10,147 $10,671 ________________________ (1) Commencement of operations.
Oppenheimer Variable Account Funds 3410 South Galena Street Denver, Colorado 80231 1-800-525-7048 Investment Adviser Oppenheimer Management Corporation Two World Trade Center New York, New York 10048-0203 Transfer Agent Oppenheimer Shareholder Services P.O. Box 5270 Denver, Colorado 80217 Custodian of Portfolio Securities The Bank of New York One Wall Street New York, New York 10015 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson, Adams & Wolf, P.C. 1600 Broadway Denver, Colorado 80202 No dealer, broker, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus or the Statement of Additional Information, and if given or made, such information and representations must not be relied upon as having been authorized by the Fund, Oppenheimer Management Corporation or any affiliate thereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any state to any person to whom it is unlawful to make such an offer in such state. PR0600.001.0495 Oppenheimer Variable Account Funds 3410 South Galena Street, Denver, Colorado 80231 1-800-525-7048 Statement of Additional Information dated May 1, 1995. OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is an investment company consisting of nine separate Funds (the "Funds"): Oppenheimer Money Fund ("Money Fund") Oppenheimer High Income Fund ("High Income Fund") Oppenheimer Bond Fund ("Bond Fund") Oppenheimer Capital Appreciation Fund ("Capital Appreciation Fund") Oppenheimer Growth Fund ("Growth Fund") Oppenheimer Multiple Strategies Fund ("Multiple Strategies Fund") Oppenheimer Growth & Income Fund ("Growth & Income Fund") Oppenheimer Global Securities Fund ("Global Securities Fund") Oppenheimer Strategic Bond Fund ("Strategic Bond Fund") Shares of the Funds are sold only to provide benefits under variable life insurance policies and variable annuity contracts (collectively the "Accounts"), as described in the Account Prospectus. This Statement of Additional Information is not a Prospectus. This document contains additional information about the Fund and supplements information in the Prospectus dated May 1, 1995. It should be read together with the Trust's Prospectus, which may be obtained by writing to the Funds' Transfer Agent, Oppenheimer Shareholder Services, at P.O. Box 5270, Denver, Colorado 80217, or by calling the Transfer Agent at the toll-free number shown above, and the Account Prospectus. TABLE OF CONTENTS Page About the Funds Investment Objectives and Policies 2 Investment Policies and Strategies 2 Other Investment Techniques and Strategies 10 Other Investment Restrictions 19 How the Funds are Managed 20 Organization and History 20 Trustees and Officers of the Trust 20 The Manager and Its Affiliates 25 Brokerage Policies of the Funds 27 Performance of the Funds 29 About Your Account How to Buy Shares 32 Dividends, Capital Gains and Taxes 34 Additional Information About the Funds 35 Financial Information About the Funds Independent Auditors' Report 36 Financial Statements 37 Appendix A: Industry Classifications A-1 ABOUT THE FUNDS Investment Objectives and Policies Investment Policies and Strategies. The investment objectives and policies of each of the Funds are described in the Prospectus. Set forth below is supplemental information about those policies. Certain capitalized terms used in this Additional Statement are defined in the Prospectus. - Money Fund. The Prospectus describes "Eligible Securities" in which Money Fund may invest and indicates that if a security's rating is downgraded, the Manager and/or the Board may have to reassess the security's credit risk. If a security has ceased to be a First Tier Security, the Manager will promptly reassess whether the security continues to present "minimal credit risk." If the Manager becomes aware that any Rating Organization has downgraded its rating of a Second Tier Security or rated an unrated security below its second highest rating category, the Trust's Board of Trustees shall promptly reassess whether the security presents minimal credit risk and whether it is in Money Fund's best interests to dispose of it; but if Money Fund disposes of the security within 5 days of Oppenheimer Management Corporation (the "Manager") learning of the downgrade, the Manager will provide the Board with subsequent notice of such downgrade. If a security is in default, or ceases to be an Eligible Security, or is determined no longer to present minimal credit risks, the Board must determine whether it would be in Money Fund's best interests to dispose of the security. The Rating Organizations currently designated as such by the Securities and Exchange Commission ("SEC") are Standard & Poor's Corporation, Moody's Investors Services, Inc., Fitch Investors Services, Inc., Duff & Phelps, Inc., IBCA Limited and its affiliate, IBCA, Inc., and Thomson BankWatch, Inc. See Appendix B to the Prospectus for a description of the rating categories of the Rating Organizations. - Time Deposits. The Fund may invest in fixed time deposits, which are non-negotiable deposits in a bank for a specified period of time at a stated interest rate, whether or not subject to withdrawal penalties; however, such deposits which are subject to such penalties, other than deposits maturing in less than 7 days, are subject to the 10% investment limitation for illiquid securities set forth in "Other Investment Techniques and Strategies - Illiquid and Restricted Securities" in the Prospectus. - Floating Rate/Variable Rate Notes. Money Fund may invest in instruments with floating or variable interest rates. The interest rate on a floating rate obligation is based on a stated prevailing market rate, such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, the rate of return on commercial paper or bank certificates of deposit, or some other standard, and is adjusted automatically each time such market rate is adjusted. The interest rate on a variable rate obligation is also based on a stated prevailing market rate but is adjusted automatically at a specified interval of no less than one year. Some variable rate or floating rate obligations in which Money Fund may invest have a demand feature entitling the holder to demand payment at an amount approximately equal to amortized cost or the principal amount thereof plus accrued interest at any time, or at specified intervals not exceeding one year. These notes may or may not be backed by bank letters of credit. Variable rate demand notes may include master demand notes which are obligations that permit Money Fund to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between Money Fund, as lender, and the borrower. The interest rates on these notes fluctuate from time to time. The issuer of such obligations normally has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the obligations plus accrued interest upon a specified number of days' notice to the holders of such obligations. Generally, the changes in the interest rate on such securities reduce the fluctuation in their market value. As interest rates decrease or increase, the potential for capital appreciation or depreciation is less than that for fixed-rate obligations of the same maturity. Because these obligations are direct lending arrangements between the lender and the borrower, it is not contemplated that such instruments generally will be traded, and there generally is no established secondary market for these obligations, although they are redeemable at face value. Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, Money Fund's right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. Such obligations frequently are not rated by credit rating agencies and Money Fund may invest in obligations which are not so rated only if the Manager determines that at the time of investment the obligations are of comparable quality to the other obligations in which Money Fund may invest. The Manager, on behalf of Money Fund, will consider on an ongoing basis the creditworthiness of the issuers of the floating and variable rate obligations in Money Fund's portfolio. There is no limit on the amount of the Money Fund's assets that may be invested in floating rate and variable rate obligations. Floating rate or variable rate obligations which do not provide for recovery of principal and interest within seven days' notice will be subject to the limitations applicable to illiquid securities described in "Other Investment Techniques and Strategies -Illiquid and Restricted Securities" in the Prospectus. - Master Demand Notes. Master demand notes are corporate obligations that permit the investment of fluctuating amounts by Money Fund at varying rates of interest pursuant to direct arrangements between Money Fund, as lender, and the corporate borrower that issues the note. These notes permit daily changes in the amounts borrowed. Money Fund has the right to increase the amount under the note at any time up to the full amount provided by the note agreement, or to decrease the amount. The borrower may repay up to the full amount of the note at any time without penalty. It is not generally contemplated that master demand notes will be traded because they are direct lending arrangements between the lender and the borrower. There is no secondary market for these notes, although they are redeemable and thus immediately repayable by the borrower at face value, plus accrued interest, at any time. Accordingly, Money Fund's right to redeem is dependent upon the ability of the borrower to pay principal and interest on demand. In evaluating the master demand arrangements, the Manager considers the earning power, cash flow, and other liquidity ratios of the issuer. If they are not rated, Money Fund may invest in them only if, at the time of an investment, they are Eligible Securities. The Manager will continuously monitor the borrower's financial ability to meet all of its obligations because Money Fund's liquidity might be impaired if the borrower were unable to pay principal and interest on demand. - Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund. The market value of fixed income securities in which Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund may invest generally will be affected by changes in the level of interest rates. An increase in interest rates will tend to reduce the market value of fixed income investments, and a decline in interest rates will tend to increase their value. In order to take advantage of differences in securities prices and yields or of fluctuations in interest rates, consistent with their respective investment objectives, these Funds may trade for short-term profits. - High Yield Securities. As stated in the Prospectus, the corporate debt in which High Income Fund and Strategic Bond Fund will principally invest may be in the lower rating categories. Risks of high yield securities include: (i) limited liquidity and secondary market support, (ii) substantial market price volatility resulting from changes in prevailing interest rates, (iii) subordination to the prior claims of banks and other senior lenders, (iv) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates which may cause the Fund to invest premature redemption proceeds in lower yielding portfolio securities, (v) the possibility that earnings of the issuer may be insufficient to meet its debt service, and (vi) the issuer's low creditworthiness and potential for insolvency during periods of rising interest rates and economic downturn. As a result of the limited liquidity of high yield securities, their prices have at times experienced significant and rapid decline when a substantial number of holders decided to sell. A decline is also likely in the high yield bond market during an economic downturn. An economic downturn or an increase in interest rates could severely disrupt the market for high yield bonds and adversely affect the value of outstanding bonds and the ability of the issuers to repay principal and interest. In addition, there have been several Congressional attempts to limit the use of tax and other advantages of high yield bonds which, if enacted, could adversely affect the value of these securities and the net asset value of these two Funds. For example, federally-insured savings and loan associations have been required to divest their investments in high yield bonds. - Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund, Strategic Bond Fund and Global Securities Fund. The investment risks and rewards of certain of the investment policies of these six Funds are discussed below. - Securities of Growth-Type Companies. Capital Appreciation Fund, Growth Fund and Global Securities Fund may emphasize securities of "growth-type" companies. Such issuers typically are those whose goods or services have relatively favorable long-term prospects for increasing demand, or ones which develop new products, services or markets and normally retain a relatively large part of their earnings for research, development and investment in capital assets. They may include companies in the natural resources fields or those developing industrial applications for new scientific knowledge having potential for technological innovation, such as nuclear energy, oceanography, business services and new customer products. - Small, Unseasoned Companies. Each of these six Funds may invest in securities of small unseasoned companies. These are companies that have been in operation for less than three years, even after including the operations of any of their predecessors. Securities of these companies may have a limited liquidity (which means that a Fund may have difficulty selling them at an acceptable price when it wants to) and the price of those securities may be volatile. - Domestic Securities. Investments by Strategic Bond Fund, Growth & Income Fund and Multiple Strategies Fund in fixed-income securities issued by domestic corporations may include participation interests, asset-backed securities and other debt obligations (bonds, debentures, notes, mortgage-backed securities and CMOs) together with preferred stocks. - Investment Policies - Collateralized Securities. Each of these Funds may invest in the collaterized securities described below. High Income Fund, Bond Fund and Strategic Bond Fund are most likely to make such investments. - Asset-Backed Securities. The value of an asset-backed security is affected by changes in the market's perception of the asset backing the security, the creditworthiness of the servicing agent for the loan pool, the originator of the loans, or the financial institution providing any credit enhancement, and is also affected if any credit enhancement has been exhausted. The risks of investing in asset-backed securities are ultimately dependent upon payment of consumer loans by the individual borrowers. As a purchaser of an asset-backed security, the Fund would generally have no recourse to the entity that originated the loans in the event of default by a borrower. The underlying loans are subject to prepayments, which shorten the weighted average life of asset-backed securities and may lower their return, in the same manner as described above for prepayments of a pool of mortgage loans underlying mortgage-backed securities. - Mortgage-Backed Securities. These securities represent participation interests in pools of residential mortgage loans which may or may not be guaranteed by agencies or instrumentalities of the U.S. Government. Such securities differ from conventional debt securities which generally provide for periodic payment of interest in fixed or determinable amounts (usually semi-annually) with principal payments at maturity or specified call dates. Mortgage-backed securities may be backed by the full faith and credit of the U.S. Treasury (e.g., direct pass-through certificates of Government National Mortgage Association); some are supported by the right of the issuer to borrow from the U.S. Government (e.g., obligations of Federal Home Loan Mortgage Corporation); and some are backed by only the credit of the issuer itself. Those guarantees do not extend to the value or yield of the mortgage-backed securities themselves or to the net asset value of the Fund's shares. Any of those government agencies may also issue collateralized mortgage-backed obligations, discussed below. The yield on mortgage-backed securities is based on the average expected life of the underlying pool of mortgage loans. The actual life of any particular pool will be shortened by any unscheduled or early payments of principal and interest. Principal prepayments generally result from the sale of the underlying property or the refinancing or foreclosure of underlying mortgages. The occurrence of prepayments is affected by a wide range of economic, demographic and social factors and, accordingly, it is not possible to predict accurately the average life of a particular pool. Yield on such pools is usually computed by using the historical record of prepayments for that pool, or, in the case of newly-issued mortgages, the prepayment history of similar pools. The actual prepayment experience of a pool of mortgage loans may cause the yield realized by the Fund to differ from the yield calculated on the basis of the expected average life of the pool. Prepayments tend to increase during periods of falling interest rates, while during periods of rising interest rates prepayments will most likely decline. When prevailing interest rates rise, the value of a pass-through security may decrease as do the values of other debt securities, but, when prevailing interest rates decline, the value of a pass-through security is not likely to rise to the extent that the values of other debt securities rise, because of the prepayment feature of pass-through securities. The Fund's reinvestment of scheduled principal payments and unscheduled prepayments it receives may occur at times when available investments offer higher or lower rates than the original investment, thus affecting the yield of the Fund. Monthly interest payments received by the Fund have a compounding effect which may increase the yield to the Fund more than debt obligations that pay interest semi-annually. Because of those factors, mortgage-backed securities may be less effective than Treasury bonds of similar maturity at maintaining yields during periods of declining interest rates. The Fund may purchase mortgage-backed securities at a premium or at a discount. Accelerated prepayments adversely affect yields for pass-through securities purchased at a premium (i.e., at a price in excess of their principal amount) and may involve additional risk of loss of principal because the premium may not have been fully amortized at the time the obligation is repaid. The opposite is true for pass- through securities purchased at a discount. The Fund may purchase mortgage-backed securities at a premium or at a discount. The Fund may invest in "stripped" mortgage backed securities, in which the principal and interest portions of the security are separated and sold. Stripped mortgage-backed securities usually have at least two classes each of which receives different proportions of interest and principal distributions on the underlying pool of mortgage assets. One common variety of stripped mortgage-backed security has one class that receives some of the interest and most of the principal, while the other class receives most of the interest and remainder of the principal. In some cases, one class will receive all of the interest (the "interest-only" or "IO" class), while the other class will receive all of the principal (the "principal-only" or "PO" class). Interest only securities are extremely sensitive to interest rate changes, and prepayments of principal on the underlying mortgage assets. An increase in principal payments or prepayments will reduce the income available to the IO security. In other types of CMOs, the underlying principal payments may apply to various classes in a particular order, and therefore the value of certain classes or "tranches" of such securities may be more volatile that the value of the pool as a whole, and losses may be more severe than on other classes. - Collateralized Mortgage-Backed Obligations ("CMOs"). CMOs are fully-collateralized bonds that are the general obligations of the issuer thereof, either the U.S. Government, a U.S. Government instrumentality, or a private issuer. Such bonds generally are secured by an assignment to a trustee (under the indenture pursuant to which the bonds are issued) of collateral consisting of a pool of mortgages. Payments with respect to the underlying mortgages generally are made to the trustee under the indenture. Payments of principal and interest on the underlying mortgages are not passed through to the holders of the CMOs as such (i.e., the character of payments of principal and interest is not passed through, and therefore payments to holders of CMOs attributable to interest paid and principal repaid on the underlying mortgages do not necessarily constitute income and return of capital, respectively, to such holders), but such payments are dedicated to payment of interest on and repayment of principal of the CMOs. CMOs often are issued in two or more classes with different characteristics such as varying maturities and stated rates of interest. Because interest and principal payments on the underlying mortgages are not passed through to holders of CMOs, CMOs of varying maturities may be secured by the same pool of mortgages, the payments on which are used to pay interest on each class and to retire successive maturities (known as "tranches") in sequence. Unlike other mortgage-backed securities (discussed above), CMOs are designed to be retired as the underlying mortgages are repaid. In the event of prepayment on such mortgages, the class of CMO first to mature generally will be paid down. Therefore, although in most cases the issuer of CMOs will not supply additional collateral in the event of such prepayment, there will be sufficient collateral to secure CMOs that remain outstanding. - Participation Interests. Strategic Bond Fund, Global Securities Fund, High Income Fund, Multiple Strategies Fund and Growth & Income Fund may invest in participation interests, subject to the limitation, described in "Illiquid and Restricted Securities" in the Prospectus, on investments by the Fund in illiquid investments. Participation interests provide the Fund an undivided interest in a loan made by the issuing financial institution in the proportion that the Fund's participation interest bears to the total principal amount of the loan. It is currently intended that no more than 5% of the net assets of Multiple Strategies Fund, Growth & Income Fund or Strategic Bond Fund can be invested in participation interests of the same issuing bank. Participation interests are primarily dependent upon the creditworthiness of the borrowing corporation, which is obligated to make payments of principal and interest on the loan, and there is a risk that such borrowers may have difficulty making payments. In the event the borrower fails to pay scheduled interest or principal payments, the Fund could experience a reduction in its income and might experience a decline in the net asset value of its shares. In the event of a failure by the financial institution to perform its obligation in connection with the participation agreement, the Fund might incur certain costs and delays in realizing payment or may suffer a loss of principal and/or interest. - Foreign Securities. The obligations of foreign governmental entities may or may not be supported by the full faith and credit of a foreign government. Obligations of supranational entities include those of international organizations designated or supported by governmental entities to promote economic reconstruction or development and of international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and Development (the World Bank), the European Coal and Steel Community, the Asian Development Bank and the Inter-American Development Bank. The governmental members, or "stockholders," usually make initial capital contributions to the supranational entity and in many cases are committed to make additional capital contributions if the supranational entity is unable to repay its borrowings. Each supranational entity's lending activities are limited to a percentage of its total capital (including "callable capital" contributed by members at the entity's call), reserves and net income. There is no assurance that foreign governments will be able or willing to honor their commitments. Investing in foreign securities involves considerations and possible risks not typically associated with investing in securities in the U.S. The values of foreign securities will be affected by changes in currency rates or exchange control regulations or currency blockage, application of foreign tax laws, including withholding taxes, changes in governmental administration or economic or monetary policy (in the U.S. or abroad) or changed circumstances in dealings between nations. Costs will be incurred in connection with conversions between various currencies. Foreign brokerage commissions are generally higher than commissions in the U.S., and foreign securities markets may be less liquid, more volatile and less subject to governmental regulation than in the U.S. Investments in foreign countries could be affected by other factors not generally thought to be present in the U.S., including expropriation or nationalization, confiscatory taxation and potential difficulties in enforcing contractual obligations, and could be subject to extended settlement periods. Because each Fund, other than Money Fund, may purchase securities denominated in foreign currencies, a change in the value of any such currency against the U.S. dollar will result in a change in the U.S. dollar value of each Fund's assets and each Fund's income available for distribution. In addition, although a portion of each Fund's investment income may be received or realized in foreign currencies, the Fund will be required to compute and distribute its income in U.S. dollars, and absorb the cost of currency fluctuations. High Income Fund, Strategic Bond Fund, Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund may engage in foreign currency exchange transactions for hedging purposes to attempt to protect against changes in future exchange rates. See "Hedging - Forward Contracts," below. The values of foreign investments and the investment income derived from them may also be affected unfavorably by changes in currency exchange control regulations. Although each Fund, other than Money Fund, will invest only in securities denominated in foreign currencies that at the time of investment do not have significant government- imposed restrictions on conversion into U.S. dollars, there can be no assurance against subsequent imposition of currency controls. In addition, the values of foreign securities will fluctuate in response to changes in U.S. and foreign interest rates. Investments in foreign securities offer potential benefits not available from investments solely in securities of domestic issuers by offering the opportunity to invest in foreign issuers that appear to offer growth potential, or in foreign countries with economic policies or business cycles different from those of the U.S., or to reduce fluctuations in portfolio value by taking advantage of foreign stock markets that do not move in a manner parallel to U.S. markets. From time to time, U.S. government policies have discouraged certain investments abroad by U.S. investors, through taxation or other restrictions, and it is possible that such restrictions could be reimposed. - Warrants and Rights. As described in the Prospectus, each Fund other than Money Fund may invest in warrants and rights. Warrants basically are options to purchase equity securities at set prices valid for a specified period of time. Their prices do not necessarily move in a manner parallel to the prices of the underlying securities. Any price paid for a warrant will be lost unless the warrant is exercised prior to its expiration. Rights are similar to warrants, but normally have a short duration and are distributed directly by the issuer to its shareholders. Warrants and rights have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer. - Repurchase Agreements. These Funds may acquire securities that are subject to repurchase agreements in order to generate income while providing liquidity as set forth in the prospectus. Money Fund's repurchase agreements must comply with the collateral requirements of Rule 2a-7 under the Investment Company Act. In a repurchase transaction, a Fund acquires a security from, and simultaneously resells it to, an approved vendor (a U.S. commercial bank or the U.S. branch of a foreign bank or broker-dealer which has been designated a primary dealer in government securities which must meet the credit requirements set by the Trust's Board of Trustees from time to time for delivery on an agreed-upon future date. The resale price exceeds the purchase price by an amount that reflects an agreed-upon interest rate effective for the period during which the repurchase agreement is in effect. The majority of these transactions run from day to day, and delivery pursuant to resale typically will occur within one to five days of the purchase. Repurchase agreements are considered "loans" under the Investment Company Act, collateralized by the underlying security. The Funds' repurchase agreements require that at all times while the repurchase agreement is in effect, the value of the collateral must equal or exceed the repurchase price to fully collateralize the repayment obligation. Additionally, the Funds' Manager will impose creditworthiness requirements to confirm that the vendor is financially sound and will continuously monitor the collateral's value. - Loans of Portfolio Securities. Each Fund may lend its respective portfolio securities subject to the restrictions stated in the Prospectus. Under applicable regulatory requirements (which are subject to change), the loan collateral must, on each business day, at least equal the value of the loaned securities and must consist of cash, bank letters of credit, U.S. Government securities, or certain other cash equivalents. To be acceptable as collateral, letters of credit must obligate a bank to pay amounts demanded by the Trust if the demand meets the terms of the letter. Such terms and the issuing bank must be satisfactory to the Trust. Any Fund lending its securities receives amounts equal to the dividends declared or interest paid on the loaned securities during the term of the loan as well as the interest on the collateral securities, less any finders' or administrative fees the Fund pays in arranging the loan. A Fund may share the interest it receives on the collateral securities with the borrower as long as it realizes at least a minimum amount of interest required by the lending guidelines established by the Board of Trustees. The lending Fund will not lend its portfolio securities to any officer, trustee, employee or affiliate of the Fund or its Manager. The terms of a Fund's loans must meet certain tests under the Internal Revenue Code and permit it to reacquire loaned securities on five days' notice or in time to vote on any important matter. - Borrowing. From time to time, each of Capital Appreciation Fund, Strategic Bond Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund and Global Fund may borrow from banks on an unsecured basis to invest the borrowed funds in portfolio securities. Borrowing is subject to the restrictions stated in the Prospectus. Any such borrowing will be made only from banks. In addition to the percentage restrictions stated in the Prospectus, the Investment Company Act requires that any such borrowing will be made only to the extent that the value of that Fund's assets, less its liabilities other than borrowings, is equal to at least 300% of all borrowings including the proposed borrowing. If the value of such Fund's assets, when computed in that manner, should fail to meet the 300% asset coverage requirement, that Fund is required within three days to reduce its bank debt to the extent necessary to meet such requirement. To do so, the Fund may have to sell a portion of its investments at a time when it would otherwise not want to sell the securities. Borrowing for investment increases both investment opportunity and risk. Interest on money borrowed is an expense these six Funds would not otherwise incur, so that they may have little or no net investment income during periods of substantial borrowings. Since substantially all of these Funds' assets fluctuate in value whereas borrowing obligations are fixed, when a Fund has outstanding borrowings, its net asset value will tend to increase and decrease more when its portfolio assets increase or decrease than would otherwise be the case. - When-Issued and Delayed Delivery Transactions. Each Fund may purchase securities on a "when-issued" basis, and may purchase or sell such securities on a "delayed delivery" basis. Although a Fund will enter into such transactions for the purpose of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the Fund may dispose of a commitment prior to settlement. "When-issued" or "delayed delivery" refers to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. When such transactions are negotiated the price (which is generally expressed in yield terms) is fixed at the time the commitment is made, but delivery and payment for the securities take place at a later date. The commitment to purchase a security for which payment will be made on a future date may be deemed a separate security and involve risk of loss if the value of the security declines prior to the settlement date. During the period between commitment by a Fund and settlement (generally within two months but not to exceed 120 days), no payment is made for the securities purchased by the purchaser, and no interest accrues to the purchaser from the transaction. Such securities are subject to market fluctuation; the value at delivery may be less than the purchase price. The Fund will maintain a segregated account with its Custodian, consisting of cash, U.S. Government securities, or other high grade debt securities rated "A" or better by Moody's or Standard & Poor's at least equal to the value of purchase commitments until payment is made. The Funds will engage in when-issued transactions in order to secure what is considered to be an advantageous price and yield at the time of entering into the obligation. When a Fund engages in when-issued or delayed delivery transactions, it relies on the buyer or seller, as the case may be, to consummate the transaction. Failure to do so may result in the Fund losing the opportunity to obtain a price and yield considered to be advantageous. If any of the Funds chooses to (i) dispose of the right to acquire a when-issued security prior to its acquisition or (ii) dispose of its right to deliver or receive against a forward commitment, it may incur a gain or loss. At the time the Fund makes a commitment to purchase or sell a security on a when-issued or forward commitment basis, it records the transaction and reflects the value of the security purchased, or if a sale, the proceeds to be received in determining its net asset value. To the extent any Fund engages in when-issued and delayed delivery transactions, it will do so for the purpose of acquiring or selling securities consistent with its investment objective and policies and not for the purposes of investment leverage. Each Fund enters into such transactions only with the intention of actually receiving or delivering the securities, although (as noted above), when-issued securities and forward commitments may be sold prior to settlement date. In addition, changes in interest rates in a direction other than that expected by the Manager before settlement will affect the value of such securities and may cause loss to that Fund. When-issued transactions and forward commitments allow a Fund a technique to use against anticipated changes in interest rates and prices. For instance, in periods of rising interest rates and falling prices, the Fund might sell securities in its portfolio on a forward commitment basis to attempt to limit its exposure to anticipated falling prices. In periods of falling interest rates and rising prices, a Fund might sell portfolio securities and purchase the same or similar securities on a when-issued or forward commitment basis, thereby obtaining the benefit of currently higher cash yields. Other Investment Techniques and Strategies Covered Calls and Hedging As described in the Prospectus, each Fund (except Money Fund) may each write covered calls and may also employ one or more types of Hedging Instruments, including the futures identified in the Prospectus ("Futures"). The Funds' strategy of hedging with Futures and options on Futures will be incidental to each such Fund's activities in the underlying cash market. When hedging to attempt to protect against declines in the market value of the Fund's portfolio, to permit the Fund to retain unrealized gains in the value of portfolio securities which have appreciated, or to facilitate selling securities for investment reasons, a given Fund would: (i) sell Futures, (ii) purchase puts on such Futures or securities, or (iii) write covered calls on securities or on Futures. When hedging to permit a Fund to establish a position in the securities markets as a temporary substitute for purchasing individual securities (which that Fund will normally purchase, and then terminate that hedging position), or to attempt to protect against the possibility that a Fund's portfolio debt securities are not fully included in a rise in the securities market, these Funds may: (i) purchase Futures, or (ii) purchase calls on such Futures or on securities. When hedging to attempt to protect against declines in the dollar value of a foreign currency-denominated security or in a payment on such security, a Fund would: (a) purchase puts on that foreign currency or on foreign currency Futures, (b) write calls on that currency or on such Futures, or (c) enter into Forward Contracts at a lower or higher rate than the spot ("cash") rate. Additional information about the Hedging Instruments these Funds may use is provided below. At present, the Funds do not intend to purchase or sell Futures or related options if, after any such purchase, the sum of initial margin deposits on Futures and premiums paid for related options exceeds 5% of the value of that Fund's total assets. Certain options on foreign currencies are considered related options for this purpose. In the future, a Fund may employ Hedging Instruments and strategies that are not presently contemplated but which may be developed, to the extent such investment methods are consistent with that Fund's investment objective, legally permissible and adequately disclosed. Writing Covered Call Options. When any of the Funds (except Money Fund) write a call on a security, it receives a premium and agrees to sell the underlying security to a purchaser of a corresponding call on the same security during the call period (usually not more than 9 months) at a fixed exercise price (which may differ from the market price of the underlying security), regardless of market price changes during the call period. Such Fund has retained the risk of loss should the price of the underlying security decline during the call period, which may be offset to some extent by the premium. To terminate its obligation on a call it has written, each such Fund may purchase a corresponding call in a "closing purchase transaction." A profit or loss will be realized, depending upon whether the net of the amount of the option transaction costs and the premium received on the call written was more or less than the price of the call subsequently purchased. A profit may also be realized if the call expires unexercised, because a Fund retains the underlying security and the premium received. Any such profits are considered short-term capital gains for Federal income tax purposes, and when distributed by each such Fund are taxable as ordinary income. If the Fund could not effect a closing purchase transaction due to lack of a market, it would have to hold the callable securities until the call expired or was exercised. Call writing may affect a Fund's turnover rate and brokerage commissions. The exercise of calls written by a Fund may cause that Fund to sell related portfolio securities, thus increasing its turnover rate in a manner beyond its control. The Funds may also write (and purchase) calls on foreign currencies. A call written on a foreign currency by any of the Funds is "covered" if the Fund owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash consideration (or for additional cash consideration held in a segregated account by its custodian) upon conversion or exchange of other foreign currency held in its portfolio. A call written by any of the Funds on a foreign currency is for cross- hedging purposes if it is not covered, but is designed to provide a hedge against a decline (due to an adverse change in the exchange rate) in the U.S. dollar value of a security which the Fund owns or has the right to acquire and which is denominated in the currency underlying the option. In such circumstances, the Fund collateralizes the option by maintaining in a segregated account with the Funds' custodian, cash or U.S. Government securities in an amount not less than the value of the underlying foreign currency in U.S. dollars marked-to-market daily. A Fund may also write calls on Futures without owning a futures contract (or, with respect to the High Income Fund, a deliverable bond) provided that at the time the call is written, the Fund covers the call by segregating in escrow an equivalent dollar amount of liquid assets. The Fund will segregate additional liquid assets if the value of the escrowed assets drops below 100% of the current value of the Future. In no circumstances would an exercise notice require a Fund to deliver a futures contract; it would simply put the Fund in a short futures position, which is permitted by each Fund's hedging policies. Hedging. Set forth below are the Hedging Instruments which the Funds (except Money Fund) may use. Writing Put Options. A put option on securities gives the purchaser the right to sell, and the writer the obligation to buy, the underlying investment at the exercise price during the option period. Writing a put covered by segregated liquid assets equal to the exercise price of the put has the same economic effect to a Fund as writing a covered call. The premium the Fund receives from writing a put option represents a profit, as long as the price of the underlying investment remains above the exercise price. However, a Fund has also assumed the obligation during the option period to buy the underlying investment from the buyer of the put at the exercise price, even though the value of the investment may fall below the exercise price. If the put expires unexercised, the Fund (as the writer of the put) realizes a gain in the amount of the premium less transaction costs. If the put is exercised, the Fund must fulfill its obligation to purchase the underlying investment at the exercise price, which will usually exceed the market value of the investment at that time. In that case, the Fund may incur a loss, equal to the sum of the sale price of the underlying investment and the premium received minus the sum of the exercise price and any transaction costs incurred. When writing put options on securities or on foreign currencies, to secure its obligation to pay for the underlying security, the Fund will deposit in escrow liquid assets with a value equal to or greater than the exercise price of the underlying securities. The Fund therefore forgoes the opportunity of investing the segregated assets or writing calls against those assets. As long as the obligation of the Fund as the put writer continues, it may be assigned an exercise notice by the exchange or broker-dealer through whom such option was sold, requiring the Fund to take delivery of the underlying security against payment of the exercise price. The Fund may be assigned an exercise notice at any time prior to the termination of its obligation as the writer of the put. This obligation terminates upon expiration of the put, or such earlier time at which the Fund effects a closing purchase transaction by purchasing a put of the same series as that previously sold. Once the Fund has been assigned an exercise notice, it is thereafter not allowed to effect a closing purchase transaction. The Fund may effect a closing purchase transaction to realize a profit on an outstanding put option it has written or to prevent an underlying security from being put. Furthermore, effecting such a closing purchase transaction will permit the Fund to write another put option to the extent that the exercise price thereof is secured by the deposited assets, or to utilize the proceeds from the sale of such assets for other investments by that Fund. The Fund will realize a profit or loss from a closing purchase transaction if the cost of the transaction is less or more than the premium received from writing the option. As above for writing covered calls, any and all such profits described herein from writing puts are considered short-term gains for Federal tax purposes, and when distributed by the Fund, are taxable as ordinary income. Purchasing Calls and Puts. When a Fund purchases a call (other than in a closing purchase transaction), it pays a premium and has the right to buy the underlying investment from a seller of a corresponding call on the same investment during the call period at a fixed exercise price. The Fund benefits only if the call is sold at a profit or if, during the call period, the market price of the underlying investment is above the sum of the call price plus the transaction costs and the premium paid for the call and the call is exercised. If the call is not exercised or sold (whether or not at a profit), it will become worthless at its expiration date and the Fund will lose its premium payment and the right to purchase the underlying investment. When such Fund purchases a put, it pays a premium and has the right to sell the underlying investment to a seller of a put on a corresponding investment during the put period at a fixed exercise price. Buying a put on securities or Futures a Fund owns enables the Fund to attempt to protect itself during the put period against a decline in the value of the underlying investment below the exercise price by selling the underlying investment at the exercise price to a seller of a corresponding put. If the market price of the underlying investment is equal to or above the exercise price and, as a result, the put is not exercised or resold, the put will become worthless at its expiration date and the Fund will lose its premium payment and the right to sell the underlying investment; the put may, however, be sold prior to expiration (whether or not at a profit). Purchasing a put on either Futures or on securities it does not own permits a Fund either to resell the put or, if applicable, to buy the underlying investment and sell it at the exercise price. The resale price of the put will vary inversely with the price of the underlying investment. If the market price of the underlying investment is above the exercise price, and, as a result, the put is not exercised, the put will become worthless on its expiration date. In the event of a decline in price of the underlying investment, the Fund could exercise or sell the put at a profit to attempt to offset some or all of its loss on its portfolio securities. When the Fund purchases a put on a Future or security not held by it, the put protects the Fund to the extent that the prices of the underlying Future or securities move in a similar pattern to the prices of the securities in a Fund's portfolio. Futures. No price is paid or received upon the purchase or sale of a Future. Upon entering into a Futures transaction, a Fund will be required to deposit an initial margin payment with the futures commission merchant (the "futures broker"). The initial margin will be deposited with the Fund's Custodian in an account registered in the futures broker's name; however the futures broker can gain access to that account only under specified conditions. As the Future is marked to market to reflect changes in its market value, subsequent margin payments, called variation margin, will be paid to or by the futures broker on a daily basis. Prior to expiration of the Future, if the Fund elects to close out its position by taking an opposite position, a final determination of variation margin is made, additional cash is required to be paid by or released to the Fund, and any loss or gain is realized for tax purposes. All futures transactions are effected through a clearinghouse associated with the exchange on which the contracts are traded. Forward Contracts. A Forward Contract involves bilateral obligations of one party to purchase, and another party to sell, a specific currency at a future date (which may be any fixed number of days from the date of the contract agreed upon by the parties), at a price set at the time the contract is entered into. These contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. The Funds may use Forward Contracts to protect against uncertainty in the level of future exchange rates. The use of Forward Contracts does not eliminate fluctuations in the prices of the underlying securities the Fund owns or intends to acquire, but it does fix a rate of exchange in advance. In addition, although Forward Contracts limit the risk of loss due to a decline in the value of the hedged currencies, at the same time they limit any potential gain that might result should the value of the currencies increase. These Funds may enter into Forward Contracts with respect to specific transactions. For example, when a Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when a Fund anticipates receipt of dividend payments in a foreign currency, a Fund may desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of such payment by entering into a Forward Contract, for a fixed amount of U.S. Dollars per unit of foreign currency, for the purchase or sale of the amount of foreign currency involved in the underlying transaction. A Fund will thereby be able to protect itself against a possible loss resulting from an adverse change in the relationship between the currency exchange rates during the period between the date on which the security is purchased or sold, or on which the payment is declared, and the date on which such payments are made or received. These Funds may also use Forward Contracts to lock in the U.S. dollar value of portfolio positions ("position hedge"). In a position hedge, for example, when a Fund believes that foreign currency may suffer a substantial decline against the U.S. dollar, it may enter into a forward sale contract to sell an amount of that foreign currency approximating the value of some or all of that Fund's portfolio securities denominated in such foreign currency, or when a Fund believes that the U.S. dollar may suffer a substantial decline against a foreign currency, it may enter into a forward purchase contract to buy that foreign currency for a fixed dollar amount. In this situation the Fund may, in the alternative, enter into a Forward Contract to sell a different foreign currency for a fixed U.S. dollar amount where that Fund believes that the U.S. dollar value of the currency to be sold pursuant to the Forward Contract will fall whenever there is a decline in the U.S. dollar value of the currency in which portfolio securities of that Fund are denominated ("cross-hedge"). These Funds will not enter into such Forward Contracts or maintain a net exposure to such contracts where the consummation of the contracts would obligate that Fund to deliver an amount of foreign currency in excess of the value of the Fund's portfolio securities or other assets denominated in that currency. The Fund, however, in order to avoid excess transactions and transaction costs, may maintain a net exposure to Forward Contracts in excess of the value of the Fund's portfolio securities or other assets denominated in that currency provided the excess amount is "covered" by liquid, high-grade debt securities, denominated in that foreign currency or U.S. dollars, at least equal at all times to the amount of such excess. As an alternative, the Fund may purchase a call option permitting the Fund to purchase the amount of foreign currency being hedged by a forward sale contract at a price no higher than the forward contract price or the Fund may purchase a put option permitting the Fund to sell the amount of foreign currency subject to a forward purchase contract at a price as high or higher than the forward contract price. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The precise matching of the Forward Contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of these securities between the date the Forward Contract is entered into and the date it is sold. Accordingly, it may be necessary for a Fund to purchase additional foreign currency on the spot (i.e., cash) market (and bear the expense of such purchase), if the market value of the security is less than the amount of foreign currency the Fund is obligated to deliver and if a decision is made to sell the security and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security if its market value exceeds the amount of foreign currency a Fund is obligated to deliver. The projection of short-term currency market movements is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Forward Contracts involve the risk that anticipated currency movements will not be accurately predicted, causing a Fund to sustain losses on these contracts and transactions costs. At or before the maturity of a Forward Contract requiring any Fund to sell a currency, the Fund may either sell a portfolio security and use the sale proceeds to make delivery of the currency or retain the security and offset its contractual obligation to deliver the currency by purchasing a second contract pursuant to which the Fund will obtain, on the same maturity date, the same amount of the currency that it is obligated to deliver. Similarly, the Fund may close out a Forward Contract requiring it to purchase a specified currency by entering into a second contract entitling it to sell the same amount of the same currency on the maturity date of the first contract. The Fund would realize a gain or loss as a result of entering into such an offsetting Forward Contract under either circumstance to the extent the exchange rate or rates between the currencies involved moved between the execution dates of the first contract and offsetting contract. The cost to the Fund of engaging in Forward Contracts varies with factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because Forward Contracts are usually entered into on a principal basis, no fees or commissions are involved. Because such contracts are not traded on an exchange, a Fund must evaluate the credit and performance risk of each particular counterparty under a Forward Contract. Although each Fund values its assets daily in terms of U.S. dollars, it does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. The Fund may convert foreign currency from time to time, and investors should be aware of the costs of currency conversion. Foreign exchange dealers do not charge a fee for conversion, but they do seek to realize a profit based on the difference between the prices at which they buy and sell various currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at one rate, while offering a lesser rate of exchange should that Fund desire to resell that currency to the dealer. Interest Rate Swap Transactions. The risk incurred by Bond Fund, High Income Fund and Strategic Bond Fund in entering into a swap agreement is twofold: interest rate risk and credit risk. There is a risk that, based on movements of interest rates in the future, the payments made by the Fund under a swap agreement will have been greater than those received by it. Credit risk arises from the possibility that the counterparty will default. If the counterparty to an interest rate swap defaults, the Fund's loss will consist of the net amount of contractual interest payments that the Fund has not yet received. The Manager will monitor the creditworthiness of counterparties to the Fund's interest rate swap transactions on an ongoing basis. These Funds will enter into swap transactions with appropriate counterparties pursuant to master netting agreements. A master netting agreement provides that all swaps done between the Fund and that counterparty under the master agreement shall be regarded as parts of an integral agreement. If on any date amounts are payable in the same currency in respect of one or more swap transactions, the net amount payable on that date in that currency shall be paid. In addition, the master netting agreement may provide that if one party defaults generally or on one swap, the counterparty may terminate the swaps with that party. Under such agreements, if there is a default resulting in a loss to one party, the measure of that party's damages is calculated by reference to the average cost of a replacement swap with respect to each swap (i.e., the mark-to-market value at the time of the termination of each swap). The gains and losses on all swaps are then netted, and the result is the counterparty's gain or loss on termination. The termination of all swaps and the netting of gains and losses on termination is generally referred to as "aggregation." Additional Information About Hedging Instruments and Their Use. Each Fund's Custodian, or a securities depository acting for the Custodian, will act as that Fund's escrow agent, through the facilities of the Options Clearing Corporation ("OCC"), as to the securities on which the Fund has written options or as to other acceptable escrow securities, so that no margin will be required for such transactions. OCC will release the securities on the expiration of the option or upon the Fund's entering into a closing transaction. An option position may be closed out only on a market which provides secondary trading for options of the same series, and there is no assurance that a liquid secondary market will exist for any particular option. When a Fund writes an over-the-counter ("OTC") option, it will enter into an arrangement with a securities dealer, which would establish a formula price at which that Fund would have the absolute right to repurchase that OTC option. This formula price would generally be based on a multiple of the premium received for the option, plus the amount by which the option is exercisable below for a put, above for a call, the market price of the underlying security ("in-the-money"). For any OTC option which any of these three Funds writes, it will treat as illiquid (for purposes of the 15% of net assets restriction on illiquid securities, stated in the Prospectus) the mark-to-market value of any OTC option held by it. The SEC is evaluating the general issue of whether or not OTC options should be considered as liquid securities, and the procedure described above could be affected by the outcome of that evaluation. Each Fund's option activities may affect its turnover rate and brokerage commissions. As noted above, the exercise of calls written by a Fund may cause that Fund to sell related portfolio securities, thus increasing its turnover rate in a manner beyond a Fund's control. The exercise by a Fund of puts on securities or Futures may cause the sale of related investments, also increasing portfolio turnover. Although such exercise is within the Fund's control, holding a put might cause the Fund to sell the underlying investment for reasons which would not exist in the absence of the put. Each Fund will pay a brokerage commission each time it buys or sells a call, buys a put or sells an underlying investment in connection with the exercise of a put or call. Such commissions may be higher than those which would apply to direct purchases or sales of the underlying investments. Premiums paid for options are small in relation to the market value of such investments and consequently, put and call options offer large amounts of leverage. The leverage offered by trading in options could result in a Fund's net asset value being more sensitive to changes in the value of the underlying investment. Regulatory Aspects of Hedging Instruments. These Funds must each operate within certain restrictions as to its long and short positions in Futures and options thereon under a rule (the "CFTC Rule") adopted by the Commodity Futures Trading Commission (the "CFTC") under the Commodity Exchange Act (the "CEA"), which excludes the Fund from registration with the CFTC as a "commodity pool operator" (as defined in the CEA) if it complies with the CFTC Rule. The Rule does not limit the percentage of each Fund's assets that may be used for Futures margin and related options premiums for a bona fide hedging position. However, under the Rule each Fund must limit its aggregate initial futures margin and related option premiums to no more than 5% of that Fund's net assets for hedging strategies that are not considered bona fide hedging strategies under the Rule. Under the restrictions, each Fund also must, as to its short positions, use Futures and options thereon solely for bona-fide hedging purposes within the meaning and intent of the applicable provisions under the CEA. Certain options on foreign currencies are considered related options for this purpose. Transactions in options by these Funds are subject to limitations established by each of the exchanges governing the maximum number of options which may be written or held by a single investor or group of investors acting in concert, regardless of whether the options were written or purchased on the same or different exchanges or are held in one or more accounts or through one or more exchanges or brokers. Thus, the number of options which the Fund may write or hold may be affected by options written or held by other entities, including other investment companies having the same or an affiliated investment adviser. Position limits also apply to Futures. An exchange may order the liquidation of positions found to be in violation of those limits and may impose certain other sanctions. Due to requirements under the Investment Company Act, when a Fund purchases a Future, the Fund will maintain, in a segregated account or accounts with its custodian bank, cash or readily-marketable, short-term (maturing in one year or less) debt instruments in an amount equal to the market value of the securities underlying such Future, less the margin deposit applicable to it. Tax Aspects of Hedging Instruments and Covered Calls. Each Fund intends to qualify as a "regulated investment company" under the Internal Revenue Code of 1986. That qualification enables each Fund to "pass-through" its income and realized capital gains to shareholders without the Fund having to pay tax on them. One of the tests for each Fund's qualification is that less than 30% of its gross income must be derived from gains realized on the sale of securities held for less than three months. To comply with that 30% cap, the Funds will limit the extent to which they engage in the following activities, but will not be precluded from them: (i) selling investments, including Futures, held for less than three months, whether or not they were purchased on the exercise of a call held by that Fund; (ii) purchasing calls or puts which expire in less than three months; (iii) effecting closing transactions with respect to calls or puts purchased less than three months previously; (iv) exercising puts held by that Fund for less than three months; and (v) writing calls on investments held for less than three months. Possible Risk Factors in Hedging. In addition to the risks with respect to options discussed in the Prospectus and above, there is a risk in using short hedging by: (i) selling Futures or (ii) purchasing puts on broadly-based indices or Futures to attempt to protect against declines in the value of the Fund's securities that the prices of the Futures or applicable index (thus the prices of the Hedging Instruments) will correlate imperfectly with the behavior of the cash (i.e., market value prices) of the Fund's securities. The ordinary spreads between prices in the cash and futures markets are subject to distortions due to differences in the natures of those markets. First, all participants in the futures markets are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between the cash and futures markets. Second, the liquidity of the futures markets depend on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures markets could be reduced, thus producing distortion. Third, from the point of view of speculators, the deposit requirements in the futures markets are less onerous than margin requirements in the securities markets. Therefore, increased participation by speculators in the futures markets may cause temporary price distortions. The risk of imperfect correlation increases as the composition of a Fund's portfolio diverges from the securities included in the applicable index. To compensate for the imperfect correlation of movements in the price of the securities being hedged and movements in the price of the Hedging Instruments, each Fund may use Hedging Instruments in a greater dollar amount than the dollar amount of securities being hedged if the historical volatility of the prices of such securities being hedged is more than the historical volatility of the applicable index. It is also possible that where a Fund has used Hedging Instruments in a short hedge, the market may advance and the value of securities held in the Fund's portfolio may decline. If this occurred, the Fund would lose money on the Hedging Instruments and also experience a decline in value in its securities. However, while this could occur for a very brief period or to a very small degree, over time the value of a diversified portfolio of equity securities will tend to move in the same direction as the indices upon which the Hedging Instruments are based. If a Fund uses Hedging Instruments to establish a position in the securities markets as a temporary substitute for the purchase of individual securities (long hedging) by buying Futures and/or calls on such Futures, on securities, or on stock indices, it is possible that the market may decline. If either Fund then concludes not to invest in such securities at that time because of concerns as to possible further market decline or for other reasons, that Fund will realize a loss on the Hedging Instruments that is not offset by a reduction in the price of the equity securities purchased. - Short Sales Against-the-Box. Each Fund (except Money Fund) may sell securities short in "short sales against-the-box." In a short sale, the seller does not own the security that is sold, but normally borrows the security to fulfill the delivery obligation. The seller later buys the security to repay the loan, in the expectation that the price of the security will be lower when the purchase is made, resulting in a gain. In these transactions, where the Fund owns an equivalent amount of the securities sold short. This technique is primarily used for tax purposes. Other Investment Restrictions The significant investment restrictions of all the Funds are set forth in the Prospectus. The following investment restrictions are also fundamental policies. Fundamental policies and the Funds' investment objectives cannot be changed without the vote of a "majority" of the outstanding shares of the Trust (or of the Fund, as to matters affecting only that Fund). Under the Investment Company Act, such a "majority" vote is defined as the vote of the holders of the lesser of: (1) 67% or more of the shares present or represented by proxy at such meeting, if the holders of more than 50% of the outstanding shares are present or represented by proxy, or (2) more than 50% of the outstanding shares. Under these additional restrictions, each of the Funds cannot: (1) invest in oil or gas exploration or development programs; (2) invest in real estate or in interests in real estate, but may purchase securities of issuers holding real estate or interests therein; (3) invest in companies for the purpose of acquiring control of management thereof; (4) underwrite securities of other companies, except insofar as it might be deemed to be an underwriter for purposes of the Securities Act of 1933 in the resale of any securities held in its own portfolio; (5) invest or hold securities of any issuer if those officers and trustees or directors of the Trust or its adviser owning individually more than 1/2 of 1% of the securities of such issuer together own more than 5% of the securities of such issuer; or (6) invest in other open-end investment companies, or invest more than 5% of its net assets at the time of purchase in closed-end investment companies, including small business investment companies, nor make any such investments at commission rates in excess of normal brokerage commissions. For purposes of the Funds' policy not to concentrate described under investment restriction number four in the Prospectus, the Funds have adopted the industry classifications set forth in Appendix A to the Statement of Additional Information. This is not a fundamental policy. New York's insurance laws require that investments of each Fund be made with a degree of care of an "ordinarily prudent person." The Manager believes that compliance with this standard will not have a negative impact on the performance of any of the Funds. In addition, each Fund's investments must comply with the diversification requirements contained in Section 817(h) of the Internal Revenue Code, and each Fund has undertaken to comply with the diversification requirements of Section 10506 of the California Insurance Code (see "Other Investment Techniques and Strategies -- Foreign Securities" in the Prospectus) and with the regulations adopted under those statutes. How the Funds are Managed Organization and History. As a Massachusetts business trust, the Trust is not required to hold, and does not plan to hold, regular annual meetings of shareholders. The Trust will hold meetings when required to do so by the Investment Company Act or other applicable law, or when a shareholder meeting is called by the Trustees or upon proper request of the shareholders. At all shareholder meetings, shareholders only vote on matters affecting their Fund. Shareholders have the right, upon the declaration in writing or vote of two-thirds of the outstanding shares of the Trust, to remove a Trustee. The Trustees will call a meeting of shareholders to vote on the removal of a Trustee upon the written request of the record holders of 10% of its outstanding shares. In addition, if the Trustees receive a request from at least 10 shareholders (who have been shareholders for at least six months) holding shares of the Trust valued at $25,000 or more or holding at least 1% of the Trust's outstanding shares, whichever is less, stating that they wish to communicate with other shareholders to request a meeting to remove a Trustee, the Trustees will then either make the Trust's shareholder list available to the applicants or mail their communication to all other shareholders at the applicants' expense, or the Trustees may take such other action as set forth under Section 16(c) of the Investment Company Act. At all shareholder meetings, shareholders only vote on matters affecting their Fund, and each Fund votes separately on such matters. However, matters that require a vote by all shareholders of the Trust are submitted to all the shareholders, without individual voting by Fund. The Trust's Declaration of Trust contains an express disclaimer of shareholder or Trustee liability for the Trust's obligations, and provides for indemnification and reimbursement of expenses out of its property for any shareholder held personally liable for its obligations. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, while Massachusetts law permits a shareholder of a business trust (such as the Trust) to be held personally liable as a "partner" under certain circumstances, the risk of a Trust shareholder incurring financial loss on account of shareholder liability is limited to the relatively remote circumstances in which the Trust would be unable to meet its obligations described above. Any person doing business with the Trust, and any shareholder of the Trust, agrees under the Trust's Declaration of Trust to look solely to the assets of the Trust for satisfaction of any claim or demand which may arise out of any dealings with the Trust, and the Trustees shall have no personal liability to any such person, to the extent permitted by law. Trustees and Officers of the Trust. The Trust's Trustees and officers and their principal occupations and business affiliations during the past five years are set forth below. Each Trustee is also a Trustee, Director or Managing General Partner of Daily Cash Accumulation Fund, Inc., Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New York Tax Exempt Trust, Centennial California Tax Exempt Trust, Oppenheimer Total Return Fund, Inc., Oppenheimer Equity Income Fund, Oppenheimer Champion High Yield Fund, Oppenheimer High Yield Fund, Oppenheimer Cash Reserves, Oppenheimer Main Street Funds, Inc., Oppenheimer Integrity Funds, Oppenheimer Strategic Funds Trust, Oppenheimer Strategic Income & Growth Fund, Oppenheimer Strategic Investment Grade Bond Fund, Oppenheimer Strategic Short-Term Income Fund, Centennial America Fund, L.P., Oppenheimer Tax-Exempt Bond Fund, Oppenheimer Limited-Term Government Fund, and The New York Tax-Exempt Income Fund, Inc. (collectively, the "Denver-based OppenheimerFunds"). Mr. Fossel is President and Mr. Swain is Chairman of each of the Denver-based OppenheimerFunds. As of March 31, 1995, none of the Trustees or officers were Account owners and thus none owned any Fund shares. Robert G. Avis, Trustee*, Age: 63 One North Jefferson Ave., St. Louis, Missouri 63103 Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G. Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset Management and A.G. Edwards Trust Company (its affiliated investment adviser and trust company, respectively). William A. Baker, Trustee; Age: 80 197 Desert Lakes Drive, Palm Springs, California 92264 Management Consultant. Charles Conrad, Jr., Trustee; Age: 64 19411 Merion Circle, Huntington Beach, California 92648 Vice President of McDonnell Douglas Space Systems, Co.; formerly associated with the National Aeronautics and Space Administration. Jon S. Fossel, President and Trustee*: Age: 53 Two World Trade Center, New York, New York 10048-0203 Chairman, Chief Executive Officer and a director of the Manager; President and a director of Oppenheimer Acquisition Corp. ("OAC"), the Manager's parent holding company; President and a director of HarbourView Asset Management Corporation ("HarbourView"), a subsidiary of the Manager; a director of Shareholder Services, Inc. ("SSI") and Shareholder Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of the Manager; formerly President of the Manager. Raymond J. Kalinowski, Trustee; Age: 65 44 Portland Drive, St. Louis, Missouri 63131 Director of Wave Technologies International, Inc.; formerly Vice Chairman and a director of A.G. Edwards, Inc., parent holding company of A.G. Edwards & Sons, Inc. (a broker-dealer), of which he was a Senior Vice President. C. Howard Kast, Trustee; Age: 73 2552 East Alameda, Denver, Colorado 80209 Formerly the Managing Partner of Deloitte, Haskins & Sells (an accounting firm). Robert M. Kirchner, Trustee; Age: 73 7500 E. Arapahoe Road, Englewood, Colorado 80112 President of The Kirchner Company (management consultants). Ned M. Steel, Trustee; Age: 79 3416 South Race Street, Englewood, Colorado 80110 Chartered Property and Casualty Underwriter; Director of Visiting Nurse Corporation of Colorado; formerly Senior Vice President and a Director of Van Gilder Insurance Corp. (insurance brokers). __________________ *A Trustee who is an "interested person" of the Trust as defined in the Investment Company Act. James C. Swain, Chairman and Trustee*; Age: 61 3410 South Galena Street, Denver, Colorado 80231 Vice Chairman and a director of the Manager; President and a director of Centennial Asset Management Corporation, an investment adviser subsidiary of the Manager ("Centennial"); formerly Chairman of the Board of SSI. Andrew J. Donohue, Vice President; Age: 44 Two World Trade Center, New York, New York 10048-0203 Executive Vice President and General Counsel of Oppenheimer Management Corporation ("OMC") (the "Manager") and Oppenheimer Funds Distributor, Inc. ("OFDI"); an officer of other OppenheimerFunds; formerly Senior Vice President and Associate General Counsel of the Manager and the Distributor; formerly a Partner in Kraft & McManimon (a law firm), prior to which he was an officer of First Investors Corporation (a broker-dealer) and First Investors Management Company, Inc. (broker- dealer and investment adviser) and a director and an officer of the First Investors Family of Funds and First Investors Life Insurance Company. George C. Bowen, Vice President, Secretary and Treasurer; Age: 58 3410 South Galena Street Denver, Colorado 80231 Senior Vice President and Treasurer of the Manager; Vice President and Treasurer of the Distributor and HarbourView; Senior Vice President, Treasurer, Assistant Secretary and a director of Centennial; Vice President, Treasurer and Secretary of SSI and SFSI; an officer of other OppenheimerFunds. Paul LaRocco, Vice President; Capital Appreciation Fund Portfolio Manager; Age: 37 Two World Trade Center, New York, New York 10048-0203 Assistant Vice President of the Manager; Associate Portfolio Manager for other OppenheimerFunds; formerly a securities analyst with Columbus Circle Investors, prior to which he was investment analyst for Chicago Title & Trust Co. Jane Putnam, Vice President; Growth Fund Portfolio Manager; Age 34 Two World Trade Center, New York, New York 10048-0203 Associate Portfolio Manager of other OppenheimerFunds; formerly a portfolio manager and equity research analyst for Chemical Bank. Michael S. Levine, Growth & Income Fund Assistant Portfolio Manager; Age: 29 Two World Trade Center, New York, New York 10048-0203 Associate Portfolio Manager of the Manager; formerly portfolio manager and research associate for Amas Securities, Inc.; before which he was an analyst for Shearson Lehman Hutton, Inc. David P. Negri, Vice President; High Income Fund, Bond Fund, Multiple Strategies Fund and Strategic Bond Fund Portfolio Manager; Age: 41 Two World Trade Center, New York, New York 10048 Vice President of the Manager; an officer of other OppenheimerFunds. __________________ *A Trustee who is an "interested person" of the Trust as defined in the Investment Company Act. Richard H. Rubinstein, Vice President; Multiple Strategies Fund Portfolio Manager; Age: 46 Two World Trade Center, New York, New York 10048 Vice President of the Manager; an officer of other OppenheimerFunds; formerly Vice President and Portfolio Manager/Security Analyst for Oppenheimer Capital Corporation (an investment adviser). Arthur J. Zimmer, Vice President; Money Fund Portfolio Manager; Age: 48 3410 South Galena Street, Denver, Colorado 80231 Vice President of the Manager and Centennial; an officer of other OppenheimerFunds; formerly Vice President of Hanifen Imhoff Management Company (mutual fund investment adviser). George Evans, Vice President; Global Securities Fund Portfolio Manager; Age: 35 Two World Trade Center, New York, New York 10048 Vice President of the Manager; formerly an International Equities Portfolio Manager/Analyst with Brown Brothers, Harriman & Co. John L. Wallace, Vice President; Growth & Income Fund Portfolio Manager; Age: 41 Two World Trade Center, New York, NY 10048-0203 Vice President of the Manager; an officer of other OppenheimerFunds; formerly a Securities Analyst and Assistant Portfolio Manager for the Manager. Robert G. Zack, Assistant Secretary; Age: 46 Two World Trade Center, New York, New York 10048-0203 Senior Vice President and Associate General Counsel of the Manager; Assistant Secretary of SSI and SFSI; an officer of other OppenheimerFunds. Robert J. Bishop, Assistant Treasurer; Age: 36 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of the Manager/Mutual Fund Accounting; an officer of other OppenheimerFunds; formerly a Fund Controller for the Manager, prior to which he was an Accountant for Yale & Seffinger, P.C., an accounting firm, and previously an Accountant and Commissions Supervisor for Stuart James Company Inc., a broker-dealer. Scott Farrar, Assistant Treasurer; Age: 29 3410 South Galena Street, Denver, Colorado 80231 Assistant Vice President of the Manager/Mutual Fund Accounting, an officer of other OppenheimerFunds; previously a Fund Controller for the Manager, prior to which he was an International Mutual Fund Supervisor for Brown Brothers Harriman & Co. (a bank) and previously a Senior Fund Accountant for State Street Bank & Trust Company. - Remuneration of Trustees. The officers of the Trust are affiliated with the Manager; they and the Trustees of the Trust who are affiliated with the Manager (Messrs. Fossel and Swain, who are both officers and Trustees) receive no salary or fee from the Trust. The Trustees of the Trust (excluding Messrs. Fossel and Swain) received the total amounts shown below (i) from the Trust during its fiscal year ended 12/31/94, and (ii) from all 22 of the Denver-based OppenheimerFunds (including the Trust) listed in the first paragraph of this section, for services in the positions shown:
Total Compensation Aggregate From All Compensation Denver-based Name Position From Fund OppenheimerFunds1 Robert G. Avis Trustee $3,408.41 $53,000.00 William A. Baker Audit and Review $4,716.40 $73,257.01 Committee Chairman and Trustee Charles Conrad, Jr. Audit and Review $4,393.48 $68,293.67 Committee Member and Trustee Raymond J. Kalinowski Trustee $3,408.41 $53,000.00 C. Howard Kast Trustee $3,408.41 $53,000.00 Robert M. Kirchner Audit and Review $4,393.48 $68,293.67 Committee Member and Trustee Ned M. Steel Trustee $3,408.41 $53,000.00 1 For the 1994 calendar year.
- Major Shareholders. As of March 31, 1995, the holders of 5% or more of the outstanding shares of any Fund (except Growth & Income Fund, which had no shares outstanding as of that date) were separate accounts of (i) Monarch Life Insurance Company ("Monarch"), Springfield, MA; (ii) Bankers Security Life Insurance Society ("Bankers Security"), Arlington, VA; (iii) The Life Insurance Company of Virginia ("Life of Virginia"), Richmond, VA; (iv) Nationwide Life Insurance Company ("Nationwide"), Columbus, OH; (v) Confederation Life Insurance and Annuity Company ("Confederation"), Atlanta, GA and (vi) Massachusetts Mutual Life Insurance Company, Springfield, MA (including its subsidiary, MML Bay Street Life Insurance Company "MassMutual"). Such shares were held as follows:
Bankers Life of Monarch Security Virginia Money Fund 27,692,014.570 11,500,387.510 5,774,622.170 High Income Fund 1,274,839.638 2,771,761.985 2,911,052.062 Bond Fund 784,658.507 * 1,705,549.628 Capital Appreciation Fund 763,186.751 1,679,016.594 2,490,858.915 Growth Fund 998,676.400 * 905,702.085 Multiple Strategies Fund 3,809,233.753 4,426,919.490 2,624,441.836 Bankers Life of Monarch Security Virginia Global Securities Fund -- 1,661,772.214 -- Strategic Bond -- * -- Fund Nationwide Confederation MassMutual Money Fund -- 24,709,842.450 * High Income Fund -- 3,723,645.939 * Bond Fund 9,839,158.640 1,716,375.295 * Capital Appreciation -- 1,812,185.670 1,082,891.984 Fund Growth Fund -- 1,933,896.560 * Multiple Strategies Fund 9,612,482.494 3,969,862.404 * Global Securities Fund 13,499,555.502 3,375,603.049 2,732,019.874 Strategic Bond Fund -- 3,149,446.160 2,453,577.671 __________________ * Less than 5% of the outstanding shares of that Fund.
The Manager and Its Affiliates. The Manager is wholly-owned by Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts Mutual Life Insurance Company. OAC is also owned in part by certain of the Manager's directors and officers, some of whom also serve as officers of the Trust, and two of whom (Mr. Swain and Mr. Fossel) serve as Trustees of the Trust. The Manager and the Funds have a Code of Ethics. It is designed to detect and prevent improper personal trading by certain employees, including portfolio managers, that would compete with or take advantage of a Fund's portfolio transactions. Compliance with the Code of Ethics is carefully monitored and strictly enforced by the Manager. - The Investment Advisory Agreements. The investment advisory agreements between the Manager and the Trust for each of the nine Funds require the Manager, at its expense, to provide each Fund with adequate office space, facilities and equipment, and to provide and supervise the activities of all administrative and clerical personnel required to provide effective corporate administration for each Fund, including the compilation and maintenance of records with respect to its operations, the preparation and filing of specified reports, and composition of proxy materials and registration statements for continuous public sale of shares of each Fund. Expenses not expressly assumed by the Manager under the advisory agreement are paid by the Trust. The advisory agreements list examples of expenses paid by the Trust, the major categories of which relate to interest, taxes, brokerage commissions, fees to certain Trustees, legal and audit expenses, custodian and transfer agent expenses, share issuance costs, certain printing and registration costs and non- recurring expenses, including litigation costs. Expenses with respect to any two or more Funds are allocable in proportion to the net assets of the respective Funds except where allocations of direct expenses can be made. The management fees paid by the Funds to the Manager for the Funds' most recent three fiscal years (except for Growth & Income Fund, which commenced operations after December 31, 1994) were as follows:
Fiscal year ended December 31, 1994 1993 1992 Money Fund $ 341,324 $212,358 $259,778 High Income Fund $ 617,198 $382,629 $230,117 Bond Fund $ 630,514 $361,258 $215,989 Capital Appreciation Fund $ 803,231 $407,611 $267,347 Growth Fund $ 307,904 $193,110 $121,993 Multiple Strategies Fund $1,433,107 $831,139 $658,068 Global Securities Fund $1,517,234 $227,226 $ 82,505 Strategic Bond Fund (1) $ 105,760 $18,509(1) -- ____________________ (1) From May 3, 1993 (commencement of operations) to December 31, 1993.
The advisory agreements provide that the Manager is not liable for any loss sustained by the Trust and/or any Fund in connection with matters to which the Agreements relate, except a loss resulting by reason of the Manager's willful misfeasance, bad faith or gross negligence in the performance of its duties or reckless disregard for its obligations thereunder. The Manager may act as investment adviser for any other person, firm or corporation, and the Agreements permit the Manager to use the name "Oppenheimer" in connection with other investment companies for which it may act as investment adviser or general distributor. If the Manager shall no longer act as investment adviser to the Trust, the right of the Trust or any of the Funds to use the name "Oppenheimer" as part of their names may be withdrawn. Independently of the advisory agreements, the Manager has voluntarily undertaken since January 1, 1995 that the total expenses of any Fund shall not exceed 2.5% of the first $30 million of average net assets of that Fund, 2.0% of the next $70 million and 1.5% of average net assets over $100 million. In addition, the Manager has voluntarily undertaken since September 1, 1994 that it will limit the management fee charged under Strategic Bond Fund's Agreement so that the ordinary operating expenses of that Fund would not exceed 1.0% of its average net assets in any fiscal year. The payment of the management fee will be reduced or eliminated during any fiscal year in which such payment would cause the expenses of a Fund to exceed its expense limitation. Other expense limits were in effect prior to January 1, 1995. The Manager reserves the right to terminate or amend the undertakings at any time. Any assumption of a Fund's expenses under these limitations would lower that Fund's overall expense ratio and increase its total return during any period in which expenses are limited. The expense limitations in effect prior to the above dates are contained in note 8 to the Funds' financial statements, below. - The Transfer Agent. Oppenheimer Shareholder Services, the Trust's Transfer Agent, is responsible for maintaining the Trust's shareholder registry and shareholder accounting records. Brokerage Policies of the Funds Brokerage Provisions of the Investment Advisory Agreements Affecting Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund, Global Securities Fund and Strategic Bond Fund. One of the duties of the Manager under the advisory agreements is to arrange the portfolio transactions for the Funds. The advisory agreements contain provisions relating to the employment of broker- dealers ("brokers") to effect the Funds' portfolio transactions. In doing so, the Manager is authorized by the advisory agreements to employ broker-dealers, including "affiliated" brokers, as that term is defined in the Investment Company Act, as may, in its best judgment based on all relevant factors, implement the policy of the Funds to obtain, at reasonable expense, the "best execution" (prompt and reliable execution at the most favorable price obtainable) of such transactions. The Manager need not seek competitive commission bidding but is expected to minimize the commissions paid to the extent consistent with the interests and policies of the Funds as established by the Board of Trustees. Purchases of securities from underwriters include a commission or concession paid by the issuer to the underwriter, and purchases from dealers include a spread between the bid and asked price. Under the advisory agreements, the Manager is authorized to select brokers that provide brokerage and/or research services for the Funds and/or the other accounts over which the Manager or its affiliates have investment discretion. The commissions paid to such brokers may be higher than another qualified broker would have charged if a good faith determination is made by the Manager that the commission is fair and reasonable in relation to the services provided. Description of Brokerage Practices Followed by the Manager. Subject to the provisions of the advisory agreements, and the procedures and rules described above, allocations of brokerage are generally made by the Manager's portfolio traders based upon recommendations from the Manager's portfolio managers. In certain instances portfolio managers may directly place trades and allocate brokerage, also subject to the provisions of the advisory agreement and the procedures and rules described above. Regardless, brokerage is allocated under the supervision of the Manager's executive officers. Transactions in securities other than those for which an exchange is the primary market are generally done with principals or market makers. Brokerage commissions are paid primarily for effecting transactions in listed securities and are otherwise paid only if it appears likely that a better price or execution can be obtained. When Funds engage in an option transaction, ordinarily the same broker will be used for the purchase or sale of the option and any transaction in the securities to which the option relates. When possible, concurrent orders to purchase or sell the same security by more than one of the accounts managed by the Manager or its affiliates are combined. The transactions effected pursuant to such combined orders are averaged as to price and allocated in accordance with the purchase or sale orders actually placed for each account. Option commissions may be relatively higher than those which would apply to direct purchases and sales of portfolio securities. Most purchases of money market instruments and debt obligations are principal transactions at net prices. Instead of using a broker for those transactions, the Fund normally deals directly with the selling or purchasing principal or market maker unless the Manager determines that a better price or execution can be obtained by using a broker. Purchases of these securities from underwriters include a commission or concession paid by the issuer to the underwriter. Purchases from dealers include a spread between the bid and asked prices. The Funds seek to obtain prompt execution of these orders at the most favorable net price. The research services provided by a particular broker may be useful only to one or more of the advisory accounts of the Manager and its affiliates, and investment research received for the commissions of those other accounts may be useful both to the Funds and one or more of such other accounts. Such research, which may be supplied by a third party at the instance of a broker, includes information and analyses on particular companies and industries as well as market or economic trends and portfolio strategy, receipt of market quotations for portfolio evaluations, information systems, computer hardware and similar products and services. If a research service also assists the Manager in a non-research capacity (such as bookkeeping or other administrative functions), then only the percentage or component that provides assistance to the Manager in the investment decision-making process may be paid in commission dollars. The Board of Trustees has permitted the Manager to use concessions on fixed price offerings to obtain research in the same manner as is permitted for agency transactions. The research services provided by brokers broaden the scope and supplement the research activities of the Manager, by making available additional views for consideration and comparisons, and by enabling the Manager to obtain market information for the valuation of securities held in the Fund's portfolio or being considered for purchase. The Board of Trustees, including the "independent" Trustees of the Trust (those Trustees of the Trust who are not "interested persons" as defined in the Investment Company Act) annually reviews information furnished by the Manager as to the commissions paid to brokers furnishing such services so that the Board may ascertain whether the amount of such commissions was reasonably related to the value or benefit of such services. Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund. As most purchases made by Money Fund, High Income Fund, Bond Fund and Strategic Bond Fund are principal transactions at net prices, these Funds incur little or no brokerage costs. Purchases of securities from underwriters include a commission or concession paid by the issuer to the underwriter, and purchases from dealers include a spread between the bid and asked price. No principal transactions and, except under unusual circumstances, no agency transactions for these Funds will be handled by any affiliated securities dealer. In the unusual circumstance when these Funds pay brokerage commissions, the above- described brokerage practices and policies are followed. Money Fund's policy of investing in short-term debt securities with maturities of less than 397 days results in high portfolio turnover. However, since brokerage commissions, if any, are small, high portfolio turnover does not have an appreciable adverse effect upon the net asset value of that Fund. During the Funds' fiscal years ended December 31, 1992, 1993 and 1994, total brokerage commissions paid by the Funds (not including spreads or concessions on principal transactions on a net trade basis) were $79,362, $139,429 and $1,570,251, respectively, for Capital Appreciation Fund; $2,470, $6,723 and $13,640, respectively, for High Income Fund; $32,228, $33,497 and $96,732, respectively, for Growth Fund; $187,495, $176,858 and $332,782, respectively, for Multiple Strategies Fund; $53,828, $352,908 and $2,245,838, respectively for Global Securities Fund; and $0 and $3,782 for Strategic Bond Fund. During the fiscal year ended December 31, 1994, $61,327, $64,814, $80,062, $962,152 and $1,245 was paid by Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global Securities Fund and High Income Fund, respectively, to dealers as brokerage commissions in return for research services; the aggregate amount of those transactions was $24,444,067, $32,063,309, $30,426,116, $215,822,430 and $123,945 for Capital Appreciation Fund, Growth Fund, Multiple Strategies Fund, Global Securities Fund and High Income Fund, respectively. Performance of the Funds - Money Fund Yield Information. Money Fund's current yield for a seven day period of time is determined in accordance with regulations adopted under the Investment Company Act as follows. First, a base period return is calculated for the seven-day period by determining the net change in the value of a hypothetical pre-existing account having one share at the beginning of a seven day period. The change includes dividends declared on the original share and dividends declared on any shares purchased with dividends on that share, but such dividends are adjusted to exclude any realized or unrealized capital gains or losses affecting the dividends declared. Next, the base period return is multiplied by 365/7 to obtain the current yield to the nearest hundredth of one percent. The compounded effective yield for a seven- day period is calculated by (a) adding 1 to the base period return (obtained as described above), (b) raising the sum to a power equal to 365 divided by 7 and (c) subtracting 1 from the result. For the seven days ended December 31, 1994, Money Fund's "current yield" was 5.45% and its compounded "effective yield" for that period was 5.60%. The yield as calculated above may vary for accounts less than approximately $100 in value due to the effect of rounding off each daily dividend to the nearest full cent. Since the calculation of yield under either procedure described above does not take into consideration any realized or unrealized gains or losses on the Fund's portfolio securities which may affect dividends, the dividends declared during a period may not be the same on an annualized basis as the yield for that period. - High Income Fund, Bond Fund and Strategic Bond Fund Yield Information. The "yield" or "standardized yield" of High Income Fund, Bond Fund and Strategic Bond Fund for a 30-day period is calculated using the following formula set forth in the SEC rules: a-b 6 Yield = 2 ((---- + 1) -1) cd The symbols above represent the following factors: a = dividends and interest earned during the 30-day period. b = expenses accrued for the period (net of any expense reimbursements). c = the average daily number of Fund shares outstanding during the 30-day period that were entitled to receive dividends. d = the Fund's maximum offering price (including sales charge) per share on the last day of the period. Each Fund's yield for a 30-day period may differ from its yield for any other period. The SEC formula assumes that the yield for a 30- day period occurs at a constant rate for a six-month period and is annualized at the end of the six-month period. For the 30 days ended December 31, 1994, the yield of High Income Fund, Bond Fund and Strategic Bond Fund, calculated as described above, was 10.00%, 8.07% and 10.00%, respectively. The "standardized" yield is not based on distributions paid by a Fund to shareholders in the 30-day period, but is a hypothetical yield based upon the return on a Fund's portfolio investments, and may differ from a Fund's "distribution return" described below. - Dividend Yield and Distribution Return. From time to time High Income, Bond and Strategic Bond Funds may quote a "dividend yield" or a "distribution return." Dividend yield is based on that Fund's dividends derived from net investment income during a stated period, and distribution return includes dividends derived from net investment income and from realized capital gains declared during a stated period. Under those calculations, the Fund's dividends and/or distributions declared during a stated period of one year or less (for example, 30 days) are added together, and the sum is divided by the Fund's maximum offering price (equal to its net asset value) per share on the last day of the period. The result may be annualized if the period of measurement is less than one year. The dividend yield of High Income Fund, Bond Fund and Strategic Bond Fund for the quarter ended December 31, 1994, was 8.99%, 7.79% and 9.13%, respectively. Total Return. Each Fund, except Money Fund, may quote its "total return" or "average annual total return." "Average annual total return" ("T" in the formula below) is an average annual compounded rate of return. It is the rate of return based on factors which include a hypothetical initial investment of $1,000 ("P" in the formula below) over a number of years ("n") with an Ending Redeemable Value ("ERV") of that investment, according to the following formula: ( ERV ) 1/n (-----) -1 = Average Annual Total Return ( P ) The cumulative "total return" calculation measures the change in value of a hypothetical investment of $1,000 over a stated period. Its calculation uses some of the same factors as average annual total return, but it does not average the rate of return on an annual basis. Cumulative total return is determined as follows: ERV - P - ------- = Total Return P Both formulas assume that all dividends and capital gains distributions during the period are reinvested at net asset value per share, and that the investment is redeemed at the end of the period. Set forth below is the "average annual total return" and "total return" for each Fund (using the method described above) other than Growth & Income Fund (which commenced operations on May 1, 1995) during the periods indicated:
Average Annual Total Return for: Cumulative Total Fiscal Year Five Year Return From Ended Period Inception(1) Inception(1) Fund 12/31/94 Ended 12/31/94 to 12/31/94 to 12/31/94 High Income Fund -3.18% 15.09% 12.47% 176.94% Bond Fund -1.94% 8.43% 9.78% 148.25% Capital Appreciation Fund -7.59% 11.81% 13.28% 184.34% Growth Fund 0.97% 7.40% 11.44% 187.26% Multiple Strategies Fund -1.95% 7.38% 9.85% 109.91% Global Securities Fund -5.72% N/A 11.15% 54.83% Strategic Bond Fund -3.78% N/A 0.19% 0.32% ______________ (1)Inception dates are as follows: April 30, 1986 for High Income Fund; April 3, 1985 for Bond Fund and Growth Fund; August 15, 1986 for Capital Appreciation Fund; February 9, 1987 for Multiple Strategies Fund; November 12, 1990 for Global Securities Fund; and May 3, 1993 for Strategic Bond Fund.
The total return on an investment made in shares of any one of these Funds may be compared with performance for the same period of either the Standard & Poor's 500 Index ("S&P 500") or the Dow Jones Industrial Average ("Dow"). Both the S&P 500 and the Dow are widely recognized indices of stock market performance consisting of unmanaged groups of common stocks (the Dow consists of 30 such issues). The performance of both indices includes a factor for the reinvestment of income dividends but not capital gains and does not take sales charges or taxes into consideration. Yield and total return information may be useful to investors in reviewing performance of the Funds. However, a number of factors should be taken into account before using such performance information as a basis for comparison with alternative investments. An investment in any of these Funds is not insured. Their performance is not guaranteed and will fluctuate over time. Yield and total return for any Fund for any given past period is not an indication or representation by that Fund of future yields or rates of return on its shares. In comparing the performance of one Fund to another, consideration should be given to each Fund's investment policy, portfolio quality, portfolio maturity, type of instrument held and operating expenses. When comparing yield, total return and investment risk of an investment in any of the Funds with those of other investment instruments, investors should understand that certain other investment alternative such as money market instruments, certificates of deposits ("CDs"), U.S. Government securities or bank accounts provide yields that are fixed or that may vary above a stated minimum, and may be insured or guaranteed. Finally, the performance quotations do not reflect the charges deducted from an Account, as explained in the attached Prospectus for the Policies. If these charges were deducted, that performance would be lower than as described above. Other Performance Comparisons. From time to time the Trust may publish the ranking of any of the Funds by Lipper Analytical Services, Inc. ("Lipper"), a widely-recognized independent service. Lipper monitors the performance of regulated investment companies, including the Funds, and ranks their performance for various periods based on categories relating to investment objectives. The performance of the Funds is ranked against all other funds underlying variable insurance products. The Lipper performance analysis includes the reinvestment of capital gains distributions and income dividends but do not take sales charges or taxes into consideration. From time to time, the Trust may include in its advertisements and sales literature performance information about the Trust cited in other newspapers and periodicals, such as The New York Times, which may include performance quotations from other sources, including Lipper. From time to time the Trust may publish the ranking of the performance of any of the separate accounts that offer its Funds by Morningstar, Inc., an independent mutual fund monitoring service, that ranks mutual funds, including the Funds, monthly in broad investment categories (equity, taxable bond, municipal bond and hybrid) based on risk-adjusted investment return. Investment return measures a fund's three, five and ten-year average annual total returns (when available) in excess of 90-day U.S. Treasury bill returns after considering sales charges and expenses. Risk reflects fund performance below 90-day U.S. Treasury bill monthly returns. Risk and return are combined to produce star rankings reflecting performance relative to the average fund in a fund's category. Five stars is the "highest" ranking (top 10%), four stars is "above average" (next 22.5%), three stars is "average" (next 35%), two stars is "below average" (next 22.5%) and one star is "lowest" (bottom 10%). Rankings are subject to change. About Your Account How To Buy Shares Determination of Net Asset Value Per Share. The sale of shares of the Funds is currently limited to Accounts as explained on the cover page of this Statement of Additional Information and the Prospectus. Such shares are sold at their respective offering prices (net asset values without sales charges) and redeemed at their respective net asset values as described in the Prospectus. The net asset values per share of each Fund is determined as of the close of business of The New York Stock Exchange on each day that the Exchange is open, by dividing the value of the Fund's net assets by the number of shares that are outstanding. The Exchange normally closes at 4:00 P.M., New York time, but may close earlier on some days (for example, in case of weather emergencies or on days falling before a holiday). The Exchange's most recent annual announcement (which is subject to change) states that it will close on New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days. Dealers may conduct trading at times when the Exchange is closed (including weekends and holidays). Trading may occur in debt securities and in foreign securities at times when the NYSE is closed (including weekends and holidays or after 4:00 P.M., New York time, on a regular business day). Because the net asset value of the Funds will not be calculated at such times, the net asset value per share of the Funds may be significantly affected on such days when shareholders may not purchase or redeem shares. The Trust's Board of Trustees has established procedures for the valuation of each Fund's (other than the Money Fund's) securities, generally as follows: (i) equity securities traded on a U.S. securities exchange or on NASDAQ for which last sale information is regularly reported are valued at the last reported sale price on their primary exchange or NASDAQ that day (or, in the absence of sales that day, at values based on the last sales prices of the preceding trading day, or closing bid and asked prices); (ii) securities actively traded on a foreign securities exchange are valued at the last sales price available to the pricing service approved by the Board of Trustees or to the Manager as reported by the principal exchange on which the security is traded; (iii) unlisted foreign securities or listed foreign securities not actively traded are valued at the mean between "bid" and "asked" prices determined by a pricing service approved by the Board of Trustees or by the Manager; (iv) long-term debt securities having a remaining maturity in excess of 60 days are valued at the mean between the "bid" and "asked" prices determined by a portfolio pricing service approved by the Board of Trustees or obtained from active market makers in the security on the basis of reasonable inquiry; (v) debt instruments having a maturity of more than one year when issued, and non-money market type instruments having a maturity of one year or less when issued, which have a remaining maturity of 60 days or less are valued at the mean between the "bid" and "asked" prices determined by a pricing service approved by the Board of Trustees or obtained from active market makers in the security on the basis of reasonable inquiry; (vi) money market-type debt securities having a maturity of less than one year when issued that having a remaining maturity of 60 days or less are valued at cost, adjusted for amortization of premiums and accretion of discounts; and (vii) securities (including restricted securities) not having readily-available market quotations are valued at fair value under the Board's procedures. Trading in securities on European and Asian exchanges and over-the- counter markets is normally completed before the close of The New York Stock Exchange. Events affecting the values of foreign securities traded in stock markets that occur between the time their prices are determined and the close of the Exchange will not be reflected in a Fund's calculation of net asset value unless the Board of Trustees or the Manager, under procedures established by the Board of Trustees, determines that the particular event would materially affect a Fund's net asset value, in which case an adjustment would be made, if necessary. Foreign currency will be valued as close to the time fixed for the valuation date as is reasonably practicable. The values of securities denominated in foreign currency will be converted to U.S. dollars at the prevailing rates of exchange at the time of valuation. In the case of U.S. Government Securities, mortgage-backed securities, foreign fixed-income securities and corporate bonds, when last sale information is not generally available, such pricing procedures may include "matrix" comparisons to the prices for comparable instruments on the basis of quality, yield, maturity, and other special factors involved. The Trust's Board of Trustees has authorized the Manager to employ a pricing service to price U.S. Government Securities, mortgage-backed securities, foreign government securities and corporate bonds. The Trustees will monitor the accuracy of such pricing services by comparing prices used for portfolio evaluation to actual sales prices of selected securities. Puts, calls and Futures held by a Fund are valued at the last sales price on the principal exchange on which they are traded, or on NASDAQ as applicable, as determined by a pricing service approved by the Board of Trustees or by the Manager, or, if there are no sales that day, in accordance with (i), above. Forward currency contracts are valued at the closing price in the London foreign exchange market as provided by a reliable bank, dealer or pricing service. When a Fund writes an option, an amount equal to the premium received by that Fund is included in its Statement of Assets and Liabilities as an asset, and an equivalent deferred credit is included in the liability section. The deferred credit is adjusted ("marked-to-market") to reflect the current market value of the option. In determining a Fund's gain on investments, if a call written by that Fund is exercised, the proceeds are increased by the premium received. If a call or put written by a Fund expires, that Fund has a gain in the amount of the premium; if the Fund enters into a closing purchase transaction, it will have a gain or loss depending on whether the premium was more or less than the cost of the closing transaction. If a Fund exercises a put it holds, the amount that Fund receives on its sale of the underlying investment is reduced by the amount of premium paid by the Fund. Money Fund Net Asset Valuation. Money Fund will seek to maintain a net asset value of $1.00 per share for purchases and redemptions. There can be no assurance that it will do so. The Fund operates under SEC Rule 2a-7, under which the Fund may use the amortized cost method of valuing its shares. The amortized cost method values a security initially at its cost and thereafter assumes a constant amortization of any premium or accretion of any discount, regardless of the impact of fluctuating interest rates on the market value of the security. The method does not take into account unrealized capital gains or losses. The Trust's Board of Trustees has established procedures intended to stabilize Money Fund's net asset value at $1.00 per share. If the Fund's net asset value per share were to deviate from $1.00 by more than 0.5%, Rule 2a-7 requires the Board promptly to consider what action, if any, should be taken. If the Trustees find that the extent of any such deviation may result in material dilution or other unfair effects on shareholders, the Board will take whatever steps it considers appropriate to eliminate or reduce such dilution or unfair effects, including, without limitation, selling portfolio securities prior to maturity, shortening the average portfolio maturity, withholding or reducing dividends, reducing the outstanding number of Fund shares without monetary consideration, or calculating net asset value per share by using available market quotations. As long as it uses Rule 2a-7, Money Fund must abide by certain conditions described above and in the prospectus. For purposes of the Rule, the maturity of an instrument is generally considered to be its stated maturity (or in the case of an instrument called for redemption, the date on which the redemption payment must be made), with special exceptions for certain variable and floating rate instruments. Repurchase agreements and securities loan agreements are, in general, treated as having a maturity equal to the period scheduled until repurchase or return, or if subject to demand, equal to the notice period. While the amortized cost method provides certainty in valuation, there may be periods during which the value of an instrument as determined by amortized cost is higher or lower than the price the Fund would receive if it sold the instrument. During periods of declining interest rates, the daily yield on Money Fund shares may tend to be lower than a like computation made by a fund with identical investments utilizing a method of valuation based upon market prices or estimates of market prices for its portfolio. Conversely, during periods of rising interest rates, the daily yield on Money Fund shares will tend to be higher than that of a portfolio priced at market value. Dividends, Capital Gains and Taxes Distributions and Taxes. The Trust intends for each Fund to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code. By so qualifying, the Funds will not be subject to Federal income taxes on amounts paid by them as dividends and distributions, as described in the Prospectus. Each Fund is treated as a single entity for purposes of determining Federal tax treatment. The Trust will endeavor to ensure that each Fund's assets are so invested so that all such requirements are satisfied, but there can be no assurance that it will be successful in doing so. The Internal Revenue Code requires that a holder (such as a Fund) of a zero coupon security accrue a portion of the discount at which the security was purchased as income each year even though that Fund receives no interest payment in cash on the security during the year. As an investment company, each Fund must pay out substantially all of its net investment income each year. Accordingly, when a Fund holds zero coupon securities, it may be required to pay out as an income distribution each year an amount which is greater than the total amount of cash interest the Fund actually received. Such distributions will be made from the cash assets of that Fund or by liquidation of portfolio securities, if necessary. The Fund may realize a gain or loss from such sales. In the event the Fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than they would have had in the absence of such transactions. Additional Information About the Funds The Custodian and the Transfer Agent. The Bank of New York is the custodian of the Trust's securities. The custodian's responsibilities include safeguarding and controlling the Trust's portfolio securities, collecting income on the portfolio securities, and handling the delivery of portfolio securities to and from the Trust. The Manager has represented to the Trust that its banking relationships with the Custodian have been and will continue to be unrelated to and unaffected by the relationship between the Trust and the Custodian. It will be the practice of the Trust to deal with the Custodian in a manner uninfluenced by any banking relationship the Custodian may have with the Manager and its affiliates. Oppenheimer Shareholder Services, as transfer agent, is responsible for maintaining the Trust's shareholder registry and shareholder accounting records, and for administrative functions. Independent Auditors. The independent auditors of the Trust examine its financial statements and perform other related audit services. They also act as auditors for the Manager and certain other funds advised by the Manager and its affiliates. Appendix A Industry Classifications Aerospace/Defense Air Transportation Auto Parts Distribution Automotive Bank Holding Companies Banks Beverages Broadcasting Broker-Dealers Building Materials Cable Television Chemicals Commercial Finance Computer Hardware Computer Software Conglomerates Consumer Finance Containers Convenience Stores Department Stores Diversified Financial Diversified Media Drug Stores Drug Wholesalers Durable Household Goods Education Electric Utilities Electrical Equipment Electronics Energy Services & Producers Entertainment/Film Environmental Food Gas Utilities Gold Health Care/Drugs Health Care/Supplies & Services Homebuilders/Real Estate Hotel/Gaming Industrial Services Insurance Leasing & Factoring Leisure Manufacturing Metals/Mining Nondurable Household Goods Oil - Integrated Paper Publishing/Printing Railroads Restaurants Savings & Loans Shipping Special Purpose Financial Specialty Retailing Steel Supermarkets Telecommunications - Technology Telephone - Utility Textile/Apparel Tobacco Toys Trucking INDEPENDENT AUDITORS' REPORT The Board of Trustees and Shareholders of Oppenheimer Variable Account Funds: We have audited the accompanying statements of assets and liabilities, including the statements of investments, of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund and Oppenheimer Strategic Bond Fund (all of which are series of Oppenheimer Variable Account Funds) as of December 31, 1994, the related statements of operations for the year then ended, the statements of changes in net assets for the years ended December 31, 1994 and 1993, and the financial highlights for the applicable periods ended December 31, 1994, 1993, 1992, 1991, 1990, 1989, 1988, 1987, and 1986, June 30, 1986 and December 31, 1985. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 1994 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund and Oppenheimer Strategic Bond Fund at December 31, 1994, the results of their operations, the changes in their net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP - ------------------------- DELOITTE & TOUCHE LLP Denver, Colorado January 23, 1995
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Money Fund FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.5% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with Morgan Guaranty Trust Co., 6.15%, dated 12/30/94, to be repurchased at $2,201,503 on 1/3/95, collateralized by FNMA 8.50%, 12/1/24, with a value of $2,263,118 (Cost $2,200,000) $ 2,200,000 $ 2,200,000 - ----------------------------------------------------------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT - 4.5% - ----------------------------------------------------------------------------------------------------------------------------------- DOMESTIC CERTIFICATES OF DEPOSIT - 4.5% - ----------------------------------------------------------------------------------------------------------------------------------- Huntington National Bank, 5.82%, 1/4/95 (Cost $3,999,207) (1) 4,000,000 3,999,207 - ----------------------------------------------------------------------------------------------------------------------------------- DIRECT BANK OBLIGATIONS - 6.7% - ----------------------------------------------------------------------------------------------------------------------------------- Canadian Imperial Holdings, Inc., 6.03%, 2/23/95 3,000,000 2,973,368 ------------------------------------------------------------------------------------------------------------------------- FCC National Bank, 5.82%, 1/4/95 (1) 3,000,000 2,997,712 ---------------- Total Direct Bank Obligations (Cost $5,971,080) 5,971,080 - ----------------------------------------------------------------------------------------------------------------------------------- LETTERS OF CREDIT - 10.4% - ----------------------------------------------------------------------------------------------------------------------------------- Credit Suisse, guaranteeing commercial paper of: Queensland Alumina Ltd., 5.75%, 2/10/95 3,337,000 3,315,680 ------------------------------------------------------------------------------------------------------------------------- Mitsubishi Bank Ltd., guaranteeing commercial paper of: DIC Americas, Inc., 5.85%, 1/18/95 3,000,000 2,991,713 ------------------------------------------------------------------------------------------------------------------------- Sanwa Bank Ltd., guaranteeing commercial paper of: Orix America, Inc., 6.20%, 2/1/95 (2) 3,000,000 2,983,983 ---------------- Total Letters of Credit (Cost $9,291,376) 9,291,376 - ----------------------------------------------------------------------------------------------------------------------------------- SHORT-TERM NOTES - 73.3% - ----------------------------------------------------------------------------------------------------------------------------------- ASSET-BACKED - 12.6% ------------------------------------------------------------------------------------------------------------------------- Beta Finance, Inc., 5.85%, 2/21/95 (2) 2,400,000 2,380,110 ------------------------------------------------------------------------------------------------------------------------- Cooperative Association of Tractor Dealers, Inc., 5.50%, 1/11/95 1,000,000 998,472 ------------------------------------------------------------------------------------------------------------------------- CXC, Inc., 5.75%, 2/10/95 4,000,000 3,974,444 ------------------------------------------------------------------------------------------------------------------------- WCP Funding, 6.10%, 2/13/95 4,000,000 3,970,856 ---------------- 11,323,882 - ----------------------------------------------------------------------------------------------------------------------------------- BANKS - 7.8% ------------------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp., 5.36%, 1/13/95 4,000,000 3,992,853 ------------------------------------------------------------------------------------------------------------------------- NationsBank Corp., 5.42%, 1/18/95 3,000,000 2,992,322 ---------------- 6,985,175 - ----------------------------------------------------------------------------------------------------------------------------------- BROKER/DEALERS - 13.9% ------------------------------------------------------------------------------------------------------------------------- Bear Stearns Cos., Inc., 5.79%, 1/3/95 (1) 2,000,000 2,000,000 ------------------------------------------------------------------------------------------------------------------------- Dean Witter, Discover & Co., 6.10%-6.11%, 2/10/95 3,000,000 2,979,633 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 5.61%, 1/12/95 2,000,000 2,000,000 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 6.22%, 1/3/95 (1) 1,500,000 1,500,000 ------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Group, Inc., 5.49%, 1/3/95 (1) 4,000,000 4,000,000 ---------------- 12,479,633 - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL FINANCE - 1.1% ------------------------------------------------------------------------------------------------------------------------- CIT Group Holdings, Inc., 6.309%, 1/11/95 (1)(3) 1,000,000 1,000,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER FINANCE (PERSONAL LOANS) - 3.3% ------------------------------------------------------------------------------------------------------------------------- Sears Roebuck Acceptance Corp., 5.10%, 1/23/95 3,000,000 2,990,650 - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE - 13.9% ------------------------------------------------------------------------------------------------------------------------- General Electric Capital Corp., 5.79%, 1/3/95 (1) 4,000,000 3,997,889
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Money Fund FACE MARKET VALUE SHORT-TERM NOTES (CONTINUED) AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- ITT Financial Corp., 5.83%, 2/15/95 $ 4,000,000 $ 3,970,850 ------------------------------------------------------------------------------------------------------------------------- Transamerica Finance Corp., 5.10%, 2/3/95 4,500,000 4,478,963 ---------------- 12,447,702 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 4.4% ------------------------------------------------------------------------------------------------------------------------- Allergan, Inc., 6.18%, 2/10/95 4,000,000 3,972,533 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE - 4.4% ------------------------------------------------------------------------------------------------------------------------- Internationale Nederlanden Verzekeringen, NV, guaranteeing commercial paper of: Internationale Nederlanden U.S. Insurance Holdings, Inc., 6.10%, 2/7/95 4,000,000 3,974,922 - ----------------------------------------------------------------------------------------------------------------------------------- LEASE FINANCING - 7.5% ------------------------------------------------------------------------------------------------------------------------- International Lease Finance Corp., 5.85%, 2/24/95 3,000,000 2,973,675 ------------------------------------------------------------------------------------------------------------------------- Sanwa Business Credit Corp., 6.08%, 2/21/95 3,800,000 3,767,269 ---------------- 6,740,944 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 4.4% ------------------------------------------------------------------------------------------------------------------------- Electronic Data Systems Corp., 5.95%, 2/15/95 4,000,000 3,970,251 ---------------- Total Short-Term Notes (Cost $65,885,692) 65,885,692 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 2.3% - ----------------------------------------------------------------------------------------------------------------------------------- Small Business Administration, 9.375%-10.375%, 1/1/95 (Cost $2,079,755) (1) 1,969,925 2,079,755 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $89,427,110) 99.7% 89,427,110 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.3 243,807 ------------------ ---------------- NET ASSETS 100.0% $ 89,670,917 ------------------ ---------------- ------------------ ----------------
1. Variable rate security. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on December 31, 1994. 2. Security purchased in private placement transaction, without registration under the Securities Act of 1933 (the Act). The securities were acquired between November 22, 1994 and December 31, 1994, are carried at amortized cost, and amount to $5,364,093, or 5.98% of the Fund's net assets. 3. Put obligation redeemable at full face value on the date reported. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 6.3% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $6,004,000 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $5,705,931 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $419,161(Cost $6,000,000) $ 6,000,000 $ 6,000,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 2.3% - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 2.3% - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 1.4% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, 8%, Series 1994-C2, Cl. G, 4/25/25 994,250 725,492 ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, 8%, Series 1994-Cl, Cl. E, 6/25/26 789,270 598,612 ---------------- 1,324,104 - ----------------------------------------------------------------------------------------------------------------------------------- RESIDENTIAL - 0.9% ------------------------------------------------------------------------------------------------------------------------- Residential Funding Corp. Mtg. Pass-Through Certificates, 7.97%, Series 1993-J2, Cl. B1, 6/15/23 (5) 1,198,290 850,121 ---------------- Total Mortgage-Backed Obligations (Cost $2,355,538) 2,174,225 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 9.8% - ----------------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 1/12/95 500,000 496,415 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 10/11/95 1,000,000 863,309 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 4/6/95 1,000,000 939,261 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 7/27/95 500,000 447,984 ------------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Bonds, Banco Do Nordeste Brasil, 10.375%, 11/6/95 (5) 750,000 742,500 - ----------------------------------------------------------------------------------------------------------------------------------- Indonesia (Republic of) CD, Bank Negara, 0%, 5/12/95 IDR 2,000,000,000 863,967 - ----------------------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 NZD 1,000,000 684,949 - ----------------------------------------------------------------------------------------------------------------------------------- Japan Development Bank (The) Gtd. Bonds, 5%, 10/1/99 JPY 95,000,000 989,682 - ----------------------------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 5.938%, 1/1/09 (4) 1,000,000 663,750 - ----------------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD 500,000 324,797 - ----------------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 8%, 11/15/95 NZD 1,500,000 948,259 - ----------------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 9%, 11/15/96 NZD 1,250,000 794,465 - ----------------------------------------------------------------------------------------------------------------------------------- Poland (Republic of) Disc. Bonds, 6.813%, 10/27/24 250,000 180,626 - ----------------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., 9%, 5/27/96 500,000 471,250 ---------------- Total Foreign Government Obligations (Cost $9,628,161) 9,411,214 - ----------------------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 1.5% - ----------------------------------------------------------------------------------------------------------------------------------- Pinole, California Redevelopment Agency Tax Allocation Taxable Bonds, Pinole Vista Redevelopment, Series B, 7.65%, 975,000 901,696 8/1/07 ------------------------------------------------------------------------------------------------------------------------- San Joaquin Hills, California Transportation Corridor Agency Toll Road Capital Appreciation Revenue Bonds, Jr. Lien, 0%, 1/1/28 12,500,000 571,400 ---------------- Total Municipal Bonds and Notes (Cost $1,645,000) 1,473,096
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 67.8% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 7.0% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03 $ 1,000,000 $ 1,007,500 ------------------------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 750,000 663,750 ---------------- 1,671,250 - ----------------------------------------------------------------------------------------------------------------------------------- METALS - 2.2% ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 250,000 251,875 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts., 2/15/02 700,000 644,000 ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 0%/13% Sr. Sec. Disc. Nts., 10/15/05 (3) 850,000 531,250 ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 650,000 650,000 ---------------- 2,077,125 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 3.1% ------------------------------------------------------------------------------------------------------------------------- Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02 (2) 100,000 50,500 ------------------------------------------------------------------------------------------------------------------------- PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 310,000 254,200 ------------------------------------------------------------------------------------------------------------------------- Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02 450,000 403,875 ------------------------------------------------------------------------------------------------------------------------- Riverwood International Corp., 10.375% Sr. Sub. Nts., 6/30/04 400,000 406,000 ------------------------------------------------------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., 12/15/04 (5) 350,000 360,500 ------------------------------------------------------------------------------------------------------------------------- Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 500,000 493,750 ------------------------------------------------------------------------------------------------------------------------- Stone Container Corp., 10.75% Fst. Mtg. Nts., 10/1/02 1,000,000 1,000,000 ---------------- 2,968,825 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 21.3% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 1.0% ------------------------------------------------------------------------------------------------------------------------- Envirotest Systems Corp., 9.125% Sr. Nts., 3/15/01 100,000 82,500 ------------------------------------------------------------------------------------------------------------------------- Foamex LP/JPS Automotive Corp., Units (3) 500,000 265,000 ------------------------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 675,000 617,625 ---------------- 965,125 - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT - 3.8% ------------------------------------------------------------------------------------------------------------------------- Hillsborough Holdings Corp., 7.50% Participation Agreement, 12/30/99 (2)(5) 1,000,000 1,575,000 ------------------------------------------------------------------------------------------------------------------------- Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 600,000 573,000 ------------------------------------------------------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (5) 500,000 432,500 ------------------------------------------------------------------------------------------------------------------------- Walter Industries, Inc., 14.625% Sr. Nts., Series B, 1/1/99 (2) 400,000 748,000 ------------------------------------------------------------------------------------------------------------------------- Walter Industries, Inc., 17% Sub. Debs., 1/1/96 (2) 400,000 278,000 ---------------- 3,606,500 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 5.1% ------------------------------------------------------------------------------------------------------------------------- Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 500,000 497,500 ------------------------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 500,000 340,000 5/27/98 ------------------------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 1,000,000 1,085,000 ------------------------------------------------------------------------------------------------------------------------- MacAndrews & Forbes Group, Inc., 12.25% Sub. Nts., 7/1/96 750,000 748,125 ------------------------------------------------------------------------------------------------------------------------- Mary Kay Corp., 12.75% Gtd. Sr. Nts., Series B, 12/6/00 (5) 1,000,000 1,045,000 ------------------------------------------------------------------------------------------------------------------------- Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts., Series B, 11/1/03 1,000,000 955,000 ------------------------------------------------------------------------------------------------------------------------- Revlon Worldwide Corp., 0% Sr. Sec. Disc. Nts., 3/15/98 350,000 207,375 ---------------- 4,878,000 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.2% ------------------------------------------------------------------------------------------------------------------------- Aztar Corp., 13.75% Sr. Sub. Nts., 10/1/04 150,000 152,250 ------------------------------------------------------------------------------------------------------------------------- Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 521,305 553,887
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Lady Luck Gaming Finance Corp., 10.50% Fst. Mtg. Nts., 3/1/01 $ 450,000 $ 200,250 ------------------------------------------------------------------------------------------------------------------------- United Gaming, Inc., 7.50% Cv. Sub. Debs., 9/15/03 320,000 251,200 ---------------- 1,157,587 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 7.4% ------------------------------------------------------------------------------------------------------------------------- Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 750,000 716,250 ------------------------------------------------------------------------------------------------------------------------- Act III Broadcasting, Inc., 9.625% Sr. Sub. Nts., 12/15/03 430,000 396,675 ------------------------------------------------------------------------------------------------------------------------- Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts., 7/15/04 (3) 350,000 189,000 ------------------------------------------------------------------------------------------------------------------------- Chancellor Broadcasting Co., 12.50% Sr. Sub. Nts., 10/1/04 700,000 689,500 ------------------------------------------------------------------------------------------------------------------------- Continental Broadcasting Ltd./Continental Broadcasting Capital Corp., 10.625% Sr. Sub. Nts., 7/1/03 600,000 607,500 ------------------------------------------------------------------------------------------------------------------------- GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10 (5) 487,255 517,099 ------------------------------------------------------------------------------------------------------------------------- Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 500,000 479,375 ------------------------------------------------------------------------------------------------------------------------- New City Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 1,500,000 1,470,000 ------------------------------------------------------------------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 990,000 ------------------------------------------------------------------------------------------------------------------------- Sinclair Broadcasting Group, Inc., 10% Sr. Sub. Nts., 12/15/03 345,000 324,300 ------------------------------------------------------------------------------------------------------------------------- Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01 700,000 731,500 ---------------- 7,111,199 - ----------------------------------------------------------------------------------------------------------------------------------- REAL ESTATE DEVELOPMENT - 1.0% ------------------------------------------------------------------------------------------------------------------------- Olympia & York First Canadian Place Ltd., 11% Debs., Series 3, 11/4/49 (2)CAD 1,000,000 455,377 ------------------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 650,000 546,000 ---------------- 1,001,377 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL - 1.8% ------------------------------------------------------------------------------------------------------------------------- Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 700,000 546,000 ------------------------------------------------------------------------------------------------------------------------- International Semi-Tech Microelectronics, Inc., 0%/11.50% Sr. Sec. Disc. Nts., 8/15/03 (3) 1,500,000 645,000 ------------------------------------------------------------------------------------------------------------------------- Zale Delaware, Inc., 11% Gtd. 2nd Priority Sr. Sec. Nts., 7/30/00 500,000 501,250 ---------------- 1,692,250 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 4.1% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD - 0.0% ------------------------------------------------------------------------------------------------------------------------- Kash 'N Karry Food Stores, Inc., 14% Sub. Debs., 2/1/01 (2) 300,000 111,000 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 2.4% ------------------------------------------------------------------------------------------------------------------------- Di Giorgio Corp., 12% Sr. Nts., 2/15/03 700,000 658,000 ------------------------------------------------------------------------------------------------------------------------- Duane Reade, 12% Sr. Nts., Series B, 9/15/02 250,000 211,250 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 11.25% Sr. Nts., 7/15/00 250,000 222,500 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 1,350,000 533,250 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 750,000 626,250 ---------------- 2,251,250 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 1.7% ------------------------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., Units (5) 700 689,500 ------------------------------------------------------------------------------------------------------------------------- Total Renal Care, Inc., Units 1,200,000 906,000 ---------------- 1,595,500 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 3.2% - ----------------------------------------------------------------------------------------------------------------------------------- BP America, Inc., 10.875% Nts., 8/1/01 CAD 350,000 261,530 ------------------------------------------------------------------------------------------------------------------------- Maxus Energy Corp., 11.50% Debs., 11/15/15 800,000 758,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- Maxus Energy Corp., 8.50% Debs., 4/1/08 $ 500,000 $ 395,000 ------------------------------------------------------------------------------------------------------------------------- OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 750,000 836,250 ------------------------------------------------------------------------------------------------------------------------- Presidio Oil Co., 11.50% Sr. Sec. Nts., Series B, 9/15/00 925,000 689,125 ------------------------------------------------------------------------------------------------------------------------- Presidio Oil Co., 13.675% Sr. Sub. Gas Indexed Nts., Series B, 7/15/02 (4) 150,000 93,000 ---------------- 3,032,905 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 7.1% - ----------------------------------------------------------------------------------------------------------------------------------- Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 1,600,000 1,672,000 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15% CD, 8/28/95 (7)CLP 417,450,058 1,040,893 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15.20% CD, 11/20/95 (7)CLP 431,553,156 1,076,058 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15.20% CD, 9/1/95 (7)CLP 419,050,049 1,044,882 ------------------------------------------------------------------------------------------------------------------------- ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 (5) 369,597 406,557 ------------------------------------------------------------------------------------------------------------------------- Nacolah Holding Corp., 9.50% Sr. Nts., 12/1/03 650,000 578,500 ------------------------------------------------------------------------------------------------------------------------- SBC Finance (C.I.) Ltd., 5.50% Swiss Bank Corp. Gtd. Nts., 9/30/97 CHF 1,280,000 987,146 ---------------- 6,806,036 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 1.9% ------------------------------------------------------------------------------------------------------------------------- EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 500,000 431,250 ------------------------------------------------------------------------------------------------------------------------- Farley, Inc., 0% Sub. Debs., 12/30/12 115,000 12,075 ------------------------------------------------------------------------------------------------------------------------- Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01 640,000 720,000 ------------------------------------------------------------------------------------------------------------------------- Terex Corp., 13% Sr. Nts., 8/1/96 (5) 688,000 651,880 ---------------- 1.815,205 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 3.1% ------------------------------------------------------------------------------------------------------------------------- AMR Corp., 10% Nts., 4/15/21 825,000 799,105 ------------------------------------------------------------------------------------------------------------------------- Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 1,200,000 1,134,000 ------------------------------------------------------------------------------------------------------------------------- Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03 (3) 2,000,000 1,010,000 ---------------- 2,943,105 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 15.9% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 1.0% ------------------------------------------------------------------------------------------------------------------------- GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 300,000 231,000 ------------------------------------------------------------------------------------------------------------------------- GPA Holland BV, 9.50% Medium-Term Nts., Series A, 12/15/01 (5) 500,000 332,500 ------------------------------------------------------------------------------------------------------------------------- Rohr, Inc., 11.625% Sr. Nts., 5/15/03 400,000 398,000 ---------------- 961,500 - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 5.7% ------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04 (3) 1,000,000 450,000 ------------------------------------------------------------------------------------------------------------------------- Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 500,000 450,000 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04 500,000 502,500 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 4/1/23 200,000 180,000 ------------------------------------------------------------------------------------------------------------------------- Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 650,000 599,625 ------------------------------------------------------------------------------------------------------------------------- Echostar Communications Corp., Units 1,100,000 574,750 ------------------------------------------------------------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., Series B, 11/1/03 (4) 1,000,000 905,000 ------------------------------------------------------------------------------------------------------------------------- Marcus Cable Operating Co. LP/Marcus Capital Corp., 0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04 (3) 1,500,000 795,000 ------------------------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,000,000 1,037,500 ---------------- 5,494,375
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 7.2% ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (3)(5) $ 1,250,000 $ 815,775 ------------------------------------------------------------------------------------------------------------------------- Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3) 2,000,000 1,310,000 ------------------------------------------------------------------------------------------------------------------------- Comcast Cellular Corp., 0% Nts., Series B, 3/5/00 500,000 342,500 ------------------------------------------------------------------------------------------------------------------------- Horizon Cellular Telephone LP/Horizon Finance Corp., 0%/11.375% Sr. Sub. Disc. Nts., 10/1/00 (3) 1,500,000 1,050,000 ------------------------------------------------------------------------------------------------------------------------- MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3) 1,000,000 597,500 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (3) 2,000,000 1,240,000 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 9.75% Sr. Sec. Nts., 8/1/00 500,000 473,750 ------------------------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01 (5)(9) 1,000,000 665,000 ------------------------------------------------------------------------------------------------------------------------- USA Mobile Communications, Inc. II, 14% Sr. Nts., 11/1/04 400,000 402,500 ---------------- 6,897,025 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 2.0% ------------------------------------------------------------------------------------------------------------------------- Dell Computer Corp., 11% Sr. Nts., 8/15/00 500,000 525,000 ------------------------------------------------------------------------------------------------------------------------- Imax Corp., 7%/10% Sr. Nts., 3/1/01 (8) 1,600,000 1,336,000 ---------------- 1,861,000 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 4.2% - ----------------------------------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% 2nd Lease Obligation Bonds, 6/1/17 2,070,000 1,481,778 ------------------------------------------------------------------------------------------------------------------------- El Paso Electric Co., 10.375% Lease Obligation Debs., 1/2/11 (2) 900,000 468,705 ------------------------------------------------------------------------------------------------------------------------- El Paso Funding Co., 10.75% Debs., 4/1/13 (2) 750,000 390,574 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 600,000 544,088 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.30% Lease Obligation Bonds, Series 1986A, 1/15/14 1,000,000 917,336 ------------------------------------------------------------------------------------------------------------------------- Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08 (5) 250,000 216,250 ---------------- 4,018,731 ---------------- Total Corporate Bonds and Notes (Cost $68,797,660) 64,916,870 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 3.3% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 2.2% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.1% ------------------------------------------------------------------------------------------------------------------------- Leaseway Transportation Corp. (2) 11,142 123,955 - ----------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 0.1% ------------------------------------------------------------------------------------------------------------------------- New World Communications Group, Inc., Cl. A (2) 4,964 58,327 - ----------------------------------------------------------------------------------------------------------------------------------- HOMEBUILDING - 0.2% ------------------------------------------------------------------------------------------------------------------------- Triangle Wire & Cable, Inc. (2)(5) 21,111 84,444 ------------------------------------------------------------------------------------------------------------------------- Trizec, Ltd. (2) 8,410 56,959 ---------------- 141,403 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA (5) 203,250 234,225 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 0.5% ------------------------------------------------------------------------------------------------------------------------- Capital Gaming, Inc. (2) 25,336 76,008 ------------------------------------------------------------------------------------------------------------------------- Gillett Holdings, Inc., Cl. 1 (2)(5) 10,355 203,217
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Hollywood Casino Corp. (2) 31,666 $ 182,078 ---------------- 461,303 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. 20,239 389,601 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT, GENERAL AND SPECIALTY - 0.0% ------------------------------------------------------------------------------------------------------------------------- Finlay Enterprises, Inc., Cl. A (2) 2,000 30,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 0.7% ------------------------------------------------------------------------------------------------------------------------- Zale Corp. (2) 56,802 681,624 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 0.7% - ----------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 0.7% ------------------------------------------------------------------------------------------------------------------------- Petrolane, Inc., Cl. B 45,360 629,370 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE - 0.2% ------------------------------------------------------------------------------------------------------------------------- ECM Fund L.P.I. (5) 150 150,000 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 0.2% ------------------------------------------------------------------------------------------------------------------------- Berg Electronics Holdings Corp. (2)(5) 46,220 207,990 ---------------- Total Common Stocks (Cost $2,608,222) 3,107,798 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 5.3% - ----------------------------------------------------------------------------------------------------------------------------------- AK Steel Holding Corp., 7% Cv. Stock Appreciation Income Linked Securities 10,000 312,500 ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 9% Exchangeable Notes for Common Stock of Lyondell Petrochemical Co., 9/15/97 17,000 444,124 ------------------------------------------------------------------------------------------------------------------------- Berg Electronics Holdings Corp., $3.3438, Series E 12,306 313,803 ------------------------------------------------------------------------------------------------------------------------- California Federal Bank, 10.625% Non-Cum., Series B 5,000 501,250 ------------------------------------------------------------------------------------------------------------------------- Dell Computer Corp., $7.00 Cv., Series A (5) 2,500 431,250 ------------------------------------------------------------------------------------------------------------------------- First Nationwide Bank, 11.50% Non-Cum. 7,500 735,000 ------------------------------------------------------------------------------------------------------------------------- Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E 16,500 459,938 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum Corp., 8.255% Provisionally Redeemable Income Debt Exchangeable for Stock 40,700 432,438 ------------------------------------------------------------------------------------------------------------------------- K-III Communications Corp., $11.625 Exch., Series B (6) 6,698 643,067 ------------------------------------------------------------------------------------------------------------------------- Navistar International Corp., $6.00 Cv., Series G 2,500 128,750 ------------------------------------------------------------------------------------------------------------------------- Offshore Pipelines, Inc., $2.25 Cum. Cv. Exch. 5,000 245,000 ------------------------------------------------------------------------------------------------------------------------- Pantry Pride, Inc., $14.875 Exch., Series B 2,000 192,000 ------------------------------------------------------------------------------------------------------------------------- Prime Retail, Inc., $19.00 Cv., Series B 14,000 266,000 ---------------- Total Preferred Stocks (Cost $4,909,991) 5,105,120 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.9% - ----------------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 5,000 11,250 ------------------------------------------------------------------------------------------------------------------------- Ames Department Stores, Inc., Excess Cash Flow Payment Certificates, Series AG-7A 12,400 124 ------------------------------------------------------------------------------------------------------------------------- Ames Department Stores, Inc., Litigation Trust 39,658 397 ------------------------------------------------------------------------------------------------------------------------- Capital Gaming International, Inc. Wts., Exp. 2/99 21,112 15,834 ------------------------------------------------------------------------------------------------------------------------- Casino America, Inc. Wts., Exp. 11/96 1,631 816 ------------------------------------------------------------------------------------------------------------------------- Digicon, Inc. Wts., Exp. 7/96 4,699 293 ------------------------------------------------------------------------------------------------------------------------- Eye Care Centers of America, Inc. Wts., Exp. 10/03 700 3,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer High Income Fund MARKET VALUE RIGHTS, WARRANTS AND CERTIFICATES (CONTINUED) UNITS SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. C, Exp. 12/99 13,481 $ 69,090 ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. D, Exp. 12/01 13,481 75,830 ------------------------------------------------------------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 7/96 71,950 521,638 ------------------------------------------------------------------------------------------------------------------------- Protection One, Inc. Wts., Exp. 11/03 28,000 105,000 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc. Wts., Exp. 8/97 (5) 2,599 52 ------------------------------------------------------------------------------------------------------------------------- Southland Corp. Wts., Exp. 3/96 400 1,000 ------------------------------------------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 7/96 (5) 144 108 ------------------------------------------------------------------------------------------------------------------------- UGI Corp. Wts., Exp. 3/98 6,000 10,200 ---------------- Total Rights, Warrants and Certificates (Cost $514,543) 815,132 FACE AMOUNT - ----------------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 1.3% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00 (5) $ 956,521 815,435 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., Standard & Poor's 500 Index-Linked Nts., 5.788%, 1/25/95 (5) 250,000 292,800 ------------------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co. Inc., Standard & Poor's 500 Index-Linked Nts., 5.60%, 2/6/95 (5) 100,000 116,990 ---------------- Total Structured Instruments (Cost $1,461,322) 1,225,225 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $97,920,437) 98.5% 94,228,680 - ----------------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.5 1,469,629 ------------------ ---------------- NET ASSETS 100.0% $ 95,698,309 ------------------ ---------------- ------------------ ----------------
1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: CAD - Canadian Dollar IDR - Indonesian Rupiah CHF - Swiss Franc JPY - Japanese Yen CLP - Chilean Peso NZD - New Zealand Dollar 2. Non-income producing security. 3. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date. 4. Represents the current interest rate for a variable rate security. 5. Restricted security - See Note 7 of Notes to Financial Statements. 6. Interest or dividend is paid in kind. 7. Indexed instrument for which the principal amount due at maturity is affected by the relative value of a foreign currency. 8. Represents the current interest rate for an increasing rate security. 9. Represents a bond that pays contingent supplemental interest until it converts to a fixed rate of interest at a designated future date. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 11.6% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $15,710,467 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $14,930,519 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $1,096,803 (Cost $15,700,000) $ 15,700,000 $ 15,700,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 12.2% - ----------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY - 7.2% - ----------------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 5.1% ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 8.75%, 12/25/20 3,000,000 3,041,880 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 10.40%, 4/25/19 2,000,000 2,100,680 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security, Trust 240, Cl. 2, 7%, 9/25/23 (4) 1,694,353 631,941 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security, Trust 257, Cl. 2, 7%, 2/25/24 (4) 2,797,923 1,058,839 ---------------- 6,833,340 - ----------------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED - 2.1% ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 6%, 10/20/24 3,056,995 2,897,458 - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL - 4.0% ------------------------------------------------------------------------------------------------------------------------- FDIC Trust, Series 1994-C1, Cl. 2-D, 8.70%, 9/25/25 (2) 1,500,000 1,426,875 ------------------------------------------------------------------------------------------------------------------------- FDIC Trust, Series 1994-C1, Cl. 2-E, 8.70%, 9/25/25 (2) 1,500,000 1,374,844 ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1992-CHF, Cl. C, 8.25%, 12/25/20 1,098,572 1,047,421 ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1994-C1, Cl. A4, 7.25%, 6/25/26 1,536,996 1,512,020 ---------------- 5,361,160 - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1991-M5, Cl. A, 9%, 3/25/17 1,358,728 1,347,902 ---------------- Total Mortgage-Backed Obligations (Cost $16,407,096) 16,439,860 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 24.3% - ----------------------------------------------------------------------------------------------------------------------------------- TREASURY - 24.3% - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.125%, 2/15/23 3,000,000 2,729,061 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.25%, 8/15/22 6,000,000 5,536,871 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.50%, 11/15/24 3,000,000 2,868,750 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 8%, 11/15/21 5,000,000 5,017,184 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 5.875%, 5/15/95 3,000,000 2,994,375 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6%, 12/31/97 3,000,000 2,859,375 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6.375%, 6/30/97 1,000,000 969,062 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.25%, 5/15/04 1,000,000 960,625 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.25%, 8/15/04 6,000,000 5,760,000 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.875%, 6/30/96 1,000,000 1,005,312 -------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE U.S. GOVERNMENT OBLIGATIONS (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 9.25%, 8/15/98 $ 2,000,000 $ 2,087,500 ---------------- Total U.S. Government Obligations (Cost $34,170,590) 32,788,115 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 16.1% - ----------------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 1/12/95 500,000 496,415 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 10/11/95 1,000,000 863,309 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 3/2/95 2,070,000 2,001,074 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 4/6/95 1,000,000 939,261 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 7/27/95 2,084,000 1,867,198 ------------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, 0%, 8/3/95 250,000 232,300 ------------------------------------------------------------------------------------------------------------------------- Corporacion Andina de Fomento Bonds, 6.625%, 10/14/98 (2) 1,000,000 900,000 ------------------------------------------------------------------------------------------------------------------------- Corporacion Andina de Fomento Nts., 7.25%, 4/30/98 (2) 1,000,000 918,750 ------------------------------------------------------------------------------------------------------------------------- Czechoslovakia National Bank Bonds, 7%, 4/6/96 (2) 1,500,000 1,482,188 ------------------------------------------------------------------------------------------------------------------------- Financiera Energetica Nacional Nts., 6.625%, 12/13/96 2,350,000 2,235,438 ------------------------------------------------------------------------------------------------------------------------- Indonesia (Republic of) CD, Bank Negara, 0%, 5/12/95 IDR 3,000,000,000 1,295,951 ------------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 NZD 1,000,000 684,949 ------------------------------------------------------------------------------------------------------------------------- Japan Development Bank (The) Gtd. Bonds, 5%, 10/1/99 JPY 195,000,000 2,031,453 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD 1,250,000 811,993 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 8%, 11/15/95 NZD 1,500,000 948,259 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 9%, 11/15/96 NZD 2,250,000 1,430,037 ------------------------------------------------------------------------------------------------------------------------- South Australia Government Finance Authority Bonds, 10%, 1/15/03 AUD 2,000,000 1,497,979 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 12%, 11/20/98 GBP 550,000 951,362 ------------------------------------------------------------------------------------------------------------------------- Western Australia Treasury Corp. Gtd. Bonds, Series 98, 12.50%, 4/1/98 AUD 200,000 164,390 ---------------- Total Foreign Government Obligations (Cost $22,268,415) 21,752,306 - ----------------------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 2.8% - ----------------------------------------------------------------------------------------------------------------------------------- City of New York Taxable General Obligation Bonds, Series D, 9.90%, 2/1/15 500,000 531,275 ------------------------------------------------------------------------------------------------------------------------- Connecticut State Taxable General Obligation Bonds, 6.625%, 12/15/97 650,000 624,593 ------------------------------------------------------------------------------------------------------------------------- Dade County, Florida Educational Facilities Authority Taxable Exchange Revenue Bonds, University of Miami, MBIA 325,000 346,339 Insured, 7.65%, 4/1/10 ------------------------------------------------------------------------------------------------------------------------- Dade County, Florida Educational Facilities Authority Taxable Exchange Revenue Bonds, University of Miami, MBIA 175,000 192,802 Insured, 9.70%, 4/1/10 ------------------------------------------------------------------------------------------------------------------------- New York State Environmental Facilities Corp. State Service Contract Taxable Revenue Bonds, Series B, 7.30%, 3/15/97 200,000 196,945 ------------------------------------------------------------------------------------------------------------------------- New York State Environmental Facilities Corp. State Service Contract Taxable Revenue Bonds, Series B, 8.15%, 3/15/02 800,000 772,090 ------------------------------------------------------------------------------------------------------------------------- Pinole, California Redevelopment Agency Tax Allocation 670,000 625,107 Taxable Bonds, Pinole Vista Redevelopment, Series B, 8.35%, 8/1/17 ------------------------------------------------------------------------------------------------------------------------- Port of Portland, Oregon Special Obligation Taxable Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 500,000 500,431 ---------------- Total Municipal Bonds and Notes (Cost $3,803,121) 3,789,582
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 30.2% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 4.7% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Quantum Chemical Corp., 10.375% Fst. Mtg. Nts., 6/1/03 $ 2,100,000 $ 2,276,473 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 3.0% ------------------------------------------------------------------------------------------------------------------------- Boise Cascade Corp., 9.90% Nts., 3/15/00 750,000 774,117 ------------------------------------------------------------------------------------------------------------------------- Noranda Forest, Inc., 11% Debs., 7/15/98 CAD 1,000,000 736,088 ------------------------------------------------------------------------------------------------------------------------- R.P. Scherer International Corp., 6.75% Sr. Nts., 2/1/04 1,250,000 1,081,250 ------------------------------------------------------------------------------------------------------------------------- Scotia Pacific Holding Co., 7.95% Timber Collaterized Nts., 7/20/15 1,606,437 1,492,805 ---------------- 4,084,260 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 5.7% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.6% ------------------------------------------------------------------------------------------------------------------------- Chrysler Corp., 10.95% Debs., 8/1/17 800,000 873,248 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 1.7% ------------------------------------------------------------------------------------------------------------------------- Eastman Kodak Co., 10% Nts., 6/15/01 250,000 257,327 ------------------------------------------------------------------------------------------------------------------------- Fruit of the Loom, Inc., 7% Debs., 3/15/11 1,097,000 893,291 ------------------------------------------------------------------------------------------------------------------------- Mattel, Inc., 6.875% Sr. Nts., 8/1/97 700,000 675,235 ------------------------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc., 8.875% Nts., 7/1/96 500,000 504,659 ---------------- 2,330,512 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.2% ------------------------------------------------------------------------------------------------------------------------- Circus Circus Enterprises, Inc., 6.75% Nts., 7/15/03 1,225,000 1,064,427 ------------------------------------------------------------------------------------------------------------------------- Columbia Pictures Entertainment, Inc., 9.875% Sr. Sub. Nts., 2/1/98 500,000 515,472 ---------------- 1,579,899 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/LODGING - 0.5% ------------------------------------------------------------------------------------------------------------------------- Host Marriott Hospitality, Inc., 10.125% Sr. Nts., Series F, 1/15/99 138,000 138,690 ------------------------------------------------------------------------------------------------------------------------- Host Marriott Hospitality, Inc., 10.625% Sr. Nts., Series B, 2/1/00 164,000 164,205 ------------------------------------------------------------------------------------------------------------------------- Host Marriott Hospitality, Inc., 11% Sr. Nts., Series L, 5/1/07 388,000 391,880 ---------------- 694,775 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 1.7% ------------------------------------------------------------------------------------------------------------------------- GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10 (2) 1,169,412 1,241,039 ------------------------------------------------------------------------------------------------------------------------- News America Holdings, Inc., 10.125% Gtd. Sr. Debs., 10/15/12 500,000 532,242 ------------------------------------------------------------------------------------------------------------------------- News America Holdings, Inc., 12% Sr. Nts., 12/15/01 500,000 556,905 ---------------- 2,330,186 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 1.0% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 1.0% ------------------------------------------------------------------------------------------------------------------------- Hook-Superx Inc., 10.125% Sr. Nts., 6/1/02 600,000 610,500 ------------------------------------------------------------------------------------------------------------------------- Revco D.S., Inc., 9.125% Sr. Nts., 1/15/00 750,000 751,875 ---------------- 1,362,375 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 4.5% ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 10.375% Nts., 7/15/95 375,000 380,966 ------------------------------------------------------------------------------------------------------------------------- BP America, Inc., 10.875% Nts., 8/1/01 CAD 650,000 485,698 ------------------------------------------------------------------------------------------------------------------------- Coastal Corp., 11.75% Sr. Debs., 6/15/06 2,000,000 2,135,000 ------------------------------------------------------------------------------------------------------------------------- Coastal Corp., 9.75% Sr. Debs., 8/1/03 200,000 209,452 ------------------------------------------------------------------------------------------------------------------------- Enron Corp., 9.875% Debs., 6/15/03 375,000 406,137 ------------------------------------------------------------------------------------------------------------------------- McDermott, Inc., 9.375% Nts., 3/15/02 400,000 407,163 ------------------------------------------------------------------------------------------------------------------------- Mitchell Energy & Development Corp., 9.25% Sr. Nts., 1/15/02 1,000,000 1,016,446 ------------------------------------------------------------------------------------------------------------------------- Tenneco, Inc., 10% Debs., 3/15/08 400,000 432,972
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- Tenneco, Inc., 7.875% Nts., 10/1/02 $ 650,000 $ 621,512 ---------------- 6,095,346 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 7.2% - ----------------------------------------------------------------------------------------------------------------------------------- American Car Line Co., 8.25% Equipment Trust Certificates, Series 1993-A, 4/15/08 660,000 640,200 ------------------------------------------------------------------------------------------------------------------------- Chemical New York Corp., 9.75% Sub. Cap. Nts., 6/15/99 200,000 207,898 ------------------------------------------------------------------------------------------------------------------------- Citibank, 11.10% CD, 11/15/95 (3) CLP 649,629,998 1,619,823 ------------------------------------------------------------------------------------------------------------------------- Citibank, 15% CD, 8/28/95 (3) CLP 521,812,572 1,301,116 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., 11.25% Sub. Nts., 2/20/01 750,000 842,527 ------------------------------------------------------------------------------------------------------------------------- First Fidelity Bancorporation, 8.50% Sub. Cap. Nts., 4/1/98 100,000 100,619 ------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 5.50% Nts., 12/15/01 300,000 247,797 ------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 7.75% Nts., 4/15/97 700,000 687,697 ------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 8% Nts., 10/1/96 700,000 696,821 ------------------------------------------------------------------------------------------------------------------------- Heller Financial, Inc., 7.75% Nts., 5/15/97 475,000 468,761 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 8.375% Nts., 2/15/99 350,000 336,445 ------------------------------------------------------------------------------------------------------------------------- NBD Bancorp, Inc., 7.25% Sub. Debs., 8/15/04 165,000 151,188 ------------------------------------------------------------------------------------------------------------------------- PaineWebber Group, Inc., 7.75% Sub. Nts., 9/1/02 450,000 411,258 ------------------------------------------------------------------------------------------------------------------------- SBC Finance (C.I.) Ltd., 5.50% Swiss Bank Corp. Gtd. Nts., 9/30/97 CHF 2,570,000 1,982,004 ---------------- 9,694,154 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 1.0% - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 1.0% ------------------------------------------------------------------------------------------------------------------------- AMR Corp., 10% Nts., 4/15/21 975,000 944,397 ------------------------------------------------------------------------------------------------------------------------- Union Pacific Corp., 9.65% Medium-Term Nts., 4/17/00 400,000 420,968 ---------------- 1,365,365 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 4.3% - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 3.9% ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc., 9.15% Debs., 2/1/23 300,000 269,968 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc./Time Warner Entertainment LP, 8.375% Sr. Debs., 3/15/23 1,500,000 1,255,012 ------------------------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 3,600,000 3,735,000 ---------------- 5,259,980 - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 0.4% ------------------------------------------------------------------------------------------------------------------------- GTE Corp., 9.375% Debs., 12/1/00 500,000 520,010 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 1.8% - ----------------------------------------------------------------------------------------------------------------------------------- Commonwealth Edison Co., 6.40% Nts., 10/15/05 275,000 220,162 ------------------------------------------------------------------------------------------------------------------------- Commonwealth Edison Co., 6.50% Nts., 7/15/97 550,000 522,735 ------------------------------------------------------------------------------------------------------------------------- Long Island Lighting Co., 7% Nts., 3/1/04 150,000 119,856 ------------------------------------------------------------------------------------------------------------------------- Public Service Company of Colorado, 8.75% Fst. Mtg. Bonds, 3/1/22 750,000 729,657 ------------------------------------------------------------------------------------------------------------------------- Sonat, Inc., 9.50% Nts., 8/15/99 250,000 259,444 ------------------------------------------------------------------------------------------------------------------------- Southwest Gas Corp., 9.75% Debs., Series F, 6/15/02 500,000 521,319 ---------------- 2,373,173 ---------------- Total Corporate Bonds and Notes (Cost $43,341,744) 40,839,756 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.5% - ----------------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 9% Exchangeable Notes for Common Stock of Lyondell Petrochemical Co., 9/15/97 (Cost $717,850) 25,000 653,125
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York (Singapore Branch), 12.15% CD, 2/3/95 (Cost $600,000) (3) $ 600,000 $ 549,553 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $137,008,816) 98.1% 132,512,297 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.9 2,555,087 ------------------ ---------------- NET ASSETS 100.0% $ 135,067,384 ------------------ ---------------- ------------------ ----------------
1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: AUD - Australian Dollar GBP - Pound Sterling CAD - Canadian Dollar IDR - Indonesian Rupah CHF - Swiss Franc JPY - Japanese Yen CLP - Chilean Peso NZD - New Zealand Dollar 2. Restricted security - See Note 7 of Notes to Financial Statements. 3. Indexed instrument for which the principal amount and/or interest due at maturity is affected by the relative value of a foreign currency. 4. Interest - Only Strips represent the right to receive the monthly interest payment on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed-income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). See accompanying Notes to Financial Statements.
STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 12.6% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $23,415,600 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $22,253,130 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $1,634,726 (Cost $23,400,000) $ 23,400,000 $ 23,400,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 3.0% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 0.9% - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 0.9% ------------------------------------------------------------------------------------------------------------------------- Medaphis Corp., 6.50% Cv. Sub. Nts., 1/1/00 (1) 1,000,000 1,672,500 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 0.4% ------------------------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 (1) 1,000,000 685,000 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 1.7% ------------------------------------------------------------------------------------------------------------------------- Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 (1)(3) 1,070,000 860,666 ------------------------------------------------------------------------------------------------------------------------- Sierra On-Line, Inc., 6.50% Cv. Sub. Nts., 4/1/01 (1) 1,000,000 1,275,000 ------------------------------------------------------------------------------------------------------------------------- Solectron Corp., 0% Cv. Liquid Yield Option Sub. Nts., 5/5/12 1,700,000 971,125 ---------------- 3,106,791 ---------------- Total Convertible Corporate Bonds and Notes (Cost $4,674,033) 5,464,291 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 82.5% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 2.4% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.6% ------------------------------------------------------------------------------------------------------------------------- Geon Co. (The) 30,000 821,250 ------------------------------------------------------------------------------------------------------------------------- Georgia Gulf Corp. (2) 57,000 2,215,875 ---------------- 3,037,125 - ----------------------------------------------------------------------------------------------------------------------------------- STEEL - 0.8% ------------------------------------------------------------------------------------------------------------------------- Birmingham Steel Corp. 71,000 1,420,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 21.7% - ----------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 1.3% ------------------------------------------------------------------------------------------------------------------------- Breed Technologies, Inc. 54,000 1,532,250 ------------------------------------------------------------------------------------------------------------------------- Gentex Corp. (2) 40,000 970,000 ---------------- 2,502,250 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 1.9% ------------------------------------------------------------------------------------------------------------------------- Carnival Corp., Inc., Cl. A 82,000 1,742,500 ------------------------------------------------------------------------------------------------------------------------- Doubletree Corp. (2) 35,000 638,750 ------------------------------------------------------------------------------------------------------------------------- Hospitality Franchise Systems, Inc. (2) 41,000 1,086,500 ---------------- 3,467,750 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 1.6% ------------------------------------------------------------------------------------------------------------------------- Duracraft Corp. (2) 20,000 637,500 ------------------------------------------------------------------------------------------------------------------------- Sunbeam-Oster, Inc. 90,300 2,325,225 ---------------- 2,962,725 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 1.1% ------------------------------------------------------------------------------------------------------------------------- Brunswick Corp. 62,000 1,170,250 ------------------------------------------------------------------------------------------------------------------------- Cannondale Corp. (2) 40,000 410,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Outboard Marine Corp. 25,000 $ 490,625 ---------------- 2,070,875 - ----------------------------------------------------------------------------------------------------------------------------------- RESTAURANTS - 0.9% ------------------------------------------------------------------------------------------------------------------------- Apple South, Inc. 67,500 885,938 ------------------------------------------------------------------------------------------------------------------------- Outback Steakhouse, Inc. (2) 30,500 716,750 ---------------- 1,602,688 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 3.0% ------------------------------------------------------------------------------------------------------------------------- Carson Pirie Scott & Co. (2) 52,000 988,000 ------------------------------------------------------------------------------------------------------------------------- Dollar General Corp. 76,000 2,280,000 ------------------------------------------------------------------------------------------------------------------------- Kohl's Corp. (2) 22,000 874,500 ------------------------------------------------------------------------------------------------------------------------- Nordstrom, Inc. 35,000 1,470,000 ---------------- 5,612,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 8.6% ------------------------------------------------------------------------------------------------------------------------- AnnTaylor Stores, Inc. (2) 45,000 1,546,875 ------------------------------------------------------------------------------------------------------------------------- Bolle America, Inc. (2) 100,000 900,000 ------------------------------------------------------------------------------------------------------------------------- General Nutrition Cos., Inc. (2) 64,400 1,867,600 ------------------------------------------------------------------------------------------------------------------------- Gymboree Corp. (2) 45,000 1,293,750 ------------------------------------------------------------------------------------------------------------------------- Heilig-Meyers Co. 22,500 568,125 ------------------------------------------------------------------------------------------------------------------------- Insurance Auto Auctions, Inc. (2) 35,000 1,069,688 ------------------------------------------------------------------------------------------------------------------------- Micro Warehouse, Inc. (2) 65,000 2,275,000 ------------------------------------------------------------------------------------------------------------------------- Office Depot, Inc. (2) 30,000 720,000 ------------------------------------------------------------------------------------------------------------------------- OfficeMax, Inc. (2) 30,500 808,250 ------------------------------------------------------------------------------------------------------------------------- Rex Stores Corp. (2) 40,000 650,000 ------------------------------------------------------------------------------------------------------------------------- Sports & Recreation, Inc. (2) 35,000 901,250 ------------------------------------------------------------------------------------------------------------------------- Staples, Inc. (2) 45,000 1,113,750 ------------------------------------------------------------------------------------------------------------------------- Strouds, Inc. (2) 19,000 182,875 ------------------------------------------------------------------------------------------------------------------------- Viking Office Products, Inc. (2) 65,000 1,990,625 ---------------- 15,887,788 - ----------------------------------------------------------------------------------------------------------------------------------- SHOES - 1.9% ------------------------------------------------------------------------------------------------------------------------- Nike, Inc., Cl. B 46,000 3,432,750 - ----------------------------------------------------------------------------------------------------------------------------------- TEXTILES: APPAREL MANUFACTURERS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Cygne Designs, Inc. (2) 50,000 687,500 ------------------------------------------------------------------------------------------------------------------------- Tommy Hilfiger Corp. (2) 42,100 1,899,763 ---------------- 2,587,263 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 22.4% - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: ALCOHOLIC - 1.0% ------------------------------------------------------------------------------------------------------------------------- Canandaigua Wine Co., Inc., Cl. A (2) 50,000 1,900,000 - ----------------------------------------------------------------------------------------------------------------------------------- DRUGS - 5.3% ------------------------------------------------------------------------------------------------------------------------- CIMA Labs, Inc. (2) 60,000 615,000 ------------------------------------------------------------------------------------------------------------------------- Dura Pharmaceuticals, Inc. (2) 65,000 942,500 ------------------------------------------------------------------------------------------------------------------------- Elan Corp. PLC, ADR (2) 45,000 1,603,125 ------------------------------------------------------------------------------------------------------------------------- R.P. Scherer Corp. (2) 70,000 3,176,250 ------------------------------------------------------------------------------------------------------------------------- Roberts Pharmaceutical Corp. (2) 50,000 1,587,500 ------------------------------------------------------------------------------------------------------------------------- Watson Pharmaceuticals, Inc. (2) 75,000 1,968,750 ---------------- 9,893,125 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 1.0% ------------------------------------------------------------------------------------------------------------------------- Hudson Foods, Inc., Cl. A 70,000 1,758,750 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 11.3% ------------------------------------------------------------------------------------------------------------------------- American Medical Response, Inc. (2) 30,000 866,250 ------------------------------------------------------------------------------------------------------------------------- Cephalon, Inc. (2) 30,000 247,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Chiron Corp. (2) 25,000 $ 2,009,375 ------------------------------------------------------------------------------------------------------------------------- Coram Healthcare Corp. (2) 85,000 1,402,500 ------------------------------------------------------------------------------------------------------------------------- Ethical Holdings, Sponsored ADR (2) 50,000 325,000 ------------------------------------------------------------------------------------------------------------------------- Genesis Health Ventures, Inc. (2) 38,000 1,201,750 ------------------------------------------------------------------------------------------------------------------------- Horizon Healthcare Corp. (2) 108,700 3,043,600 ------------------------------------------------------------------------------------------------------------------------- Integrated Health Services, Inc. 67,500 2,666,250 ------------------------------------------------------------------------------------------------------------------------- Lincare Holdings, Inc. (2) 70,000 2,030,000 ------------------------------------------------------------------------------------------------------------------------- Mariner Health Group, Inc. (2) 96,000 2,076,000 ------------------------------------------------------------------------------------------------------------------------- Martek Biosciences Corp. (2) 50,000 475,000 ------------------------------------------------------------------------------------------------------------------------- Matrix Pharmaceutical, Inc. (2) 40,400 555,500 ------------------------------------------------------------------------------------------------------------------------- Omnicare, Inc. 35,000 1,535,625 ------------------------------------------------------------------------------------------------------------------------- PacifiCare Health Systems, Inc. (2) 21,300 1,405,800 ------------------------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc. (2) 15,000 80,157 ------------------------------------------------------------------------------------------------------------------------- Physicians Health Services, Inc., Cl. A (2) 38,400 1,046,400 ---------------- 20,966,707 - ----------------------------------------------------------------------------------------------------------------------------------- HOSPITAL MANAGEMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- Community Psychiatric Centers 95,000 1,045,000 ------------------------------------------------------------------------------------------------------------------------- Ornda Healthcorp (2) 80,000 1,000,000 ------------------------------------------------------------------------------------------------------------------------- Quorum Health Group, Inc. (2) 46,000 874,000 ---------------- 2,919,000 - ----------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 0.7% ------------------------------------------------------------------------------------------------------------------------- Steris Corp. (2) 37,000 1,387,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DRUG STORES - 1.5% ------------------------------------------------------------------------------------------------------------------------- Revco D.S., Inc. (2) 120,000 2,835,000 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 2.6% - ----------------------------------------------------------------------------------------------------------------------------------- OIL AND GAS DRILLING - 1.0% ------------------------------------------------------------------------------------------------------------------------- Cross Timbers Oil Co. 30,800 462,000 ------------------------------------------------------------------------------------------------------------------------- St. Mary Land & Exploration Co. 50,000 662,500 ------------------------------------------------------------------------------------------------------------------------- Stone Energy Corp. (2) 35,000 673,750 ---------------- 1,798,250 - ----------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 1.4% ------------------------------------------------------------------------------------------------------------------------- Halliburton Co. 50,000 1,656,250 ------------------------------------------------------------------------------------------------------------------------- NUMAR Corp. (2) 36,000 351,000 ------------------------------------------------------------------------------------------------------------------------- Weatherford International, Inc. (2) 60,000 585,000 ---------------- 2,592,250 - ----------------------------------------------------------------------------------------------------------------------------------- OIL: EXPLORATION AND PRODUCTION - 0.2% ------------------------------------------------------------------------------------------------------------------------- Newfield Exploration Co. (2) 20,000 395,000 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 2.0% - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Advanta Corp., Cl. B 50,000 1,262,500 ------------------------------------------------------------------------------------------------------------------------- First USA, Inc. 39,400 1,295,275 ---------------- 2,557,775 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: REGIONAL - 0.6% ------------------------------------------------------------------------------------------------------------------------- First Interstate Bancorp 15,000 1,014,375 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 7.2% - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS GROUP - 0.8% ------------------------------------------------------------------------------------------------------------------------- BMC West Corp. (2) 60,000 840,000 ------------------------------------------------------------------------------------------------------------------------- Giant Cement Holding, Inc. (2) 60,000 712,500 ---------------- 1,552,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES - 2.1% ------------------------------------------------------------------------------------------------------------------------- Manpower, Inc. 43,000 $ 1,209,375 ------------------------------------------------------------------------------------------------------------------------- Reynolds & Reynolds Co., Cl. A 67,000 1,675,000 ------------------------------------------------------------------------------------------------------------------------- Sensormatic Electronics Corp. 30,000 1,080,000 ---------------- 3,964,375 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- AER Energy Resources, Inc. (2) 52,000 234,000 ------------------------------------------------------------------------------------------------------------------------- Micrel, Inc. (2) 65,000 942,500 ------------------------------------------------------------------------------------------------------------------------- Molex, Inc., Cl. A 56,250 1,743,750 ---------------- 2,920,250 - ----------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING: DIVERSIFIED INDUSTRIALS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Ultralife Batteries, Inc. (2) 50,000 800,000 - ----------------------------------------------------------------------------------------------------------------------------------- POLLUTION CONTROL - 0.8% ------------------------------------------------------------------------------------------------------------------------- United Waste Systems, Inc. (2) 60,000 1,500,000 - ----------------------------------------------------------------------------------------------------------------------------------- RAILROADS - 0.7% ------------------------------------------------------------------------------------------------------------------------- Southern Pacific Rail Corp. (2) 76,000 1,377,500 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION: MISCELLANEOUS - 0.8% ------------------------------------------------------------------------------------------------------------------------- Covenant Transport, Inc., Cl. A (2) 75,000 1,462,500 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 24.2% - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATION: EQUIPMENT/MANUFACTURERS - 3.4% ------------------------------------------------------------------------------------------------------------------------- Andrew Corp. (2) 31,500 1,645,875 ------------------------------------------------------------------------------------------------------------------------- DSC Communications Corp. (2) 30,000 1,076,250 ------------------------------------------------------------------------------------------------------------------------- Glenayre Technologies, Inc. (2) 23,000 1,328,250 ------------------------------------------------------------------------------------------------------------------------- Tellabs, Inc. (2) 42,000 2,341,500 ---------------- 6,391,875 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES - 8.5% ------------------------------------------------------------------------------------------------------------------------- Compuware Corp. (2) 75,000 2,700,000 ------------------------------------------------------------------------------------------------------------------------- Cornerstone Imaging, Inc. (2) 45,200 689,300 ------------------------------------------------------------------------------------------------------------------------- CUC International, Inc. (2) 36,000 1,206,000 ------------------------------------------------------------------------------------------------------------------------- Davidson & Associates, Inc. (2) 20,000 650,000 ------------------------------------------------------------------------------------------------------------------------- First Data Corp. 60,000 2,842,500 ------------------------------------------------------------------------------------------------------------------------- FTP Software, Inc. (2) 55,000 1,739,375 ------------------------------------------------------------------------------------------------------------------------- HBO & Co. 40,000 1,380,000 ------------------------------------------------------------------------------------------------------------------------- Lotus Development Corp. (2) 40,000 1,640,000 ------------------------------------------------------------------------------------------------------------------------- NETCOM On-Line Communication Services, Inc. (2) 40,000 1,135,000 ------------------------------------------------------------------------------------------------------------------------- Pyxis Corp. (2) 80,000 1,520,000 ------------------------------------------------------------------------------------------------------------------------- 7th Level, Inc. (2) 70,000 367,500 ---------------- 15,869,675 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SYSTEMS - 2.2% ------------------------------------------------------------------------------------------------------------------------- ADFlex Solutions, Inc. (2) 35,000 586,250 ------------------------------------------------------------------------------------------------------------------------- American Power Conversion Corp. (2) 26,000 425,750 ------------------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (2) 20,000 930,000 ------------------------------------------------------------------------------------------------------------------------- EMC Corp. (2) 99,000 2,140,875 ---------------- 4,082,875 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 3.3% ------------------------------------------------------------------------------------------------------------------------- First Alert, Inc. (2) 24,000 351,000 ------------------------------------------------------------------------------------------------------------------------- Recoton Corp. (2) 84,000 1,575,000 ------------------------------------------------------------------------------------------------------------------------- Sanmina Corp. (2) 40,000 1,090,000 ------------------------------------------------------------------------------------------------------------------------- Symbol Technologies, Inc. (2) 47,400 1,463,475 ------------------------------------------------------------------------------------------------------------------------- Teradyne, Inc. (2) 50,000 1,693,750 ---------------- 6,173,225
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 1.5% ------------------------------------------------------------------------------------------------------------------------- Advanced Technology Materials, Inc. (2) 47,800 $ 283,813 ------------------------------------------------------------------------------------------------------------------------- Lam Research Corp. (2) 20,000 745,000 ------------------------------------------------------------------------------------------------------------------------- Novellus Systems, Inc. (2) 21,000 1,050,000 ------------------------------------------------------------------------------------------------------------------------- Tower Semiconductor Ltd. (2) 60,000 660,000 ---------------- 2,738,813 - ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 5.3% ------------------------------------------------------------------------------------------------------------------------- ALC Communications Corp. (2) 68,000 2,116,500 ------------------------------------------------------------------------------------------------------------------------- IDB Communications Group, Inc. (2) 113,750 1,045,076 ------------------------------------------------------------------------------------------------------------------------- LCI International, Inc. (2) 83,400 2,168,400 ------------------------------------------------------------------------------------------------------------------------- LDDS Communications, Inc. (2) 76,354 1,484,131 ------------------------------------------------------------------------------------------------------------------------- Millicom International Cellular SA (2) 50,000 1,506,250 ------------------------------------------------------------------------------------------------------------------------- ProNet, Inc. (2) 100,000 1,450,000 ---------------- 9,770,357 ---------------- Total Common Stocks (Cost $138,044,877) 153,205,391 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- AK Steel Holding Corp., 7% Cv. Stock Appreciation Income 25,000 781,250 Linked Securities (Cost $768,750) UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ----------------------------------------------------------------------------------------------------------------------------------- Tapistron International, Inc. Wts., Exp. 6/97 120,000 33,756 ------------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B Rts., Exp. 9/95 30,000 33,750 ---------------- Total Rights, Warrants and Certificates (Cost $97,860) 67,506 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $166,985,520) 98.5% 182,918,438 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.5 2,855,103 ------------------ ---------------- NET ASSETS 100.0% $ 185,773,541 ------------------ ---------------- ------------------ ----------------
1. Restricted security - See Note 7 of Notes to Financial Statements. 2. Non-income producing security. 3. Interest or dividend is paid in kind. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 12.6% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $8,005,333 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $7,607,908 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $558,881 (Cost $8,000,000) $ 8,000,000 $ 8,000,000 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 82.6% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 3.0% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Georgia Gulf Corp. (1) 17,000 660,875 - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: DIVERSIFIED - 1.6% ------------------------------------------------------------------------------------------------------------------------- FMC Corp. (1) 4,000 231,000 ------------------------------------------------------------------------------------------------------------------------- Monsanto Co. 1,000 70,500 ------------------------------------------------------------------------------------------------------------------------- PPG Industries, Inc. 18,000 668,250 ---------------- 969,750 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Boise Cascade Corp. 10,000 267,500 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 13.4% - ----------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 0.8% ------------------------------------------------------------------------------------------------------------------------- Goodyear Tire & Rubber Co. 15,000 504,375 - ----------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 1.0% ------------------------------------------------------------------------------------------------------------------------- Multimedia, Inc. (1) 12,000 342,000 ------------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B (1) 6,667 270,847 ---------------- 612,847 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 0.6% ------------------------------------------------------------------------------------------------------------------------- King World Productions, Inc. (1) 12,000 414,000 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 0.6% ------------------------------------------------------------------------------------------------------------------------- Maytag Corp. 20,000 300,000 ------------------------------------------------------------------------------------------------------------------------- Newell Co. 5,000 105,000 ---------------- 405,000 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 2.6% ------------------------------------------------------------------------------------------------------------------------- Acclaim Entertainment, Inc. (1) 25,000 359,375 ------------------------------------------------------------------------------------------------------------------------- Brunswick Corp. 30,000 566,250 ------------------------------------------------------------------------------------------------------------------------- Harley-Davidson, Inc. 26,000 728,000 ---------------- 1,653,625 - ----------------------------------------------------------------------------------------------------------------------------------- PUBLISHING - 0.1% ------------------------------------------------------------------------------------------------------------------------- Marvel Entertainment Group, Inc. (1) 4,000 57,000 - ----------------------------------------------------------------------------------------------------------------------------------- RESTAURANTS - 0.6% ------------------------------------------------------------------------------------------------------------------------- McDonald's Corp. 9,000 263,250 ------------------------------------------------------------------------------------------------------------------------- Shoney's, Inc. (1) 10,000 127,500 ---------------- 390,750 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 1.7% ------------------------------------------------------------------------------------------------------------------------- Dollar General Corp. 20,000 600,000 ------------------------------------------------------------------------------------------------------------------------- May Department Stores Co. 14,000 472,500 ---------------- 1,072,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Waban, Inc. (1) 35,000 621,250
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 21,000 $ 446,250 ---------------- 1,067,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 2.7% ------------------------------------------------------------------------------------------------------------------------- CML Group, Inc. 12,000 121,500 ------------------------------------------------------------------------------------------------------------------------- Home Depot, Inc. (The) 14,000 644,000 ------------------------------------------------------------------------------------------------------------------------- Michaels Stores, Inc. (1) 10,000 347,500 ------------------------------------------------------------------------------------------------------------------------- OfficeMax, Inc. (1) 10,000 265,000 ------------------------------------------------------------------------------------------------------------------------- Toys 'R' Us, Inc. (1) 10,000 305,000 ---------------- 1,683,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY APPAREL - 1.0% ------------------------------------------------------------------------------------------------------------------------- Gap, Inc. (The) 20,000 610,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 18.7% - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: SOFT DRINKS - 1.7% ------------------------------------------------------------------------------------------------------------------------- Coca-Cola Co. (The) 21,000 1,081,500 - ----------------------------------------------------------------------------------------------------------------------------------- DRUGS - 2.3% ------------------------------------------------------------------------------------------------------------------------- Pfizer, Inc. 10,000 772,500 ------------------------------------------------------------------------------------------------------------------------- Schering-Plough 9,000 666,000 ---------------- 1,438,500 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 0.9% ------------------------------------------------------------------------------------------------------------------------- ConAgra, Inc. 4,000 125,000 ------------------------------------------------------------------------------------------------------------------------- General Mills, Inc. 3,000 171,000 ------------------------------------------------------------------------------------------------------------------------- IBP, Inc. 10,000 302,500 ---------------- 598,500 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: DIVERSIFIED - 4.1% ------------------------------------------------------------------------------------------------------------------------- Abbott Laboratories 22,000 717,750 ------------------------------------------------------------------------------------------------------------------------- American Home Products Corp. 4,500 282,375 ------------------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 4,500 260,438 ------------------------------------------------------------------------------------------------------------------------- Johnson & Johnson 10,000 547,500 ------------------------------------------------------------------------------------------------------------------------- Smithkline Beecham PLC, ADR Equity Unit 4,000 137,000 ------------------------------------------------------------------------------------------------------------------------- Warner-Lambert Co. 8,000 616,000 ---------------- 2,561,063 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 2.8% ------------------------------------------------------------------------------------------------------------------------- Amgen, Inc. (1) 8,000 472,000 ------------------------------------------------------------------------------------------------------------------------- National Health Laboratories, Inc. 8,000 106,000 ------------------------------------------------------------------------------------------------------------------------- U.S. Healthcare, Inc. 14,000 577,500 ------------------------------------------------------------------------------------------------------------------------- United Healthcare Corp. 13,000 586,625 ---------------- 1,742,125 - ----------------------------------------------------------------------------------------------------------------------------------- HOSPITAL MANAGEMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- Columbia/HCA Healthcare Corp. 12,000 438,000 ------------------------------------------------------------------------------------------------------------------------- HealthCare COMPARE Corp. (1) 16,000 546,000 ---------------- 984,000 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Colgate-Palmolive Co. 4,000 253,500 ------------------------------------------------------------------------------------------------------------------------- Procter & Gamble Co. 10,000 620,000 ---------------- 873,500 - ----------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 2.1% ------------------------------------------------------------------------------------------------------------------------- Cordis Corp. (1) 4,000 242,000 ------------------------------------------------------------------------------------------------------------------------- Medtronic, Inc. 20,000 1,112,500 ---------------- 1,354,500 ----------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- TOBACCO - 1.8% ------------------------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 16,000 $ 920,000 ------------------------------------------------------------------------------------------------------------------------- UST, Inc. 9,000 249,750 ---------------- 1,169,750 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 0.6% - ----------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED INTERNATIONAL - 0.6% ------------------------------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co. 3,500 376,250 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 19.7% - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 9.1% ------------------------------------------------------------------------------------------------------------------------- Advanta Corp., Cl. A 26,000 682,500 ------------------------------------------------------------------------------------------------------------------------- Countrywide Credit Industries, Inc. 28,000 364,000 ------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. 15,000 757,500 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. 8,700 634,012 ------------------------------------------------------------------------------------------------------------------------- First USA, Inc. 20,000 657,500 ------------------------------------------------------------------------------------------------------------------------- Green Tree Financial Corp. 36,000 1,093,500 ------------------------------------------------------------------------------------------------------------------------- MBIA, Inc. 5,000 280,625 ------------------------------------------------------------------------------------------------------------------------- Student Loan Marketing Assn. 7,000 227,500 ------------------------------------------------------------------------------------------------------------------------- SunAmerica, Inc. 13,000 471,250 ------------------------------------------------------------------------------------------------------------------------- Travelers, Inc. 18,000 585,000 ---------------- 5,753,387 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE - 1.6% ------------------------------------------------------------------------------------------------------------------------- AFLAC, Inc. 11,250 360,000 ------------------------------------------------------------------------------------------------------------------------- Conseco, Inc. 4,000 172,500 ------------------------------------------------------------------------------------------------------------------------- Lincoln National Corp. 4,000 140,000 ------------------------------------------------------------------------------------------------------------------------- UNUM Corp. 10,000 377,500 ---------------- 1,050,000 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND CASUALTY - 1.5% ------------------------------------------------------------------------------------------------------------------------- Loews Corp. 7,000 608,125 ------------------------------------------------------------------------------------------------------------------------- USF&G Corp. 22,800 310,650 ---------------- 918,775 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: OTHER - 0.9% ------------------------------------------------------------------------------------------------------------------------- Bank of Boston Corp. 21,000 543,375 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: REGIONAL - 5.8% ------------------------------------------------------------------------------------------------------------------------- Banc One Corp. 12,787 324,470 ------------------------------------------------------------------------------------------------------------------------- First Fidelity Bancorporation 5,000 224,375 ------------------------------------------------------------------------------------------------------------------------- First Interstate Bancorp 11,000 743,875 ------------------------------------------------------------------------------------------------------------------------- Mellon Bank Corp. 7,500 229,688 ------------------------------------------------------------------------------------------------------------------------- Midlantic Corp. 19,000 503,500 ------------------------------------------------------------------------------------------------------------------------- NationsBank Corp. 9,000 406,125 ------------------------------------------------------------------------------------------------------------------------- Shawmut National Corp. 10,000 163,750 ------------------------------------------------------------------------------------------------------------------------- Signet Banking Corp. 8,000 229,000 ------------------------------------------------------------------------------------------------------------------------- SunTrust Banks, Inc. 5,000 238,750 ------------------------------------------------------------------------------------------------------------------------- UJB Financial Corp. 9,000 217,125 ------------------------------------------------------------------------------------------------------------------------- West One Bancorp 15,000 397,500 ---------------- 3,678,158 - ----------------------------------------------------------------------------------------------------------------------------------- MONEY CENTER BANKS - 0.8% ------------------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. 15,000 515,625 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 4.5% - ----------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 1.8% ------------------------------------------------------------------------------------------------------------------------- Canadian Pacific Ltd. 35,000 525,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- ITT Corp. 7,000 $ 620,375 ---------------- 1,145,375 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 1.6% ------------------------------------------------------------------------------------------------------------------------- Emerson Electric Co. 7,000 437,500 ------------------------------------------------------------------------------------------------------------------------- General Electric Co. 11,000 561,000 ---------------- 998,500 - ----------------------------------------------------------------------------------------------------------------------------------- MACHINERY: DIVERSIFIED - 0.6% ------------------------------------------------------------------------------------------------------------------------- Varity Corp. (1) 11,000 398,750 - ----------------------------------------------------------------------------------------------------------------------------------- RAILROADS - 0.5% ------------------------------------------------------------------------------------------------------------------------- Illinois Central Corp. 10,000 307,500 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 20.6% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.7% ------------------------------------------------------------------------------------------------------------------------- Boeing Co. (The) 6,000 280,500 ------------------------------------------------------------------------------------------------------------------------- Northrop Corp. 4,000 168,000 ---------------- 448,500 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES - 7.6% ------------------------------------------------------------------------------------------------------------------------- Automatic Data Processing, Inc. 20,000 1,170,000 ------------------------------------------------------------------------------------------------------------------------- BMC Software, Inc. (1) 13,000 739,375 ------------------------------------------------------------------------------------------------------------------------- Computer Associates International, Inc. 12,000 582,000 ------------------------------------------------------------------------------------------------------------------------- Informix Corp. (1) 15,000 481,875 ------------------------------------------------------------------------------------------------------------------------- Microsoft Corp. (1) 19,400 1,185,825 ------------------------------------------------------------------------------------------------------------------------- Oracle Systems Corp. (1) 11,000 485,375 ------------------------------------------------------------------------------------------------------------------------- Sybase, Inc. (1) 3,000 156,000 ---------------- 4,800,450 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SYSTEMS - 6.5% ------------------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (1) 12,000 558,000 ------------------------------------------------------------------------------------------------------------------------- Compaq Computer Corp. (1) 18,500 730,750 ------------------------------------------------------------------------------------------------------------------------- EMC Corp. (1) 21,000 454,125 ------------------------------------------------------------------------------------------------------------------------- Quantum Corp. (1) 60,000 907,500 ------------------------------------------------------------------------------------------------------------------------- Seagate Technology, Inc. (1) 8,500 204,000 ------------------------------------------------------------------------------------------------------------------------- 3Com Corp. (1) 14,000 721,875 ------------------------------------------------------------------------------------------------------------------------- Western Digital Corp. (1) 34,000 569,500 ---------------- 4,145,750 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 1.1% ------------------------------------------------------------------------------------------------------------------------- Belden, Inc. 30,000 667,500 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 2.2% ------------------------------------------------------------------------------------------------------------------------- Intel Corp. 12,000 766,500 ------------------------------------------------------------------------------------------------------------------------- Texas Instruments, Inc. 6,000 449,250 ------------------------------------------------------------------------------------------------------------------------- VLSI Technology, Inc. (1) 15,000 180,000 ---------------- 1,395,750 - ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 2.5% ------------------------------------------------------------------------------------------------------------------------- AT & T Corp. 25,000 1,256,250 ------------------------------------------------------------------------------------------------------------------------- Hong Kong Telecommunications Ltd., Sponsored ADR 17,000 325,125 ---------------- 1,581,375 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 2.1% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRIC COMPANIES - 0.9% ------------------------------------------------------------------------------------------------------------------------- Empresa Nacional de Electricidad SA, Sponsored ADR 15,000 607,500 - ----------------------------------------------------------------------------------------------------------------------------------- TELEPHONE - 1.2% ------------------------------------------------------------------------------------------------------------------------- BellSouth Corp. 2,500 135,312
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Growth Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- TELEPHONE (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Telefonos de Mexico SA, Sponsored ADR 15,000 $ 615,000 ---------------- 750,312 ---------------- Total Common Stocks (Cost $45,029,800) 52,254,992 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ----------------------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B Rts., Exp. 9/95 (Cost $16,500) 11,000 12,375 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $53,046,300) 95.2% 60,267,367 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 4.8 3,015,807 ------------------ ---------------- NET ASSETS 100.0% $ 63,283,174 ------------------ ---------------- ------------------ ----------------
1. Non-income producing security. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 5.9% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $17,211,467 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $16,357,002 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $1,201,593 (Cost $17,200,000) $ 17,200,000 $ 17,200,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 2.1% - ----------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY - 1.9% - ----------------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED - 1.9% ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 8%, 4/15/23 3,968,026 3,803,472 ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 8%, 7/15/22 1,847,061 1,782,673 ---------------- 5,586,145 - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 0.2% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 797,138 637,212 ---------------- Total Mortgage-Backed Obligations (Cost $6,729,111) 6,223,357 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 13.7% - ----------------------------------------------------------------------------------------------------------------------------------- TREASURY - 13.7% - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6.375%, 8/15/02 5,000,000 4,581,250 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 6.75%, 5/31/97 10,300,000 10,071,473 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 7.625%, 5/31/96 12,500,000 12,523,438 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 9.25%, 8/15/98 9,000,000 9,393,750 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., STRIPS, 0%, 8/15/02 3,900,000 2,164,707 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., STRIPS, 0%, 8/15/03 2,500,000 1,282,297 ---------------- Total U.S. Government Obligations (Cost $40,709,033) 40,016,915 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 9.5% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas, Series 1, 5.625%, 4/1/01 (4)(6) 3,490,713 2,236,057 ------------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 4.25%, 3/31/23 (7) 4,500,000 1,904,766 ------------------------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds, 8.50%, 4/1/02 CAD 1,500,000 1,037,296 ------------------------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds, 9.75%, 12/1/01 CAD 3,000,000 2,212,542 ------------------------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds, 9.75%, 6/1/01 CAD 2,000,000 1,474,315 ------------------------------------------------------------------------------------------------------------------------- Queensland (Government of) Development Authority Global Transferable Registered Nts., 10.50%, 5/15/03 AUD 3,600,000 2,822,410 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Bonds, 11.45%, 8/30/98 ESP 50,000,000 377,270 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Bonds, 13.45%, 4/15/96 ESP 175,000,000 1,376,680 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%, 3/25/00 ESP 350,000,000 2,696,858 ------------------------------------------------------------------------------------------------------------------------- Sweden (Kingdom of) Bonds, 11%, 1/21/99 SEK 7,500,000 1,031,972 ------------------------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 AUD 6,000,000 4,060,296 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Gtd. Cv. Bonds, Series B, 6.25%, 12/31/19 2,000,000 1,065,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Collateralized Fixed Rate Par Bonds, 2,000,000 1,065,000 Series A, 6.25%, 12/31/19
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Collateralized Par Bonds, Series W-A, 6.75%, 3/31/20 $ 4,500,000 $ 2,070,000 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Collateralized Par Bonds, Series W-B, 6.75%, 3/31/20 3,000,000 1,380,000 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Front-Loaded Interest Reduction 2,000,000 918,750 Bonds, Series B, 7%, 3/31/07 ---------------- Total Foreign Government Obligations (Cost $32,988,359) 27,729,212 - ----------------------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- Port of Portland, Oregon Special Obligation Taxable Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 (Cost $500,000) 500,000 500,431 - ----------------------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 18.6% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 2.4% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Harris Chemical North America, Inc., 0%/10.25% Gtd. Sr. Sec. Disc. Nts., 7/15/01 (3) 600,000 496,500 ------------------------------------------------------------------------------------------------------------------------- Quantum Chemical Corp., 10.375% Fst. Mtg. Nts., 6/1/03 500,000 542,017 ------------------------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 300,000 265,500 ---------------- 1,304,017 - ----------------------------------------------------------------------------------------------------------------------------------- METALS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Armco, Inc., 8.50% SF Debs., 9/1/01 200,000 179,000 ------------------------------------------------------------------------------------------------------------------------- Horsehead Industries, Inc., 14% Sub. Nts., 6/1/99 400,000 398,000 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 1,000,000 1,007,500 2/1/03 ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 1,350,000 1,350,000 ---------------- 2,934,500 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01 500,000 516,250 ------------------------------------------------------------------------------------------------------------------------- Malette, Inc., 12.25% Sr. Sec. Nts., 7/15/04 800,000 812,000 ------------------------------------------------------------------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 425,000 394,187 ------------------------------------------------------------------------------------------------------------------------- Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 250,000 246,875 ------------------------------------------------------------------------------------------------------------------------- Stone Container Corp., 9.875% Sr. Nts., 2/1/01 1,000,000 945,000 ---------------- 2,914,312 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.2% ------------------------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 825,000 754,875 - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT - 1.3% ------------------------------------------------------------------------------------------------------------------------- American Standard, Inc., 10.875% Sr. Nts., 5/15/99 500,000 505,000 ------------------------------------------------------------------------------------------------------------------------- Baldwin Co., 10.375% Sr. Nts., Series B, 8/1/03 500,000 332,500 ------------------------------------------------------------------------------------------------------------------------- NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03 500,000 420,000 ------------------------------------------------------------------------------------------------------------------------- Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 1,000,000 955,000 ------------------------------------------------------------------------------------------------------------------------- USG Corp., 10.25% Sr. Sec. Nts., 12/15/02 500,000 511,250 ------------------------------------------------------------------------------------------------------------------------- USG Corp., 9.25% Sr. Nts., Series B, 9/15/01 600,000 555,000 ------------------------------------------------------------------------------------------------------------------------- Walter Industries, Inc., 14.625% Sr. Nts., Series B, 1/1/99 (2) 300,000 561,000 ---------------- 3,839,750 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 0.7% ------------------------------------------------------------------------------------------------------------------------- Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 800,000 796,000 ------------------------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98 1,000,000 680,000
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE NON-CONVERTIBLE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 $ 500,000 $ 542,500 ---------------- 2,018,500 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.0% ------------------------------------------------------------------------------------------------------------------------- Aztar Corp., 11% Sr. Sub. Nts., 10/1/02 475,000 432,250 ------------------------------------------------------------------------------------------------------------------------- GNF Corp., 10.625% Gtd. Fst. Mtg. Nts., Series B, 4/1/03 500,000 332,500 ------------------------------------------------------------------------------------------------------------------------- Hollywood Casino Corp., 14% Sr. Sec. Nts., 4/1/98 1,000,000 990,000 ------------------------------------------------------------------------------------------------------------------------- Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98 400,000 244,000 ------------------------------------------------------------------------------------------------------------------------- Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 1,000,000 850,000 ---------------- 2,848,750 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 0.8% ------------------------------------------------------------------------------------------------------------------------- Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 750,000 719,063 ------------------------------------------------------------------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 990,000 ------------------------------------------------------------------------------------------------------------------------- SCI Television, Inc., 11% Sr. Nts., Series 1, 6/30/05 500,000 500,000 ---------------- 2,209,063 - ----------------------------------------------------------------------------------------------------------------------------------- REAL ESTATE DEVELOPMENT - 0.4% ------------------------------------------------------------------------------------------------------------------------- Casino Magic Finance Corp., 11.50% Fst. Mtg. Nts., 10/15/01 500,000 317,500 ------------------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 950,000 798,000 ---------------- 1,115,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL - 0.6% ------------------------------------------------------------------------------------------------------------------------- Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 1,000,000 967,500 ------------------------------------------------------------------------------------------------------------------------- Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 750,000 710,625 ---------------- 1,678,125 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 2.6% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD - 0.9% ------------------------------------------------------------------------------------------------------------------------- Family Restaurants, Inc., 9.75% Sr. Nts., 2/1/02 1,500,000 1,181,250 ------------------------------------------------------------------------------------------------------------------------- Foodmaker, Inc., 14.25% Sr. Sub. Nts., 5/15/98 500,000 517,500 ------------------------------------------------------------------------------------------------------------------------- Foodmaker, Inc., 9.25% Sr. Nts., 3/1/99 500,000 423,750 ------------------------------------------------------------------------------------------------------------------------- RJR Nabisco, Inc., 8.625% Medium-Term Nts., 12/1/02 500,000 465,258 ---------------- 2,587,758 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 0.9% ------------------------------------------------------------------------------------------------------------------------- AmeriSource Corp., 11.25% Sr. Debs., 7/15/05 (6) 833,381 791,712 ------------------------------------------------------------------------------------------------------------------------- Di Giorgio Corp., 12% Sr. Nts., 2/15/03 250,000 235,000 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 11.25% Sr. Nts., 7/15/00 750,000 667,500 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 350,000 138,250 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series 300,000 250,500 B, 8/1/99 ------------------------------------------------------------------------------------------------------------------------- Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03 500,000 493,750 ---------------- 2,576,712 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 0.8% ------------------------------------------------------------------------------------------------------------------------- American Medical International, Inc., 13.50% Sr. Sub. Nts., 8/15/01 500,000 548,750 ------------------------------------------------------------------------------------------------------------------------- Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04 500,000 502,500 ------------------------------------------------------------------------------------------------------------------------- Farm Fresh, Inc., 12.25% Sr. Nts., 10/1/00 750,000 648,750 ------------------------------------------------------------------------------------------------------------------------- Mediq, Inc., 7.50% Exch. Sub. Debs., 7/15/03 1,000,000 808,750 ---------------- 2,508,750 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 0.7% - ----------------------------------------------------------------------------------------------------------------------------------- Coastal Corp., 11.75% Sr. Debs., 6/15/06 500,000 533,750
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE NON-CONVERTIBLE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- Gulf Canada Resources Ltd., 9.25% Sr. Sub. Debs., 1/15/04 $ 500,000 $ 453,775 ------------------------------------------------------------------------------------------------------------------------- OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 1,000,000 1,115,000 ---------------- 2,102,525 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.9% - ----------------------------------------------------------------------------------------------------------------------------------- Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 1,400,000 1,463,000 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., 11.25% Sub. Nts., 2/20/01 250,000 280,842 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., 9% Sub. Nts., 6/15/99 250,000 254,261 ------------------------------------------------------------------------------------------------------------------------- Pioneer Finance Corp., 13.50% Gtd. Fst. Mtg. Bonds, 12/1/98 1,000,000 685,000 ---------------- 2,683,103 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 1.5% - ----------------------------------------------------------------------------------------------------------------------------------- CONTAINERS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97 500,000 505,000 ------------------------------------------------------------------------------------------------------------------------- Owens-Illinois, Inc., 10% Sr. Sub. Nts., 8/1/02 500,000 490,000 ---------------- 995,000 - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 0.6% ------------------------------------------------------------------------------------------------------------------------- EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 1,250,000 1,078,125 ------------------------------------------------------------------------------------------------------------------------- Pace Industries, Inc., 10.625% Sr. Nts., 12/1/02 500,000 450,000 ------------------------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 (5) 500,000 342,500 ---------------- 1,870,625 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 0.5% ------------------------------------------------------------------------------------------------------------------------- Chrysler Financial Corp., 13.25% Sr. Nts., 10/15/99 500,000 589,082 ------------------------------------------------------------------------------------------------------------------------- Tiphook Financial Corp., 7.125% Gtd. Nts., 5/1/98 100,000 73,750 ------------------------------------------------------------------------------------------------------------------------- Tiphook Financial Corp., 8% Gtd. Nts., 3/15/00 350,000 248,500 ------------------------------------------------------------------------------------------------------------------------- Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 500,000 472,500 ---------------- 1,383,832 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 5.0% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.6% ------------------------------------------------------------------------------------------------------------------------- GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 250,000 192,500 ------------------------------------------------------------------------------------------------------------------------- GPA Holland BV, 9.75% Medium-Term Nts., Series B, 6/10/96 1,000,000 940,000 ------------------------------------------------------------------------------------------------------------------------- Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05 (3) 1,250,000 631,250 ---------------- 1,763,750 - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 1.9% ------------------------------------------------------------------------------------------------------------------------- Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02 1,000,000 960,000 ------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04 (3) 1,200,000 540,000 ------------------------------------------------------------------------------------------------------------------------- Auburn Hills Trust, 12.375% Gtd. Exch. Certificates, 5/1/20 (4) 400,000 521,474 ------------------------------------------------------------------------------------------------------------------------- Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 500,000 450,000 ------------------------------------------------------------------------------------------------------------------------- Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 1,100,000 1,014,750 ------------------------------------------------------------------------------------------------------------------------- Echostar Communications Corp., Units 600,000 313,500 ------------------------------------------------------------------------------------------------------------------------- International CableTel, Inc., 0%/10.875% Sr. Def. Cpn. Nts., 10/15/03 (3) 500,000 257,500 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc./Time Warner Entertainment LP, 10.15% Sr. Nts., 5/1/12 500,000 496,349
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund FACE MARKET VALUE NON-CONVERTIBLE CORPORATE BONDS AND NOTES (CONTINUED) AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 $ 1,000,000 $ 1,037,500 ---------------- 5,591,073 - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 1.5% ------------------------------------------------------------------------------------------------------------------------- Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04 (3) 800,000 420,000 ------------------------------------------------------------------------------------------------------------------------- Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01 500,000 440,000 ------------------------------------------------------------------------------------------------------------------------- Comcast Cellular Corp., 0% Nts., Series B, 3/5/00 1,000,000 685,000 ------------------------------------------------------------------------------------------------------------------------- MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3) 1,500,000 896,250 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (3) 250,000 155,000 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 9.75% Sr. Sec. Nts., 8/1/00 500,000 473,750 ------------------------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01 (5)(8) 750,000 498,750 ------------------------------------------------------------------------------------------------------------------------- USA Mobile Communications, Inc., 9.50% Sr. Nts., Series II, 2/1/04 1,000,000 815,000 ---------------- 4,383,750 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Bell & Howell Holdings Co., 0%/10.75% Sr. Disc. Debs., Series B, 3/1/05 (3) 1,000,000 495,000 ------------------------------------------------------------------------------------------------------------------------- Imax Corp., 7%/10% Sr. Nts., 3/1/01 (7) 600,000 501,000 ------------------------------------------------------------------------------------------------------------------------- Unisys Corp., 13.50% Credit Sensitive Nts., 7/1/97 1,250,000 1,356,250 ------------------------------------------------------------------------------------------------------------------------- Unisys Corp., 9.75% Sr. Nts., 9/15/16 500,000 445,537 ---------------- 2,797,787 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% 2nd Lease Obligation Bonds, 6/1/17 489,000 350,043 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 1,000,000 906,814 ---------------- 1,256,857 - ----------------------------------------------------------------------------------------------------------------------------------- OTHER - 0.1% - ----------------------------------------------------------------------------------------------------------------------------------- MISCELLANEOUS - 0.1% ------------------------------------------------------------------------------------------------------------------------- United States Banknote Corp., 11.625% Sr. Nts., Series B, 8/1/02 380,000 336,300 ---------------- Total Non-Convertible Corporate Bonds and Notes (Cost $59,327,145) 54,455,214 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 46.4% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 3.9% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.1% ------------------------------------------------------------------------------------------------------------------------- Air Products and Chemicals, Inc. (9) 10,000 446,250 ------------------------------------------------------------------------------------------------------------------------- Dow Chemical Co. (The) (9) 8,500 571,625 ------------------------------------------------------------------------------------------------------------------------- IMC Global, Inc. (9) 19,000 821,750 ------------------------------------------------------------------------------------------------------------------------- Praxair, Inc. 41,500 850,750 ------------------------------------------------------------------------------------------------------------------------- Sybron Chemical Industries, Inc. (2) 29,500 457,250 ---------------- 3,147,625 - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: DIVERSIFIED - 0.9% ------------------------------------------------------------------------------------------------------------------------- ARCO Chemical Co. 25,400 1,117,600
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: DIVERSIFIED (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Bayer AG, Sponsored ADR (2) 70,000 $ 1,621,270 ---------------- 2,738,870 - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: SPECIALTY - 0.1% ------------------------------------------------------------------------------------------------------------------------- Goldschmidt (T.H.) AG 750 401,609 - ----------------------------------------------------------------------------------------------------------------------------------- METAL: MISCELLANEOUS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Brush Wellman, Inc. 69,300 1,204,088 ------------------------------------------------------------------------------------------------------------------------- Inco Ltd. 22,700 649,787 ---------------- 1,853,875 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 0.9% ------------------------------------------------------------------------------------------------------------------------- Georgia-Pacific Corp. 11,000 786,500 ------------------------------------------------------------------------------------------------------------------------- Indah Kiat Pulp & Paper Corp. 99,400 113,057 ------------------------------------------------------------------------------------------------------------------------- Louisiana-Pacific Corp. 30,400 828,400 ------------------------------------------------------------------------------------------------------------------------- MacMillan Bloedel Ltd. 57,800 715,275 ------------------------------------------------------------------------------------------------------------------------- PT Pabrik Kertas Tjiwi Kimia 40,000 74,613 ---------------- 2,517,845 - ----------------------------------------------------------------------------------------------------------------------------------- STEEL - 0.3% ------------------------------------------------------------------------------------------------------------------------- Inland Steel Industries, Inc. (2)(9) 22,000 772,750 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 8.6% - ----------------------------------------------------------------------------------------------------------------------------------- AIRLINES - 0.3% ------------------------------------------------------------------------------------------------------------------------- AMR Corp. (2) 14,000 745,500 - ----------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 0.1% ------------------------------------------------------------------------------------------------------------------------- Excel Industries, Inc. 30,000 416,250 - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Fiat SpA (2) 280,000 1,039,050 ------------------------------------------------------------------------------------------------------------------------- Mahindra & Mahindra Ltd., GDR 10,000 111,575 ---------------- 1,150,625 - ----------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 1.2% ------------------------------------------------------------------------------------------------------------------------- Capital Cities/ABC, Inc. 10,000 852,500 ------------------------------------------------------------------------------------------------------------------------- Comcast Corp. Special, Cl. A 67,350 1,056,553 ------------------------------------------------------------------------------------------------------------------------- SFX Broadcasting, Inc., Cl. A (2) 56,100 1,037,850 ------------------------------------------------------------------------------------------------------------------------- TeleCommunications, Inc., Cl. A (2) 27,000 587,250 ---------------- 3,534,153 - ----------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 0.7% ------------------------------------------------------------------------------------------------------------------------- King World Productions, Inc. (2) 23,000 793,500 ------------------------------------------------------------------------------------------------------------------------- MGM Grand, Inc. (2)(9) 27,000 651,375 ------------------------------------------------------------------------------------------------------------------------- Sega Enterprises 11,500 662,774 ---------------- 2,107,649 - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Circus Circus Enterprises, Inc. (2) 30,800 716,100 - ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Chromcraft Revington, Inc. (2) 50,000 1,100,000 - ----------------------------------------------------------------------------------------------------------------------------------- LEISURE TIME - 0.8% ------------------------------------------------------------------------------------------------------------------------- Caesar's World, Inc. (2)(9) 19,600 1,308,300 ------------------------------------------------------------------------------------------------------------------------- Eastman Kodak Co. 15,400 735,350 ------------------------------------------------------------------------------------------------------------------------- International Game Technology (9) 23,600 365,800 ---------------- 2,409,450 - ----------------------------------------------------------------------------------------------------------------------------------- PUBLISHING - 0.7% ------------------------------------------------------------------------------------------------------------------------- Bowne & Co., Inc 46,000 799,250 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc. 17,100 600,638
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- PUBLISHING (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Wolters Kluwer NV 10,167 $ 752,280 ---------------- 2,152,168 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 0.3% ------------------------------------------------------------------------------------------------------------------------- Dillard Department Stores, Inc., Cl. A 30,000 802,500 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Price/Costco, Inc. (2) 50,000 643,750 ------------------------------------------------------------------------------------------------------------------------- Waban, Inc. (2)(9) 55,000 976,250 ---------------- 1,620,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Castorama Dubois Investissements LP 4,086 510,675 ------------------------------------------------------------------------------------------------------------------------- CML Group, Inc. (9) 66,400 672,300 ------------------------------------------------------------------------------------------------------------------------- Toys 'R' Us, Inc. (2) 27,700 844,850 ------------------------------------------------------------------------------------------------------------------------- Venture Stores, Inc. 67,000 778,875 ---------------- 2,806,700 - ----------------------------------------------------------------------------------------------------------------------------------- SHOES - 0.2% ------------------------------------------------------------------------------------------------------------------------- Justin Industries, Inc. 60,000 712,500 - ----------------------------------------------------------------------------------------------------------------------------------- TEXTILES: APPAREL MANUFACTURERS - 1.1% ------------------------------------------------------------------------------------------------------------------------- Authentic Fitness Corp. (2) 59,400 824,175 ------------------------------------------------------------------------------------------------------------------------- Cone Mills Corp. (2) 42,200 501,125 ------------------------------------------------------------------------------------------------------------------------- Fruit of the Loom, Inc., Cl. A (2) 32,400 874,800 ------------------------------------------------------------------------------------------------------------------------- Warnaco Group, Inc. (The), Cl. A (2) 55,000 948,750 ---------------- 3,148,850 - ----------------------------------------------------------------------------------------------------------------------------------- TOYS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Mattel, Inc. (9) 34,350 863,044 ------------------------------------------------------------------------------------------------------------------------- Nintendo Corp. Ltd. 12,000 648,291 ------------------------------------------------------------------------------------------------------------------------- SLM International, Inc. (2) 74,200 190,137 ---------------- 1,701,472 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 8.6% - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: ALCOHOLIC - 0.3% ------------------------------------------------------------------------------------------------------------------------- Guinness PLC 100,000 704,025 - ----------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: SOFT DRINKS - 0.4% ------------------------------------------------------------------------------------------------------------------------- Whitman Corp. 70,000 1,207,500 - ----------------------------------------------------------------------------------------------------------------------------------- COSMETICS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Maybelline, Inc. 22,800 410,400 - ----------------------------------------------------------------------------------------------------------------------------------- DRUGS - 1.5% ------------------------------------------------------------------------------------------------------------------------- Agouron Pharmaceuticals, Inc. (2) 22,000 247,500 ------------------------------------------------------------------------------------------------------------------------- Astra AB Free, Series A 15,500 400,319 ------------------------------------------------------------------------------------------------------------------------- Ciba-Geigy AG 950 566,954 ------------------------------------------------------------------------------------------------------------------------- Lilly (Eli) & Co. (9) 8,000 525,000 ------------------------------------------------------------------------------------------------------------------------- Medeva PLC 342,715 873,969 ------------------------------------------------------------------------------------------------------------------------- Mylan Laboratories, Inc. (9) 48,400 1,306,800 ------------------------------------------------------------------------------------------------------------------------- Nature's Bounty, Inc. (2) 111,000 603,563 ---------------- 4,524,105 - ----------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 0.8% ------------------------------------------------------------------------------------------------------------------------- Chiquita Brands International, Inc. 3 41 ------------------------------------------------------------------------------------------------------------------------- Nestle SA, Sponsored ADR 17,000 809,950 ------------------------------------------------------------------------------------------------------------------------- Sanfilippo (John B.) & Son, Inc. 60,000 330,000 ------------------------------------------------------------------------------------------------------------------------- Sara Lee Corp. 50,800 1,282,700 ---------------- 2,422,691
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- FOOD WHOLESALERS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Food Lion, Inc., Cl. A 114,500 $ 586,813 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: DIVERSIFIED - 1.0% ------------------------------------------------------------------------------------------------------------------------- Abbott Laboratories 28,800 939,600 ------------------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 25,000 1,446,875 ------------------------------------------------------------------------------------------------------------------------- Schering AG 1,025 671,203 ---------------- 3,057,678 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 1.8% ------------------------------------------------------------------------------------------------------------------------- Amgen, Inc. (2)(9) 13,900 820,100 ------------------------------------------------------------------------------------------------------------------------- Biosys, Inc. (2) 74,400 167,400 ------------------------------------------------------------------------------------------------------------------------- Chiron Corp. (2)(9) 8,400 675,150 ------------------------------------------------------------------------------------------------------------------------- Genzyme Corp. (2)(9) 28,900 910,350 ------------------------------------------------------------------------------------------------------------------------- Manor Care, Inc. 41,185 1,127,439 ------------------------------------------------------------------------------------------------------------------------- Matrix Pharmaceutical, Inc. (2) 18,000 247,500 ------------------------------------------------------------------------------------------------------------------------- U.S. Healthcare, Inc. (9) 28,800 1,188,000 ---------------- 5,135,939 - ----------------------------------------------------------------------------------------------------------------------------------- HOSPITAL MANAGEMENT - 0.5% ------------------------------------------------------------------------------------------------------------------------- Novacare, Inc. (2) 72,500 525,625 ------------------------------------------------------------------------------------------------------------------------- Wellpoint Health Networks, Inc., Cl. A (2) 27,000 786,375 ---------------- 1,312,000 - ----------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 1.4% ------------------------------------------------------------------------------------------------------------------------- Biomet, Inc. (2) 52,100 729,400 ------------------------------------------------------------------------------------------------------------------------- Medtronic, Inc. 14,400 801,000 ------------------------------------------------------------------------------------------------------------------------- Mitek Surgical Products, Inc. (2) 54,000 1,336,500 ------------------------------------------------------------------------------------------------------------------------- Nellcor, Inc. (2) 23,000 759,000 ------------------------------------------------------------------------------------------------------------------------- Sofamor Danek Group, Inc. (2) 45,000 585,000 ---------------- 4,210,900 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: FOOD CHAINS - 0.1% ------------------------------------------------------------------------------------------------------------------------- Giant Food, Inc., Cl. A 17,900 389,325 - ----------------------------------------------------------------------------------------------------------------------------------- TOBACCO - 0.4% ------------------------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 20,000 1,150,000 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY - 2.0% - ----------------------------------------------------------------------------------------------------------------------------------- COAL - 0.3% ------------------------------------------------------------------------------------------------------------------------- Ashland Coal, Inc. 24,200 689,700 - ----------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 0.2% ------------------------------------------------------------------------------------------------------------------------- Landmark Graphics Corp. (2) 36,900 664,200 - ----------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED DOMESTIC - 0.7% ------------------------------------------------------------------------------------------------------------------------- Ashland Oil, Inc. 17,000 586,500 ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co. 8,900 905,575 ------------------------------------------------------------------------------------------------------------------------- Unocal Corp. 22,000 599,500 ---------------- 2,091,575 - ----------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED INTERNATIONAL - 0.8% ------------------------------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co. 10,000 1,075,000 ------------------------------------------------------------------------------------------------------------------------- Saga Petroleum AS, Cl. A 12,000 130,396 ------------------------------------------------------------------------------------------------------------------------- Saga Petroleum AS, Cl. B 19,000 196,629 ------------------------------------------------------------------------------------------------------------------------- Total SA, Sponsored ADR 15,701 463,180 ------------------------------------------------------------------------------------------------------------------------- YuKong Ltd., GDR (2)(5) 18,500 291,374 ------------------------------------------------------------------------------------------------------------------------- YuKong Ltd., GDR (2)(5) 9,000 135,000 ---------------- 2,291,579
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 5.1% - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL FINANCE - 0.3% ------------------------------------------------------------------------------------------------------------------------- SG Warburg & Co., Inc. Ords. 76,500 $ 827,018 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 1.3% ------------------------------------------------------------------------------------------------------------------------- American Express Co. (9) 31,500 929,250 ------------------------------------------------------------------------------------------------------------------------- CMAC Investment Corp. 33,600 970,200 ------------------------------------------------------------------------------------------------------------------------- H & R Block, Inc. 15,400 571,725 ------------------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 26,300 940,225 ------------------------------------------------------------------------------------------------------------------------- Santa Anita Realty Enterprises, Inc., Units (5) 30,000 412,500 ---------------- 3,823,900 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE - 0.4% ------------------------------------------------------------------------------------------------------------------------- Bankers Life Holding Corp. 39,500 750,500 ------------------------------------------------------------------------------------------------------------------------- National Mutual Asia Ltd. (2) 150,000 98,875 ------------------------------------------------------------------------------------------------------------------------- UNUM Corp. 13,100 494,525 ---------------- 1,343,900 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: MULTI-LINE - 1.1% ------------------------------------------------------------------------------------------------------------------------- Aetna Life & Casualty Co. 16,800 791,700 ------------------------------------------------------------------------------------------------------------------------- American International Group, Inc. 12,000 1,176,000 ------------------------------------------------------------------------------------------------------------------------- American Re Corp. (2) 36,000 1,161,000 ---------------- 3,128,700 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND CASUALTY - 0.3% ------------------------------------------------------------------------------------------------------------------------- W.R. Berkley Corp. 21,000 787,500 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: OTHER - 0.3% ------------------------------------------------------------------------------------------------------------------------- Banco Frances del Rio Plata 11,000 78,375 ------------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, ADR 1,325 615,478 ------------------------------------------------------------------------------------------------------------------------- Korea First Bank (2) 4,942 68,944 ------------------------------------------------------------------------------------------------------------------------- Turkiye Garanti Bankasi AS, Sponsored ADR (5) 10,000 25,321 ---------------- 788,118 - ----------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: REGIONAL - 0.5% ------------------------------------------------------------------------------------------------------------------------- NationsBank Corp. 35,400 1,597,425 - ----------------------------------------------------------------------------------------------------------------------------------- MONEY CENTER BANKS - 0.7% ------------------------------------------------------------------------------------------------------------------------- Bankers Trust New York Corp. (9) 15,700 869,388 ------------------------------------------------------------------------------------------------------------------------- Chemical Banking Corp. 29,000 1,040,375 ---------------- 1,909,763 - ----------------------------------------------------------------------------------------------------------------------------------- SAVINGS AND LOANS/HOLDING COS. - 0.2% ------------------------------------------------------------------------------------------------------------------------- Golden West Financial Corp. 20,000 705,000 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 7.4% - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS GROUP - 0.5% ------------------------------------------------------------------------------------------------------------------------- Masco Corp. 23,000 520,375 ------------------------------------------------------------------------------------------------------------------------- Owens-Corning Fiberglass Corp. (2) 30,000 960,000 ---------------- 1,480,375 - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES - 0.3% ------------------------------------------------------------------------------------------------------------------------- Borg-Warner Corp. (2) 35,000 341,250 ------------------------------------------------------------------------------------------------------------------------- Sylvan Learning Systems, Inc. (2) 26,100 515,475 ---------------- 856,725 - ----------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 0.9% ------------------------------------------------------------------------------------------------------------------------- Jardine Matheson Holdings Ltd. 50,468 360,391 ------------------------------------------------------------------------------------------------------------------------- Kinnevik Investments AB Free, Series B 24,500 810,727 ------------------------------------------------------------------------------------------------------------------------- Tenneco, Inc. 20,400 867,000 ------------------------------------------------------------------------------------------------------------------------- Wharf Holdings 175,000 590,342 ---------------- 2,628,460
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONTAINERS: METAL AND GLASS - 0.6% ------------------------------------------------------------------------------------------------------------------------- Corning, Inc. 27,200 $ 812,600 ------------------------------------------------------------------------------------------------------------------------- Interpool, Inc. (2) 50,000 743,750 ---------------- 1,556,350 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 1.1% ------------------------------------------------------------------------------------------------------------------------- ASEA AB, Sponsored ADR 10,000 721,250 ------------------------------------------------------------------------------------------------------------------------- C-Cube Microsystems, Inc. (2) 30,000 570,000 ------------------------------------------------------------------------------------------------------------------------- General Electric Co. 20,000 1,020,000 ------------------------------------------------------------------------------------------------------------------------- Methode Electronics, Inc., Cl. A 50,000 850,000 ---------------- 3,161,250 - ----------------------------------------------------------------------------------------------------------------------------------- ENGINEERING AND CONSTRUCTION - 0.7% ------------------------------------------------------------------------------------------------------------------------- Empresas ICA Sociedad Controladora SA de C.V. (9) 33,600 520,800 ------------------------------------------------------------------------------------------------------------------------- Foster Wheeler Corp. 17,000 505,750 ------------------------------------------------------------------------------------------------------------------------- Huarte SA 50,150 468,620 ------------------------------------------------------------------------------------------------------------------------- Insituform Mid-America, Inc., Cl. A 60,000 540,000 ---------------- 2,035,170 - ----------------------------------------------------------------------------------------------------------------------------------- HEAVY DUTY TRUCKS AND PARTS - 0.1% ------------------------------------------------------------------------------------------------------------------------- Spartan Motors, Inc. 24,000 321,000 - ----------------------------------------------------------------------------------------------------------------------------------- MACHINERY: DIVERSIFIED - 0.3% ------------------------------------------------------------------------------------------------------------------------- Harnischfeger Industries, Inc. 26,000 731,250 - ----------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING: DIVERSIFIED INDUSTRIALS - 1.0% ------------------------------------------------------------------------------------------------------------------------- Instrument Systems Corp. (2) 48,750 408,281 ------------------------------------------------------------------------------------------------------------------------- Johnstown America Industries, Inc. 20,000 327,500 ------------------------------------------------------------------------------------------------------------------------- Mannesmann AG 3,287 890,662 ------------------------------------------------------------------------------------------------------------------------- Olin Corp. 11,000 566,500 ------------------------------------------------------------------------------------------------------------------------- Siemens AG, ADR 10,000 837,411 ---------------- 3,030,354 - ----------------------------------------------------------------------------------------------------------------------------------- POLLUTION CONTROL - 0.2% ------------------------------------------------------------------------------------------------------------------------- Waste Management International PLC, Sponsored ADR (2) 55,000 625,625 - ----------------------------------------------------------------------------------------------------------------------------------- RAILROADS - 0.5% ------------------------------------------------------------------------------------------------------------------------- Burlington Northern, Inc. 17,000 818,125 ------------------------------------------------------------------------------------------------------------------------- Chicago & North Western Holdings Corp. (2) 40,400 777,700 ---------------- 1,595,825 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION: MISCELLANEOUS - 1.2% ------------------------------------------------------------------------------------------------------------------------- Airborne Freight Corp. 38,000 779,000 ------------------------------------------------------------------------------------------------------------------------- Consolidated Freightways, Inc. 61,000 1,364,875 ------------------------------------------------------------------------------------------------------------------------- DS Svendborg, Cl. B 10 273,600 ------------------------------------------------------------------------------------------------------------------------- Lisnave-Estaleiros Navais de Lisbona SA (2) 19,000 93,090 ------------------------------------------------------------------------------------------------------------------------- OMI Corp. 22,400 148,400 ------------------------------------------------------------------------------------------------------------------------- Stolt-Nielsen SA 40,000 825,000 ------------------------------------------------------------------------------------------------------------------------- Westmont Berhad Ord. 14,000 87,173 ---------------- 3,571,138 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 9.3% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.6% ------------------------------------------------------------------------------------------------------------------------- General Dynamics Corp. (9) 9,900 430,650 ------------------------------------------------------------------------------------------------------------------------- McDonnell Douglas Corp. (9) 4,000 568,000 ------------------------------------------------------------------------------------------------------------------------- Rockwell International Corp. 17,000 607,750 ---------------- 1,606,400 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES - 3.9% ------------------------------------------------------------------------------------------------------------------------- Bay Networks, Inc. (2)(9) 33,205 979,548 ------------------------------------------------------------------------------------------------------------------------- BMC Software, Inc. (2)(9) 22,600 1,285,375
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE AND SERVICES (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Computer Associates International, Inc. (9) 23,100 $ 1,120,350 ------------------------------------------------------------------------------------------------------------------------- Delrina Corp. (2) 62,000 767,250 ------------------------------------------------------------------------------------------------------------------------- Electronic Arts, Inc. (2) 54,000 1,039,500 ------------------------------------------------------------------------------------------------------------------------- Informix Corp. (2) 20,000 642,500 ------------------------------------------------------------------------------------------------------------------------- Legent Corp. (2)(9) 23,000 661,250 ------------------------------------------------------------------------------------------------------------------------- Lotus Development Corp. (2)(9) 10,100 414,100 ------------------------------------------------------------------------------------------------------------------------- Marcam Corp. (2) 48,300 489,038 ------------------------------------------------------------------------------------------------------------------------- Microsoft Corp. (9) 10,200 623,474 ------------------------------------------------------------------------------------------------------------------------- Novell, Inc. (2) 69,100 1,183,338 ------------------------------------------------------------------------------------------------------------------------- Pyxis Corp. (2)(9) 48,000 912,000 ------------------------------------------------------------------------------------------------------------------------- Symantec Corp. (2) 51,000 892,500 ------------------------------------------------------------------------------------------------------------------------- Trinzic Corp. (2) 80,000 440,000 ---------------- 11,450,223 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER SYSTEMS - 1.3% ------------------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (2)(9) 12,500 581,250 ------------------------------------------------------------------------------------------------------------------------- Norand Corp. (2) 18,500 656,750 ------------------------------------------------------------------------------------------------------------------------- Seagate Technology, Inc. (2) 16,000 384,000 ------------------------------------------------------------------------------------------------------------------------- Sun Microsystems, Inc. (2)(9) 33,000 1,171,500 ------------------------------------------------------------------------------------------------------------------------- Tandem Computers, Inc. (2)(9) 66,000 1,130,250 ---------------- 3,923,750 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: DEFENSE - 0.2% ------------------------------------------------------------------------------------------------------------------------- CAE, Inc. 115,000 614,892 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION - 0.5% ------------------------------------------------------------------------------------------------------------------------- Hewlett-Packard Co. (9) 11,500 1,148,563 ------------------------------------------------------------------------------------------------------------------------- Molecular Dynamics, Inc. (2) 25,000 168,750 ---------------- 1,317,313 - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 0.9% ------------------------------------------------------------------------------------------------------------------------- Intel Corp. 34,500 2,203,688 ------------------------------------------------------------------------------------------------------------------------- Samsung Electronics Co., GDR (2)(5) 476 22,134 ------------------------------------------------------------------------------------------------------------------------- Samsung Electronics Co., Sponsored GDS (2) 8,500 395,250 ---------------- 2,621,072 - ----------------------------------------------------------------------------------------------------------------------------------- OFFICE EQUIPMENT AND SUPPLIES - 0.3% ------------------------------------------------------------------------------------------------------------------------- Xerox Corp. 8,500 841,500 - ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 1.6% ------------------------------------------------------------------------------------------------------------------------- Airtouch Communications, Inc. (2)(9) 46,000 1,339,750 ------------------------------------------------------------------------------------------------------------------------- AT & T Corp. 16,000 804,000 ------------------------------------------------------------------------------------------------------------------------- ECI Telecommunications Ltd. 51,000 694,875 ------------------------------------------------------------------------------------------------------------------------- MCI Communications Corp. 46,300 850,763 ------------------------------------------------------------------------------------------------------------------------- Rogers Cantel Mobile Communications, Inc., Sub. Cl. B (2) 30,500 889,267 ------------------------------------------------------------------------------------------------------------------------- Technology Resources Industries 25,000 79,790 ---------------- 4,658,445 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 1.5% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRIC COMPANIES - 0.5% ------------------------------------------------------------------------------------------------------------------------- Central Puerto SA, ADR (5) 3,000 74,245 ------------------------------------------------------------------------------------------------------------------------- Public Service Enterprise Group, Inc. 35,000 927,500 ------------------------------------------------------------------------------------------------------------------------- Verbund Oest Electriz 9,400 542,929 ---------------- 1,544,674 - ----------------------------------------------------------------------------------------------------------------------------------- NATURAL GAS - 0.3% ------------------------------------------------------------------------------------------------------------------------- Hong Kong & China Gas 244,800 395,500
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- NATURAL GAS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Southwestern Energy Co. 40,000 $ 595,000 ---------------- 990,500 - ----------------------------------------------------------------------------------------------------------------------------------- TELEPHONE - 0.7% ------------------------------------------------------------------------------------------------------------------------- BCE, Inc. 22,000 706,750 ------------------------------------------------------------------------------------------------------------------------- US West, Inc. 35,000 1,246,875 ---------------- 1,953,625 ---------------- Total Common Stocks (Cost $122,460,917) 135,432,161 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 2.2% - ----------------------------------------------------------------------------------------------------------------------------------- Advanced Micro Devices, Inc., Depositary Cv. Exchangeable Preferred Shares Each Representing 1/10th Share of $30 Cv. Exchangeable Preferred Shares 16,200 850,500 ------------------------------------------------------------------------------------------------------------------------- Alumax, Inc., $4.00 Cv., Series A 3,000 362,250 ------------------------------------------------------------------------------------------------------------------------- Chiquita Brands International, Inc., $1.32 Depositary Shares 26,000 357,500 ------------------------------------------------------------------------------------------------------------------------- Cyprus Amax Minerals Co., $4.00 Cv., Series A 12,000 700,500 ------------------------------------------------------------------------------------------------------------------------- Delta Airlines, Inc., $3.50 Cv. Depositary Shares, Series C 13,200 577,500 ------------------------------------------------------------------------------------------------------------------------- FHP International Corp., Series A 45,900 1,124,550 ------------------------------------------------------------------------------------------------------------------------- First Chicago Corp., Debt Exchangeable for Common Stock of Nextel Communications, Inc., 5.50%, 2/15/97 25,000 437,500 ------------------------------------------------------------------------------------------------------------------------- K-III Communications Corp., Sr. Exch., Series A 20,000 505,000 ------------------------------------------------------------------------------------------------------------------------- Pantry Pride, Inc., $14.875 Exch., Series B 8,000 768,000 ------------------------------------------------------------------------------------------------------------------------- Sap AG 1,050 598,833 ---------------- Total Preferred Stocks (Cost $5,959,788) 6,282,133 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ----------------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 6,000 13,500 ------------------------------------------------------------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 7/96 16,412 118,987 ---------------- Total Rights, Warrants and Certificates (Cost $36,927) 132,487 ------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $285,911,280) 98.6% 287,971,910 ------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.4 4,095,294 ------------------ ---------------- NET ASSETS 100.0% $ 292,067,204 ------------------ ---------------- ------------------ ----------------
1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: AUD - Australian Dollar ESP - Spanish Peseta CAD - Canadian Dollar SEK - Swedish Krona 2. Non-income producing security. 3. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date. 4. Represents the current interest rate for a variable rate security. 5. Restricted security - See Note 7 of Notes to Financial Statements. 6. Interest or dividend is paid in kind. 7. Represents the current interest rate for an increasing rate security. 8. Represents a bond that pays contingent supplemental interest until it converts to a fixed rate of interest at a designated future date.
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund - ----------------------------------------------------------------------------------------------------------------------------------- 9. Securities with an aggregate market value of $7,904,988 are held in escrow to cover outstanding call options, as follows: SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED SEE NOTE 1 ------- ----------- -------- -------- ------------- Air Products and Chemicals, Inc. 3,000 3/95 50.00 $ 11,159 $ 1,312 Airtouch Communications, Inc. 7,500 1/95 30.00 7,743 2,812 American Express Co. 7,000 4/95 35.00 11,165 1,750 Amgen, Inc. 4,000 4/95 60.00 19,880 16,000 Bankers Trust New York Corp. 3,000 1/95 70.00 13,410 187 Bay Networks, Inc. 6,600 3/95 30.00 14,652 18,562 BMC Software, Inc. 6,600 5/95 60.00 25,409 33,000 Cabletron Systems, Inc. 2,500 1/95 48.00 4,845 2,344 Cabletron Systems, Inc. 1,000 4/95 50.00 4,220 2,687 Caesar's World, Inc. 4,600 2/95 50.00 15,941 80,500 Chiron Corp. 2,000 1/95 75.00 7,690 10,500 Chiron Corp. 3,000 4/95 80.00 20,159 3,375 CML Group, Inc. 13,200 1/95 12.50 14,454 1,650 Computer Associates International, Inc. 6,500 4/95 50.00 32,466 23,562 DowChemical Co. (The) 1,600 3/95 85.00 2,352 200 Empresas ICA Sociedad Controladora SA de C.V. 12,000 1/95 35 00 27,389 750 General Dynamics Corp. 1,800 2/95 45.00 4,333 2,250 General Dynamics Corp. 1,800 5/95 50.00 3,134 1,913 Genzyme Corp. 5,200 1/95 40.00 7,503 325 Hewlett-Packard Co. 2,000 5/95 5.00 12,440 10,000 Hewlett-Packard Co. 2,000 5/95 95.00 15,689 22,750 IMC Global, Inc. 3,800 4/95 45.00 11,286 10,450 Inland Steel Industries, Inc. 4,000 3/95 45.00 5,880 750 International Game Technology 3,800 1/95 25.00 7,248 238 Legent Corp. 10,000 1/95 25.00 35,949 43,750 Legent Corp. 6,000 1/95 30.00 10,695 5,250 Legent Corp. 7,000 7/95 35.00 32,164 14,875 Lilly (Eli) & Co. 4,000 4/95 60.00 17,379 31,000 Lotus Development Corp. 2,600 1/95 50.00 9,347 813 Lotus Development Corp. 4,000 1/95 50.00 12,880 250 Lotus Development Corp. 3,500 4/95 50.00 15,644 6,125 Mattel, Inc. 7,600 1/95 30.00 13,547 950 McDonnell Douglas Corp. 1,000 5/95 40.00 10,470 11,375 MGM Grand, Inc. 5,400 3/95 35.00 9,625 1,013 Microsoft Corp. 100 4/95 65.00 2,964 2,850 Mylan Laboratories, Inc. 9,600 4/95 30.00 17,711 12,600 Pyxis Corp. 6,800 4/95 30.00 24,445 6,375 Sun Microsystems, Inc. 6,600 1/95 30.00 10,114 38,775 Sun Microsystems, Inc. 6,600 4/95 35.00 11,352 23,100 Sun Microsystems, Inc. 3,800 7/95 40.00 7,248 9,025 Tandem Computers, Inc. 11,800 4/95 17.50 14,396 17,700 U.S. Healthcare, Inc. 5,000 1/95 45.00 14,537 1,250 U.S. Healthcare, Inc. 5,000 4/95 50.00 19,224 4,375 Waban, Inc. 11,000 3/95 20.00 17,544 2,063 -------- --------- $607,682 $ 481,381 -------- --------- -------- ---------
See accompanying Notes to Financial Statements.
- ---------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 11.3% - ---------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $33,822,533 on 1/3/95, collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $32,143,410 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $2,361,271 (Cost $33,800,000) $ 33,800,000 $ 33,800,000 - ---------------------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 0.1% - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.1% - ---------------------------------------------------------------------------------------------------------------------------------- Mediobanca, 4.25% Debs., 1/1/00 (Cost $306,880) ITL 497,120,000 229,216 - ---------------------------------------------------------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 1.2% - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 0.1% - ---------------------------------------------------------------------------------------------------------------------------------- METALS - 0.1% ------------------------------------------------------------------------------------------------------------------------ Jindal Strips Ltd., 4.25% Cv. Debs., 3/31/99 300,000 309,000 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 0.5% - ---------------------------------------------------------------------------------------------------------------------------------- FOOD - 0.5% ------------------------------------------------------------------------------------------------------------------------ Global Mark International Ltd., 3.50% Cv. Debs., 2/9/95 (4) 1,500,000 1,533,750 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.5% - ---------------------------------------------------------------------------------------------------------------------------------- Industrial Credit and Investment Corp. India Ltd., 2.50% Cv. Debs., 4/30/00 (3) 1,375,000 1,026,094 ------------------------------------------------------------------------------------------------------------------------ Scici Ltd., 3.50% Cv. Bonds, 4/1/04 (3) 660,000 583,275 ------------ 1,609,369 ------------ Total Convertible Corporate Bonds and Notes (Cost $4,177,000) 3,452,119 SHARES - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 85.6% - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 12.5% - ---------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.0% ------------------------------------------------------------------------------------------------------------------------ PT Tri Polyta Indonesia, ADR (2) 30,000 727,500 ------------------------------------------------------------------------------------------------------------------------ Reliance Industries Ltd., GDS (2)(3) 75,000 1,485,000 ------------------------------------------------------------------------------------------------------------------------ Tianjin Bohai Chemical Industry Co. (2) 7,000,000 841,407 ------------ 3,053,907 - ---------------------------------------------------------------------------------------------------------------------------------- CHEMICALS: SPECIALTY - 0.8% ------------------------------------------------------------------------------------------------------------------------ Indo Gulf Fertilizer, GDR (2)(3) 147,000 439,324 ------------------------------------------------------------------------------------------------------------------------ Minerals Technologies, Inc. 40,000 1,170,000 ------------------------------------------------------------------------------------------------------------------------ PT Argha Karya Prima Industry 700,000 732,484 ------------ 2,341,808 - ---------------------------------------------------------------------------------------------------------------------------------- METAL: MISCELLANEOUS - 2.1% ------------------------------------------------------------------------------------------------------------------------ Asturiana de Zinc SA (2) 64,000 695,282 ------------------------------------------------------------------------------------------------------------------------ Capex SA-GDR (2)(3) 124,000 2,030,500 ------------------------------------------------------------------------------------------------------------------------ Plettac AG 2,778 1,317,296 ------------------------------------------------------------------------------------------------------------------------ Swissreal Schweiz Liegenscha 2,800 2,139,592 ------------ 6,182,670 - ---------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 5.4% ------------------------------------------------------------------------------------------------------------------------ Attisholz Holding AG 5,000 3,018,352 ------------------------------------------------------------------------------------------------------------------------ Corticeira Amorim SA 129,700 2,159,765 ------------------------------------------------------------------------------------------------------------------------ Forsheda B Free (5) 100,000 2,185,883 ------------------------------------------------------------------------------------------------------------------------ Hansol Paper 29,687 1,600,124
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------ Indah Kiat Pulp & Paper Corp. 240,000 $ 272,975 ------------------------------------------------------------------------------------------------------------------------ Mo och Domsjo AB Free, Series B (2) 50,000 2,327,124 ------------------------------------------------------------------------------------------------------------------------ PT Pabrik Kertas Tjiwi Kimia 1,000,000 1,865,332 ------------------------------------------------------------------------------------------------------------------------ Rottneros Bruks AB Free (2) 2,000,000 2,515,446 ------------ 15,945,001 - ---------------------------------------------------------------------------------------------------------------------------------- STEEL - 3.2% ------------------------------------------------------------------------------------------------------------------------ Dofasco, Inc. 160,000 2,153,014 ------------------------------------------------------------------------------------------------------------------------ Korea Iron & Steel Works (2) 67,761 1,787,481 ------------------------------------------------------------------------------------------------------------------------ Pohang Iron & Steel Co. Ltd. 5,000 505,945 ------------------------------------------------------------------------------------------------------------------------ Pohang Iron & Steel Co. Ltd., ADR 20,000 585,000 ------------------------------------------------------------------------------------------------------------------------ Sahaviriya Steel Industries PLC (2) 233,000 593,985 ------------------------------------------------------------------------------------------------------------------------ Tung Ho Steel Enterprise Corp., GDR (2)(3) 70,000 1,085,000 ------------------------------------------------------------------------------------------------------------------------ Ugine SA 41,600 2,923,108 ------------ 9,633,533 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 12.0% - ---------------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET - 0.9% ------------------------------------------------------------------------------------------------------------------------ Epeda-Bertrand Faure SA 14,199 2,413,156 ------------------------------------------------------------------------------------------------------------------------ Epeda-Bertrand Faure SA, Units (2) 2,028 344,664 ------------ 2,757,820 - ---------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 3.9% ------------------------------------------------------------------------------------------------------------------------ CIADEA SA (2) 201,620 1,764,066 ------------------------------------------------------------------------------------------------------------------------ Consorcio Grupo Dina SA, Sponsored ADR (2) 45,000 427,500 ------------------------------------------------------------------------------------------------------------------------ Consorcio Grupo Dina SA, Sponsored ADR, Series L (2) 7,100 53,250 ------------------------------------------------------------------------------------------------------------------------ Fiat SpA di Risp. 1,068,000 2,373,333 ------------------------------------------------------------------------------------------------------------------------ Mahindra & Mahindra Ltd., GDR 120,000 1,338,900 ------------------------------------------------------------------------------------------------------------------------ Mayne Nickless Ltd. 200,000 1,023,867 ------------------------------------------------------------------------------------------------------------------------ Nissan Motor Co. (2) 250,000 2,062,243 ------------------------------------------------------------------------------------------------------------------------ Volvo AB, Series B Free 142,500 2,683,591 ------------ 11,726,750 - ---------------------------------------------------------------------------------------------------------------------------------- BROADCAST MEDIA - 0.7% ------------------------------------------------------------------------------------------------------------------------ United International Holdings, Inc., Cl. A (2) 112,000 1,960,000 - ---------------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT - 1.3% ------------------------------------------------------------------------------------------------------------------------ Euro Disney SCA 480,000 1,002,851 ------------------------------------------------------------------------------------------------------------------------ Filmes Lusomundo SA (2) 205,200 2,861,456 ------------ 3,864,307 - ---------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS AND APPLIANCES - 1.5% ------------------------------------------------------------------------------------------------------------------------ Philips Electronics NV 150,000 4,442,997 - ---------------------------------------------------------------------------------------------------------------------------------- PUBLISHING - 0.4% ------------------------------------------------------------------------------------------------------------------------ Roto Smeets de Boer 60,000 1,310,425 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 1.0% ------------------------------------------------------------------------------------------------------------------------ Sonae Industria E. Investimentos (2) 125,000 2,874,528 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL MERCHANDISE CHAINS - 0.3% ------------------------------------------------------------------------------------------------------------------------ PT Matahari Putra Prima 400,000 746,133 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 1.8% ------------------------------------------------------------------------------------------------------------------------ Dickson Concepts International Ltd. 1,984,500 1,295,292 ------------------------------------------------------------------------------------------------------------------------ Vereinigte Baubeschlag 14,000 3,965,120 ------------ 5,260,412 - ---------------------------------------------------------------------------------------------------------------------------------- TEXTILES: APPAREL MANUFACTURERS - 0.2% ------------------------------------------------------------------------------------------------------------------------ Indian Rayon and Industries Ltd., GDR (2)(3) 30,000 583,380
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 7.1% - ---------------------------------------------------------------------------------------------------------------------------------- BEVERAGES: ALCOHOLIC - 1.9% ------------------------------------------------------------------------------------------------------------------------ Jinro Ltd. 19,000 $ 554,217 ------------------------------------------------------------------------------------------------------------------------ LVMH Moet Hennessy Louis Vuitton 15,000 2,369,404 ------------------------------------------------------------------------------------------------------------------------ Vina Concha y Toro SA, ADR 148,600 2,451,900 ------------ 5,375,521 - ---------------------------------------------------------------------------------------------------------------------------------- DRUGS - 1.2% ------------------------------------------------------------------------------------------------------------------------ Astra AB Free, Series A 50,000 1,291,352 ------------------------------------------------------------------------------------------------------------------------ Pharmavit GDS (2)(5) 100,000 1,125,000 ------------------------------------------------------------------------------------------------------------------------ WPP Group PLC 630,000 1,079,270 ------------ 3,495,622 - ---------------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING - 0.8% ------------------------------------------------------------------------------------------------------------------------ Grupo Herdez SA 400,000 190,050 ------------------------------------------------------------------------------------------------------------------------ Grupo Herdez SA, Series A 300,000 146,192 ------------------------------------------------------------------------------------------------------------------------ Mavesa, ADR (3) 105,000 519,225 ------------------------------------------------------------------------------------------------------------------------ Molinos Rio de la Plata SA (2) 301,343 1,673,853 ------------ 2,529,320 - ---------------------------------------------------------------------------------------------------------------------------------- FOOD WHOLESALERS - 0.3% ------------------------------------------------------------------------------------------------------------------------ Prodega AG 920 1,012,332 - ---------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: MISCELLANEOUS - 1.4% ------------------------------------------------------------------------------------------------------------------------ Genzyme Corp. (2) 60,000 1,890,000 ------------------------------------------------------------------------------------------------------------------------ Genzyme Corp. Tissue Repair (2) 8,100 30,375 ------------------------------------------------------------------------------------------------------------------------ Plant Genetics Systems International NV (2) 9,104 68,714 ------------------------------------------------------------------------------------------------------------------------ Takare PLC 650,000 2,237,234 ------------ 4,226,323 - ---------------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 1.0% ------------------------------------------------------------------------------------------------------------------------ Elekta Instrument AB Free, Series B (2) 135,000 2,905,542 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: FOOD CHAINS - 0.5% ------------------------------------------------------------------------------------------------------------------------ Carulla SA (2)(3) 107,000 1,235,208 ------------------------------------------------------------------------------------------------------------------------ President Enterprises Corp. (2)(3) 7,414 150,134 ------------ 1,385,342 - ---------------------------------------------------------------------------------------------------------------------------------- ENERGY - 7.9% - ---------------------------------------------------------------------------------------------------------------------------------- OIL AND GAS DRILLING - 2.4% ------------------------------------------------------------------------------------------------------------------------ Naviera Perez Companc SA, CIA Cl. B 250,000 1,029,934 ------------------------------------------------------------------------------------------------------------------------ Petroleum Geo-Services AS (2) 172,000 3,127,729 ------------------------------------------------------------------------------------------------------------------------ Transocean Drilling AS (2) 354,960 2,938,752 ------------ 7,096,415 - ---------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND EQUIPMENT - 1.7% ------------------------------------------------------------------------------------------------------------------------ Baker Hughes, Inc. 150,000 2,737,500 ------------------------------------------------------------------------------------------------------------------------ Coflexip SA, Sponsored ADR 102,440 2,381,730 ------------ 5,119,230 - ---------------------------------------------------------------------------------------------------------------------------------- OIL: EXPLORATION AND PRODUCTION - 0.4% ------------------------------------------------------------------------------------------------------------------------ ASTRA Compania Argentina de Petroleo SA 750,000 1,237,421 - ---------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED INTERNATIONAL - 3.4% ------------------------------------------------------------------------------------------------------------------------ Elf Gabon SA 11,000 2,133,307 ------------------------------------------------------------------------------------------------------------------------ OeMV AG (2) 50,500 4,277,970 ------------------------------------------------------------------------------------------------------------------------ YPF Sociedad Anonima, Sponsored ADR 47,300 1,011,038 ------------------------------------------------------------------------------------------------------------------------ YuKong Ltd. 11,605 538,672 ------------------------------------------------------------------------------------------------------------------------ YuKong Ltd., GDR (2)(3) 100,000 1,500,000 ------------------------------------------------------------------------------------------------------------------------ Yukong Ltd., New 16,340 758,458 ------------ 10,219,445
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 11.3% - ---------------------------------------------------------------------------------------------------------------------------------- BANKS - 0.9% ------------------------------------------------------------------------------------------------------------------------ Banco Portugues de Investimento 113,000 $ 1,686,482 ------------------------------------------------------------------------------------------------------------------------ Banco Wiese, Sponsored ADR (2) 59,700 1,119,375 ------------ 2,805,857 - ---------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCE - 0.4% ------------------------------------------------------------------------------------------------------------------------ Petersburg Long Distance, Inc. 187,000 1,192,125 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: MISCELLANEOUS - 2.9% ------------------------------------------------------------------------------------------------------------------------ First NIS Regional Fund (3)(6) 180,000 765,000 ------------------------------------------------------------------------------------------------------------------------ Industrial Finance Corp. 720,000 1,534,355 ------------------------------------------------------------------------------------------------------------------------ Marschollek, Lautenschlaeger und Partner AG 9,587 5,133,631 ------------------------------------------------------------------------------------------------------------------------ Sturge Holdings PLC 680,000 691,509 ------------------------------------------------------------------------------------------------------------------------ Taipei Fund, Cl. B, IDR (2)(3) 6 575,400 ------------ 8,699,895 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE - 2.1% ------------------------------------------------------------------------------------------------------------------------ National Mutual Asia Ltd. (2) 2,700,000 1,779,750 ------------------------------------------------------------------------------------------------------------------------ Swiss Reinsurance 7,500 4,521,797 ------------ 6,301,547 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND CASUALTY - 1.8% ------------------------------------------------------------------------------------------------------------------------ Reinsurance Australia Corp. (2) 3,300,000 5,375,302 - ---------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: OTHER - 3.2% ------------------------------------------------------------------------------------------------------------------------ Akbank T.A.S. 6,448,440 1,749,574 ------------------------------------------------------------------------------------------------------------------------ Banco de Galicia, Series B 152,375 609,461 ------------------------------------------------------------------------------------------------------------------------ Banco Frances del Rio Plata 109,326 778,948 ------------------------------------------------------------------------------------------------------------------------ Grupo Financiero Banamex Accival SA, Cl. C 160,000 464,566 ------------------------------------------------------------------------------------------------------------------------ Korea First Bank 98,857 1,379,108 ------------------------------------------------------------------------------------------------------------------------ Kwangju Bank (2) 100,000 1,318,960 ------------------------------------------------------------------------------------------------------------------------ PT Panin Bank (3) 1,200,000 1,665,150 ------------------------------------------------------------------------------------------------------------------------ Standard Chartered Bank PLC 43 189 ------------------------------------------------------------------------------------------------------------------------ Turkiye Garanti Bankasi AS, Sponsored ADR (3) 660,000 1,671,252 ------------ 9,637,208 - ---------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 23.1% - ---------------------------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS GROUP - 1.0% ------------------------------------------------------------------------------------------------------------------------ Ceramicas Carabobo CA, Series B 25,000 88,832 ------------------------------------------------------------------------------------------------------------------------ Ceramicas Carabobo CA, Sponsored ADR, Cl. B 120,000 139,164 ------------------------------------------------------------------------------------------------------------------------ Cimentos de Portugal SA 80,000 1,412,060 ------------------------------------------------------------------------------------------------------------------------ Internacional de Ceramica SA, Series B, ADR (2)(3) 10,000 177,664 ------------------------------------------------------------------------------------------------------------------------ Sung Shin Cement (2) 28,000 1,278,377 ------------ 3,096,097 - ---------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES - 1.8% ------------------------------------------------------------------------------------------------------------------------ BIS SA (2) 28,425 1,720,376 ------------------------------------------------------------------------------------------------------------------------ Eurotunnel SA, ESA-Unites (2) 234,090 1,050,531 ------------------------------------------------------------------------------------------------------------------------ Measurex Corp. 110,000 2,598,750 ------------ 5,369,657 - ---------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 4.5% ------------------------------------------------------------------------------------------------------------------------ Catena AB Free, Series A (2) 425,000 3,630,247 ------------------------------------------------------------------------------------------------------------------------ Commercial del Plata 75,400 192,258 ------------------------------------------------------------------------------------------------------------------------ Internatio-Muller NV 50,000 2,650,816 ------------------------------------------------------------------------------------------------------------------------ Jardine Matheson Holdings Ltd. 197,551 1,410,706 ------------------------------------------------------------------------------------------------------------------------ JK Corp. Ltd., GDR (2)(3) 562,000 3,779,450 ------------------------------------------------------------------------------------------------------------------------ Kinnevik Investments AB Free, Series B 52,000 1,720,727 ------------ 13,384,204
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------------- CONTAINERS: METAL AND GLASS - 0.3% ------------------------------------------------------------------------------------------------------------------------ M C Packaging Corp Ltd. 2,662,000 $ 1,032,178 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.4% ------------------------------------------------------------------------------------------------------------------------ PT Kabelmetal Indonesia 800,000 1,091,902 - ---------------------------------------------------------------------------------------------------------------------------------- ENGINEERING AND CONSTRUCTION - 4.2% ------------------------------------------------------------------------------------------------------------------------ Babcock International Group PLC (2) 5,400,000 2,513,369 ------------------------------------------------------------------------------------------------------------------------ Cristaleria Espanola SA 40,000 2,130,213 ------------------------------------------------------------------------------------------------------------------------ SNC Lavalin Group 219,800 3,564,913 ------------------------------------------------------------------------------------------------------------------------ Trafalgar House PLC 1,500,000 1,783,530 ------------------------------------------------------------------------------------------------------------------------ VA Technologie AG (2)(3) 25,000 2,516,615 ------------ 12,508,640 - ---------------------------------------------------------------------------------------------------------------------------------- MACHINERY: DIVERSIFIED - 3.4% ------------------------------------------------------------------------------------------------------------------------ Buderus AG 4,500 1,929,174 ------------------------------------------------------------------------------------------------------------------------ Maschinenfabrik Berthold Hermle AG 5,101 543,004 ------------------------------------------------------------------------------------------------------------------------ Powerscreen International PLC 580,000 2,150,561 ------------------------------------------------------------------------------------------------------------------------ Tampella AB (2) 838,333 2,476,333 ------------------------------------------------------------------------------------------------------------------------ Traub AG (2) 22,000 2,980,614 ------------ 10,079,686 - ---------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING: DIVERSIFIED INDUSTRIALS - 3.3% ------------------------------------------------------------------------------------------------------------------------ Autoliv AB (2) 125,000 4,808,942 ------------------------------------------------------------------------------------------------------------------------ Bollore Technologies SA (2) 10,000 828,776 ------------------------------------------------------------------------------------------------------------------------ Hindustan Development Corp. Ltd., Units (2)(3) 370,000 786,250 ------------------------------------------------------------------------------------------------------------------------ Valmet Corp., Cl. A (2) 150,000 2,851,547 ------------------------------------------------------------------------------------------------------------------------ Vitro Sociedad Anonima, ADR 30,000 420,000 ------------ 9,695,515 - ---------------------------------------------------------------------------------------------------------------------------------- POLLUTION CONTROL - 0.8% ------------------------------------------------------------------------------------------------------------------------ Elco Looser Holdings Inhaber 6,000 2,292,420 - ---------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION: MISCELLANEOUS - 2.8% ------------------------------------------------------------------------------------------------------------------------ Kvaerner Industrier AS, Series A Free 3,900 182,200 ------------------------------------------------------------------------------------------------------------------------ Kvaerner Industrier AS, Series B 21,232 960,523 ------------------------------------------------------------------------------------------------------------------------ Lisnave-Estaleiros Navais de Lisbona SA (2) 501,250 2,455,872 ------------------------------------------------------------------------------------------------------------------------ Malaysian International Shipping Corp. 400,333 1,144,467 ------------------------------------------------------------------------------------------------------------------------ Singmarine Industries Ltd. 437,500 1,104,272 ------------------------------------------------------------------------------------------------------------------------ Unitor Ships Service AS 33,100 557,864 ------------------------------------------------------------------------------------------------------------------------ Vard AS (2) 356,000 784,209 ------------------------------------------------------------------------------------------------------------------------ Westmont Berhad Ord. 200,000 1,245,334 ------------ 8,434,741 - ---------------------------------------------------------------------------------------------------------------------------------- TRUCKERS - 0.6% ------------------------------------------------------------------------------------------------------------------------ Koninklijke Frans Maas Groep NV 61,300 1,907,550 - ---------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 8.5% - ---------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.5% ------------------------------------------------------------------------------------------------------------------------ Celsius Industrier AB, Cl. B 64,900 1,440,463 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS - 0.4% ------------------------------------------------------------------------------------------------------------------------ Cray Electronics Holdings 500,000 1,263,333 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: SEMICONDUCTORS - 2.2% ------------------------------------------------------------------------------------------------------------------------ Austria Mikro Systeme International AG 70,000 5,275,264 ------------------------------------------------------------------------------------------------------------------------ Samsung Electronics Co., GDR (2)(3) 745 34,643 ------------------------------------------------------------------------------------------------------------------------ Samsung Electronics Co., Sponsored GDS (2) 25,000 1,162,500 ------------ 6,472,407 - ---------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 5.4% ------------------------------------------------------------------------------------------------------------------------ Airtouch Communications, Inc. (2) 85,000 2,475,625
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund MARKET VALUE COMMON STOCKS (CONTINUED) SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------ Comcast UK Cable Partners Ltd. (2) 49,000 $ 784,000 ------------------------------------------------------------------------------------------------------------------------ Millicom International Cellular SA (2) 121,678 3,665,550 ------------------------------------------------------------------------------------------------------------------------ Netas Telekomunik 2,970,000 940,115 ------------------------------------------------------------------------------------------------------------------------ Pakistan Telecommunications, GDR (2)(3) 10,000 1,355,000 ------------------------------------------------------------------------------------------------------------------------ PT Indosat, ADR (2) 28,000 1,001,000 ------------------------------------------------------------------------------------------------------------------------ Shinawatra Computer & Communication PLC 50,000 1,091,415 ------------------------------------------------------------------------------------------------------------------------ Technology Resources Industries 500,000 1,595,829 ------------------------------------------------------------------------------------------------------------------------ USHA Beltron Ltd. (2) 160,000 1,500,000 ------------------------------------------------------------------------------------------------------------------------ Vodafone Group 500,000 1,658,370 ------------ 16,066,904 - ---------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 3.2% - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRIC COMPANIES - 1.9% ------------------------------------------------------------------------------------------------------------------------ Calcutta Electric Supply (2) 15,000 570,000 ------------------------------------------------------------------------------------------------------------------------ Central Puerto SA, ADR (3) 20,000 494,968 ------------------------------------------------------------------------------------------------------------------------ Korea Electric Power Co. 25,000 862,397 ------------------------------------------------------------------------------------------------------------------------ Tata Electric Cos. (2)(3) 500 218,750 ------------------------------------------------------------------------------------------------------------------------ Veba AG 10,000 3,463,190 ------------ 5,609,305 - ---------------------------------------------------------------------------------------------------------------------------------- TELEPHONE - 1.3% ------------------------------------------------------------------------------------------------------------------------ Telecom Italia SpA 900,000 2,341,191 ------------------------------------------------------------------------------------------------------------------------ Telecommunication de Argentina, Cl. B 300,000 1,469,900 ------------------------------------------------------------------------------------------------------------------------ Telefonos de Mexico SA, Sponsored ADR 3,000 123,000 ------------ 3,934,091 ------------ Total Common Stocks (Cost $261,335,260) 254,977,211 - ---------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.7% ------------------------------------------------------------------------------------------------------------------------ Moebel Walther AG (2) 3,500 1,585,145 ------------------------------------------------------------------------------------------------------------------------ Rhoen Klinikum AG 660 400,254 ------------------------------------------------------------------------------------------------------------------------ Telecom Brasileiras SA 600,000 26,848 ------------ Total Preferred Stocks (Cost $1,857,274) 2,012,247 UNITS - ---------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.1% ------------------------------------------------------------------------------------------------------------------------ Ciba-Geigy AG Wts., Exp. 6/95 100 309 ------------------------------------------------------------------------------------------------------------------------ Eurotunnel SA Wts., Exp. 10/95 30,000 3,373 ------------------------------------------------------------------------------------------------------------------------ Rottneros Bruks AB Rts., Exp. 1/95 2,000,000 322,838 ------------ Total Rights, Warrants and Certificates (Cost $0) 326,520 FACE AMOUNT - ---------------------------------------------------------------------------------------------------------------------------------- CERTIFICATE OF DEPOSIT - 0.7% - ---------------------------------------------------------------------------------------------------------------------------------- Cayman Time Deposit, 5.125%, 2/27/95 (Cost $2,300,000) 2,300,000 2,300,000 ------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $303,776,414) 99.7% 297,097,313 ------------------------------------------------------------------------------------------------------------------------ OTHER ASSETS NET OF LIABILITIES 0.3 744,608 --------- ------------ NET ASSETS 100.0% $297,841,921 --------- ------------ --------- ------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund - -------------------------------------------------------------------------------- 1. Face amount is reported in local currency. Foreign currency abbreviation is as follows: ITL - Italian Lira 2. Non-income producing security. 3. Restricted security - See Note 7 of Notes to Financial Statements. 4. Represents the current interest rate for an increasing rate security. 5. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer and is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended December 31, 1994. The aggregate fair value of all securities of affiliated companies as December 31, amounted to $3,310,883. Transactions during the period in which the issuer was an affiliate are as follows:
Balance Balance December 31, 1993 Gross Additions Gross Reductions December 31, 1994 ----------------- ------------------ ---------------- ----------------- Dividend Shares Cost Shares Cost Shares Cost Shares Cost Income - ------------------------------------------------------------------------------------------------------------------------------------ Forsheda B Free - $ - 100,000 $1,200,236 - $ - 100,000 $1,200,236 $10,808 Pharmavit GDS - - 100,000 1,300,000 - - 100,000 1,300,000 - ---- ---------- ---- ---------- ------- - $ - $2,500,236 - $ - $2,500,236 $10,808 ---- ---------- ---- ---------- ------- ---- ---------- ---- ---------- -------
6. First NIS Regional Fund, a closed end fund listed on the Luxembourg Stock Exchange, is offered in installments. The Fund entered into the first installment (40% of the total commitment) on November 29, 1994. The second and third installments (30% each of the total commitment) are provisional and may be postponed indefinitely at the discretion of the Board of NIS Fund. See accompanying Notes to Financial Statements.
- ----------------------------------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 16.7% - ----------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6%, dated 12/30/94, to be repurchased at $3,402,267 on 1/3/95, 1/3/95 collateralized by U.S. Treasury Nts., 3.875%-8.875%, 5/31/95-8/31/05, with a value of $3,233,361 and U.S. Treasury Bonds, 10.75%-14.25%, 2/15/02-8/15/05, with a value of $237,524 (Cost $3,400,000) $ 3,400,000 $ 3,400,000 - ----------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 6.2% - ----------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY - 5.2% - ----------------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 1.6% ------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Series 176, Cl. F, 8.95%, 3/15/20 58,000 58,436 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 10.50%, 11-25-20 130,000 143,450 ------------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Series 1994-83, Cl. Z, 7.50%, 6/25/24 166,094 124,890 ---------------- 326,776 - ----------------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED - 3.6% ------------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 7%, 1/1/95 750,000 737,109 - ----------------------------------------------------------------------------------------------------------------------------------- PRIVATE - 1.0% - ----------------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 1.0% ------------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 249,105 199,129 ---------------- Total Mortgage-Backed Obligations (Cost $1,263,157) 1,263,014 - ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 13.6% - ----------------------------------------------------------------------------------------------------------------------------------- TREASURY - 13.6% - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds, 7.875%, 2/15/21 470,000 463,831 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 4.25%, 5/15/96 (10)(11) 2,289,000 2,194,579 ------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 5.125%, 4/30/98 120,000 110,662 ---------------- Total U.S. Government Obligations (Cost $2,959,676) 2,769,072 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 22.2% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas, Series 1, 5.625%, 4/1/01 (4)(6) 639,964 409,944 ------------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Interest Due and Unpaid Bonds, 6.063%, 1/1/01 (4) 98,000 81,861 ------------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Nts., Banco Estado Minas Gerais, 10%, 1/15/96 240,000 231,000 ------------------------------------------------------------------------------------------------------------------------- Ecuador (Republic of) Bonds, 0%, 12/29/49 (5)(9) 250,000 135,938 ------------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 NZD 325,000 222,608 ------------------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 5.938%, 1/1/09 (4) 300,000 199,125 ------------------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche B, 5.938%, 1/1/04 (4) 50,000 35,453 ------------------------------------------------------------------------------------------------------------------------- New South Wales State Bank Bonds, 9.25%, 2/18/03 AUD 100,000 72,863
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- New South Wales Treasury Corp. Gtd. Bonds, 12%, 12/1/01 AUD $ 148,000 $ 123,766 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 10%, 7/15/97 NZD 155,000 100,687 ------------------------------------------------------------------------------------------------------------------------- New Zealand (Republic of) Bonds, 8%, 11/15/95 NZD 400,000 252,869 ------------------------------------------------------------------------------------------------------------------------- Petroquimica do Nordeste Sr. Unsec. Unsub. Nts., 9.50%, 10/19/01 50,000 43,938 ------------------------------------------------------------------------------------------------------------------------- Poland (Republic of) Disc. Bonds, 6.813%, 10/27/24 500,000 361,250 ------------------------------------------------------------------------------------------------------------------------- Queensland Treasury Corp. Gtd. Nts., 8%, 8/14/01 AUD 270,000 186,275 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 10.25%, 11/30/98 ESP 26,000,000 188,931 ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%, 3/25/00 ESP 22,000,000 169,517 ------------------------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Nts., 12.50%, 7/15/00 AUD 190,000 160,086 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 12%, 11/20/98 GBP 185,000 320,004 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 12.25%, 3/26/99 GBP 30,000 52,597 ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts. (Gilt), 13%, 7/14/00 GBP 92,000 169,887 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Treasury Bills, 0%, 1/19/95 MXP 176,940 35,378 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Treasury Bills, 0%, 4/6/95 MXP 363,930 69,047 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Treasury Bills, 0%, 5/4/95 MXP 184,250 34,798 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Combined Facility 3 Loan Participation Agreement, 7.625%, 3/20/00 (4)(5) 200,000 172,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Myra Old Money Loan Participation Agreements, 7.625%, 3/20/05 (4)(5) 200,000 139,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Petacalco Topolobampo Trust Sr. Sec. Unsub. Nts., 8.125%, 12/15/03 300,000 222,000 ------------------------------------------------------------------------------------------------------------------------- United Mexican States Petroleos Mexicanos Gtd. Medium-Term Nts., 7.60%, 6/15/00 100,000 84,720 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., 6.75%, 9/20/95 200,000 192,000 ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., 9%, 5/27/96 50,000 47,124 ---------------- Total Foreign Government Obligations (Cost $4,778,402) 4,514,666 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 34.2% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 3.7% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.3% ------------------------------------------------------------------------------------------------------------------------- Borg-Warner Security Corp., 9.125% Sr. Sub. Nts., 5/1/03 100,000 85,250 ------------------------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 200,000 177,000 ---------------- 262,250 - ----------------------------------------------------------------------------------------------------------------------------------- METALS - 0.5% ------------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 100,000 100,000 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS - 1.9% ------------------------------------------------------------------------------------------------------------------------- PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 75,000 61,500 ------------------------------------------------------------------------------------------------------------------------- Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02 100,000 89,750 ------------------------------------------------------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., 12/15/04 (5) 50,000 51,500 ------------------------------------------------------------------------------------------------------------------------- Stone Container Corp., 10.75% Fst. Mtg. Nts., 10/1/02 190,000 190,000 ---------------- 392,750 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 10.5% - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES - 0.9% ------------------------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 200,000 183,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT - 1.7% ------------------------------------------------------------------------------------------------------------------------- Atlantis Group, Inc., 11% Sr. Nts., 2/15/03 130,000 129,350
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- CONSTRUCTION SUPPLIES AND DEVELOPMENT (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., 12/1/11 Series 1993-A, 12/1/11 (5) $ 250,000 $ 216,250 ---------------- 345,600 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER GOODS AND SERVICES - 3.3% ------------------------------------------------------------------------------------------------------------------------- Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 200,000 199,000 ------------------------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98 50,000 34,000 ------------------------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 150,000 162,750 ------------------------------------------------------------------------------------------------------------------------- MacAndrews & Forbes Holdings, Inc., 13% Sub. Debs., 3/1/99 175,000 174,125 ------------------------------------------------------------------------------------------------------------------------- PT Polysindo Eka Perkasa, 0% Promissory Nts., 10/23/96 IDR 300,000,000 97,589 ---------------- 667,464 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA - 3.3% ------------------------------------------------------------------------------------------------------------------------- Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/0 200,000 191,000 ------------------------------------------------------------------------------------------------------------------------- Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts., 7/15/04 (3) 100,000 54,000 ------------------------------------------------------------------------------------------------------------------------- Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 150,000 143,813 ------------------------------------------------------------------------------------------------------------------------- New City Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 200,000 196,000 ------------------------------------------------------------------------------------------------------------------------- Sinclair Broadcasting Group, Inc., 10% Sr. Sub. Nts., 12/15/03 100,000 94,000 ---------------- 678,813 - ----------------------------------------------------------------------------------------------------------------------------------- REAL ESTATE DEVELOPMENT - 0.4% ------------------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 100,000 84,000 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL - 0.9% ------------------------------------------------------------------------------------------------------------------------- International Semi-Tech Microelectronics, Inc., 0%/11.50% (3) Sr. Sec. Disc. Nts., 8/15/03 400,000 172,000 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 4.2% - ----------------------------------------------------------------------------------------------------------------------------------- FOOD AND DRUG DISTRIBUTION - 2.1% ------------------------------------------------------------------------------------------------------------------------- AmeriSource Corp., 11.25% Sr. Debs., 7/15/05 (6) 165,831 157,539 ------------------------------------------------------------------------------------------------------------------------- Di Giorgio Corp., 12% Sr. Nts., 2/15/03 150,000 141,000 ------------------------------------------------------------------------------------------------------------------------- Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 200,000 79,000 ------------------------------------------------------------------------------------------------------------------------- Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 50,000 41,750 ---------------- 419,289 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 2.1% ------------------------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., Units (5) 200,000 197,000 ------------------------------------------------------------------------------------------------------------------------- Total Renal Care, Inc., Units 300,000 226,500 ---------------- 423,500 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 3.1% - ----------------------------------------------------------------------------------------------------------------------------------- Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 300,000 313,500 ------------------------------------------------------------------------------------------------------------------------- Citibank, 10.50% CD, 7/14/95 (7)ARA 100,000 99,994 ------------------------------------------------------------------------------------------------------------------------- Citibank, 16% CD, 3/17/95 (7)CLP 20,711,846 51,644 ------------------------------------------------------------------------------------------------------------------------- Citibank, 16% CD, 5/3/95 (7)CLP 64,500,000 160,828 ---------------- 625,966 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 0.4% - ----------------------------------------------------------------------------------------------------------------------------------- GENERAL INDUSTRIAL - 0.4% ------------------------------------------------------------------------------------------------------------------------- Terex Corp., 13% Sr. Nts., 8/1/96 (5) 90,000 85,275
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund FACE MARKET VALUE AMOUNT (1) SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES (CONTINUED) - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 9.4% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 1.6% ------------------------------------------------------------------------------------------------------------------------- GPA Holland BV, 8.625% Medium-Term Nts., Series C, 1/15/99 (5) $ 250,000 $ 178,750 ------------------------------------------------------------------------------------------------------------------------- Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05 (3) 300,000 151,500 ---------------- 330,250 - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 3.8% ------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/12.50% Sr. Disc. Nts., 6/15/04 (3) 200,000 90,000 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04 100,000 100,500 ------------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 9.875% Sr. Sub. Debs., 2/15/13 100,000 90,000 ------------------------------------------------------------------------------------------------------------------------- Continental Cablevision, Inc., 11% Sr. Sub. Debs., 6/1/07 300,000 306,000 ------------------------------------------------------------------------------------------------------------------------- Echostar Communications Corp., Units 80,000 41,800 ------------------------------------------------------------------------------------------------------------------------- Marcus Cable Operating Co. LP/Marcus Capital Corp., 0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04 (3) 100,000 53,000 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc., 9.125% Debs., 1/15/13 50,000 45,856 ------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc./Time Warner Entertainment LP, 8.375% Sr. Debs., 3/15/23 50,000 41,834 ---------------- 768,990 - ----------------------------------------------------------------------------------------------------------------------------------- COMMUNICATIONS - 2.9% ------------------------------------------------------------------------------------------------------------------------- Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04 (3) 200,000 105,000 ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (3)(5) 150,000 97,893 ------------------------------------------------------------------------------------------------------------------------- Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3) 50,000 32,750 ------------------------------------------------------------------------------------------------------------------------- MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3) 50,000 29,875 ------------------------------------------------------------------------------------------------------------------------- Mobile Telecommunications Technologies Corp., 13.50% Sr. Nts., 12/15/02 50,000 50,875 ------------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 9.75% Sr. Sec. Nts., 8/1/00 150,000 142,125 ------------------------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01 (5)(12) 200,000 133,000 ---------------- 591,518 - ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 1.1% ------------------------------------------------------------------------------------------------------------------------- Imax Corp., 7%/10% Sr. Nts., 3/1/01 (8) 200,000 167,000 ------------------------------------------------------------------------------------------------------------------------- Unisys Corp., 13.50% Credit Sensitive Nts., 7/1/97 50,000 54,250 ---------------- 221,250 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 2.9% - ----------------------------------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% 2nd Lease Obligation Bonds, 6/1/17 199,000 142,451 ------------------------------------------------------------------------------------------------------------------------- El Paso Funding Co., 10.75% Debs., 4/1/13 (2) 100,000 52,077 ------------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.30% Lease Obligation Bonds, Series 1986A, 1/15/14 200,000 183,467 ------------------------------------------------------------------------------------------------------------------------- Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08 (5) 250,000 216,250 ---------------- 594,245 ---------------- Total Corporate Bonds and Notes (Cost $7,408,174) 6,946,160
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 0.6% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 0.6% - ----------------------------------------------------------------------------------------------------------------------------------- HOTELS/MOTELS - 0.2% ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA (5) 24,390 $ 28,106 - ----------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT STORES - 0.4% ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. 4,498 86,587 ---------------- Total Common Stocks (Cost $113,924) 114,693 - ----------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 4.2% - ----------------------------------------------------------------------------------------------------------------------------------- AK Steel Holding Corp., 7% Cv. Stock Appreciation Income Linked Securities 5,000 156,250 ------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co., 9% Exchangeable Notes for Common Stock of Lyondell Petrochemical Co., 9/15/97 5,000 130,625 ------------------------------------------------------------------------------------------------------------------------- California Federal Bank, 10.625% Non-Cum., Series B 2,000 200,500 ------------------------------------------------------------------------------------------------------------------------- First Nationwide Bank, 11.50% Non-Cum. 2,000 196,000 ------------------------------------------------------------------------------------------------------------------------- Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E 1,000 27,875 ------------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum Corp., 8.255% Provisionally Redeemable Income Debt Exchangeable for Stock 3,200 34,000 ------------------------------------------------------------------------------------------------------------------------- Prime Retail, Inc., $19.00 Cv., Series B 6,000 114,000 ---------------- Total Preferred Stocks (Cost $916,622) 859,250 UNITS - ----------------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.2% - ----------------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 1,000 2,250 ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. C, Exp. 12/99 2,996 15,355 ------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. Wts., Cl. D, Exp. 12/01 2,996 16,853 ------------------------------------------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 7/96 (5) 36 27 ---------------- Total Rights, Warrants and Certificates (Cost $35,293) 34,485 FACE AMOUNT - ----------------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 3.1% - ----------------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00 (5) $286,956 $244,630 ------------------------------------------------------------------------------------------------------------------------- Bayerische Landesbank, N.Y. Branch, Italian Lira/Deutsche Mark Linked Confidence Nt., Girozentrale Branch, 10%, 8/7/95 (7) 90,000 76,455 ------------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 5.788% Standard & Poor's 500 Index-Linked Nts., 1/25/95 (5) 50,000 58,560 ------------------------------------------------------------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York (Singapore Branch), 12.15% CD, 2/3/95 (7) 100,000 91,592 ------------------------------------------------------------------------------------------------------------------------- Swiss Bank Corporation Investment Banking, Inc., 10% CD Sterling Rate Linked Nts., 7/3/95 (7) 160,000 154,880 ---------------- Total Structured Instruments (Cost $709,157) 626,117 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $21,584,405) 101.0% 20,527,457 - ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (1.0) (207,142) ------ ---------------- NET ASSETS 100.0% $ 20,320,315 ------ ---------------- ------ ----------------
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994 Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund - -------------------------------------------------------------------------------- 1. Face amount is reported in local currency. Foreign currency abbreviations are as follows: ARA - Argentine Austral GBP - Pound Sterling AUD - Australian Dollar IDR - Indonesian Rupiah CLP - Chilean Peso MXP - Mexican Peso ESP - Spanish Peseta NZD - New Zealand Dollar 2. Non-income producing security. 3. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future date. 4. Represents the current interest for a variable rate security. 5. Restricted security - See Note 7 of Notes to Financial Statements. 6. Interest or dividend is paid in kind. 7. Indexed instrument for which the principal amount due at maturity is affected by the relative value of a foreign currency. 8. Represents the current interest rate for an increasing rate security. 9. When-issued security to be delivered and settled after December 31, 1994. 10. Securities with an aggregate market value of $402,675 are held in escrow to cover initial margin requirements on open interest rate futures sales contracts. See Note 6 of Notes to Financial Statements. 11. Securities with an aggregate market value of $1,150,500 are held in escrow to cover outstanding call options, as follows:
SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED SEE NOTE 1 - ------------------------------------------------------------------------------------------------------- European OTC Australian Dollar/U.S. Dollar 307,425 3/6/95 79.00AUD $1,600 $1,548
12. Represents a bond that pays contingent supplemental interest until it converts to a fixed rate of interest at a designated future date. See accompanying Notes to Financial Statements. STATEMENTS OF ASSETS AND LIABILITIES December 31, 1994 Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL MONEY HIGH INCOME BOND APPRECIATION FUND FUND FUND FUND ---------------------------------------------------------- ASSETS: Investments, at value (cost * ) (including repurchase agreements**) - see accompanying statements $89,427,110 $94,228,680 $132,512,297 $182,918,438 Unrealized appreciation on futures contracts - Note 6 -- -- -- -- Cash 32,522 426,475 170,380 23,807 Receivables: Dividends and interest 221,806 1,814,941 2,314,374 142,370 Shares of beneficial interest sold 55,012 29,436 386,737 3,813,210 Investments sold 185,438 1,834,980 -- 2,987,756 Other 5,623 1,251 7,049 8,710 ---------------------------------------------------------- Total assets 89,927,511 98,335,763 135,390,837 189,894,291 ---------------------------------------------------------- LIABILITIES: Options written, at value (premiums received ***) - see accompanying statements - Note 4 -- -- -- -- Unrealized depreciation on forward foreign currency exchange contracts - Note 5 -- -- -- -- Payables and other liabilities: Dividends 231,446 -- -- -- Investments purchased -- 1,190,212 280,624 -- Shares of beneficial interest redeemed 8,469 1,419,562 19,613 4,077,624 Other 16,679 27,680 23,216 43,126 ---------------------------------------------------------- Total liabilities 256,594 2,637,454 323,453 4,120,750 ---------------------------------------------------------- NET ASSETS $89,670,917 $95,698,309 $135,067,384 $185,773,541 ========================================================== COMPOSITION OF NET ASSETS: Paid-in capital $89,694,620 $101,247,704 $140,125,237 $170,177,063 Undistributed (distributions in excess of) net investment income -- 1,981,784 1,832,232 711,671 Accumulated net realized gain (loss) from investment, written option and foreign currency transactions (23,703) (3,843,420) (2,398,141) (1,048,111) Net unrealized appreciation (depreciation) on investments, options written and translation of assets and liabilities denominated in foreign currencies -- (3,687,759) (4,491,944) 15,932,918 ---------------------------------------------------------- NET ASSETS $89,670,917 $95,698,309 $135,067,384 $185,773,541 ========================================================== SHARES OF BENEFICIAL INTEREST OUTSTANDING 89,694,620 9,779,151 12,527,081 7,157,574 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $1.00 $9.79 $10.78 $25.95 *Cost $89,427,110 $97,920,437 $137,008,816 $166,985,520 **Repurchase Agreements $2,200,000 $6,000,000 $15,700,000 $23,400,000 ***Premiums received -- -- -- --
See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH STRATEGIES SECURITIES BOND FUND FUND FUND FUND ---------------------------------------------------------- ASSETS: Investments, at value (cost * ) (including repurchase agreements**) - see accompanying statements $60,267,367 $287,971,910 $297,097,313 $20,527,457 Unrealized appreciation on futures contracts - Note 6 -- -- -- 19,136 Cash 298,128 93,979 436,640 179,286 Receivables: Dividends and interest 87,998 3,351,382 405,375 355,898 Shares of beneficial interest sold 2,330,643 174,490 1,469,588 87,118 Investments sold 790,262 1,870,537 663,125 96,758 Other -- 2,303 9,748 15,259 ------------------------------------------------------- Total assets 63,774,398 293,464,601 300,081,789 21,280,912 ------------------------------------------------------- LIABILITIES: Options written, at value (premiums received ***) - see accompanying statements - Note 4 -- 481,381 -- 1,548 Unrealized depreciation on forward foreign currency exchange contracts - Note 5 -- -- 1,151,806 -- Payables and other liabilities: Dividends -- -- -- -- Investments purchased 469,945 841,544 919,245 937,797 Shares of beneficial interest redeemed 2,871 45,585 7,926 -- Other 18,408 28,887 160,891 21,252 ------------------------------------------------------- Total liabilities 491,224 1,397,397 2,239,868 960,597 ------------------------------------------------------- NET ASSETS $63,283,174 $292,067,204 $297,841,921 $20,320,315 ======================================================= COMPOSITION OF NET ASSETS: Paid-in capital $54,399,542 $280,209,466 $304,182,420 $22,014,634 Undistributed (distributions in excess of) net investment income 814,551 1,038,677 (1,069) 111,729 Accumulated net realized gain (loss) from investment, written option and foreign currency transactions 848,014 8,636,344 1,503,327 (769,757) Net unrealized appreciation (depreciation) on investments, options written and translation of assets and liabilities denominated in foreign currencies 7,221,067 2,182,717 (7,842,757) (1,036,291) ------------------------------------------------------- NET ASSETS $63,283,174 $292,067,204 $297,841,921 $20,320,315 ======================================================= SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,579,510 22,619,777 19,743,343 4,418,161 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $17.68 $12.91 $15.09 $4.60 *Cost $53,046,300 $285,911,280 $303,776,414 $21,584,405 **Repurchase Agreements $8,000,000 $17,200,000 $33,800,000 $3,400,000 ***Premiums received -- $607,682 -- $1,600
See accompanying Notes to Financial Statements. STATEMENTS OF OPERATIONS For the Year Ended December 31, 1994 Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL MONEY HIGH INCOME BOND APPRECIATION FUND FUND FUND FUND -------------------------------------------------------- INVESTMENT INCOME: Interest $4,161,100 $9,509,093 $9,585,487 $1,275,631 Dividends: Unaffiliated companies -- 418,776 14,021 376,542 Affiliated companies -- -- -- -- -------------------------------------------------------- Total income (net of withholding taxes of *) 4,161,100 9,927,869 9,599,508 1,652,173 -------------------------------------------------------- EXPENSES: Management fees - Note 8 341,324 617,198 630,514 803,231 Custodian fees and expenses 22,150 21,386 27,333 17,171 Legal and auditing fees 14,929 17,125 14,932 21,982 Trustees' fees and expenses 2,730 4,160 2,460 5,062 Registration and filing fees -- 2,422 9,189 20,451 Other 5,503 11,590 14,158 15,242 -------------------------------------------------------- Total expenses 386,636 673,881 698,586 883,139 -------------------------------------------------------- NET INVESTMENT INCOME 3,774,464 9,253,988 8,900,922 769,034 -------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) on: Investments (5,168) (3,006,191) (914,480) (1,045,951) Expiration and closing of option contracts written - Note 4 -- -- -- -- Foreign currency transactions -- (683,194) (1,455,675) -- Net change in unrealized appreciation or depreciation on: Investments and options written -- (8,762,313) (8,925,071) (10,016,034) Translation of assets and liabilities denominated in foreign currencies -- 132,937 100,340 -- -------------------------------------------------------- Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (5,168) (12,318,761) (11,194,886) (11,061,985) -------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $3,769,296 ($3,064,773) ($2,293,964) ($10,292,951) ======================================================== *Withholding -- $15,178 $18,617 --
See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH STRATEGIES SECURITIES BOND FUND FUND FUND FUND -------------------------------------------------------- INVESTMENT INCOME: Interest $334,611 $13,042,562 $658,349 $1,387,029 Dividends: Unaffiliated companies 835,252 2,252,337 2,445,315 32,822 Affiliated companies -- -- 10,808 -- ------------------------------------------------------- Total income (net of withholding taxes of *) 1,169,863 15,294,899 3,114,472 1,419,851 ------------------------------------------------------- EXPENSES: Management fees - Note 8 307,904 1,433,107 1,517,234 105,760 Custodian fees and expenses 11,043 60,309 280,616 4,959 Legal and auditing fees 12,605 23,706 12,597 10,666 Trustees' fees and expenses 1,962 7,454 1,890 1,419 Registration and filing fees 1,295 18,049 98,664 7,241 Other 10,078 25,155 41,397 3,649 ------------------------------------------------------- Total expenses 344,887 1,567,780 1,952,398 133,694 ------------------------------------------------------- NET INVESTMENT INCOME 824,976 13,727,119 1,162,074 1,286,157 ------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) on: Investments 1,441,127 7,828,434 (558,527,187) (879,244) Expiration and closing of option contracts written - Note 4 -- 741,274 -- -- Foreign currency transactions -- 233,398 558,913,024 83,129 Net change in unrealized appreciation or depreciation on: Investments and options written (1,915,053) (27,789,525) (26,402,301) (1,105,520) Translation of assets and liabilities denominated in foreign currencies -- (400,208) 2,386,926 (15,352) ------------------------------------------------------- Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (473,926) (19,386,627) (23,629,538) (1,916,987) ------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $351,050 ($5,659,508) ($22,467,464) ($630,830) ======================================================= *Withholding -- $45,100 $141,142 $12,168
See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER MONEY HIGH INCOME FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(1) ---------------------------------------------------------- OPERATIONS: Net investment income $3,774,464 $1,795,672 $9,253,988 $7,032,421 Net realized gain (loss) on investments, options written and foreign currency transactions (5,168) 972 (3,689,385) 2,870,765 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies -- -- (8,629,376) 4,936,980 ---------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 3,769,296 1,796,644 (3,064,773) 14,840,166 NET CHANGE IN EQUALIZATION -- -- -- 1,194,413 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (3,793,971) (1,795,672) (6,580,907) (7,933,113) Distributions from net realized gain on investments, options written and foreign currency transactions -- -- (2,106,023) -- Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 28,473,973 2,954,149 14,438,679 44,092,559 ---------------------------------------------------------- NET ASSETS: Total increase (decrease) 28,449,298 2,955,121 2,686,976 52,194,025 Beginning of period 61,221,619 58,266,498 93,011,333 40,817,308 ---------------------------------------------------------- End of period $89,670,917 $61,221,619 $95,698,309 $93,011,333 ==========================================================
1. For the year ended December 31. See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER CAPITAL BOND APPRECIATION FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(1) ---------------------------------------------------------- OPERATIONS: Net investment income $8,900,922 $6,281,918 $769,034 $221,843 Net realized gain (loss) on investments, options written and foreign currency transactions (2,370,155) 431,623 (1,045,951) 17,171,028 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies (8,824,731) 3,179,352 (10,016,034) 8,012,743 ----------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (2,293,964) 9,892,893 (10,292,951) 25,405,614 NET CHANGE IN EQUALIZATION -- 747,196 -- -- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (7,101,380) (6,021,196) (218,275) (173,608) Distributions from net realized gain on investments, options written and foreign currency transactions (283,274) -- (17,112,748) (3,478,465) Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 32,899,881 43,872,915 76,512,412 31,796,464 ----------------------------------------------------------- NET ASSETS: Total increase (decrease) 23,221,263 48,491,808 48,888,438 53,550,005 Beginning of period 111,846,121 63,354,313 136,885,103 83,335,098 ----------------------------------------------------------- End of period $135,067,384 $111,846,121 $185,773,541 $136,885,103 ========================================================== =
1. For the year ended December 31. See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) Oppenheimer Variable Account Funds
OPPENHEIMER OPPENHEIMER MULTIPLE GROWTH STRATEGIES FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(1) ---------------------------------------------------------- OPERATIONS: Net investment income $824,976 $521,913 $13,727,119 $8,871,280 Net realized gain (loss) on investments, options written and foreign currency transactions 1,441,127 (416,658) 8,803,106 3,175,446 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies (1,915,053) 3,377,578 (28,189,733) 17,718,371 ---------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 351,050 3,482,833 (5,659,508) 29,765,097 NET CHANGE IN EQUALIZATION -- -- -- -- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (516,871) (339,216) (13,056,112) (8,601,104) Distributions from net realized gain on investments, options written and foreign currency transactions (127,540) (768,083) (1,925,053) -- Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 6,875,487 17,831,569 62,417,829 69,662,484 ----------------------------------------------------------- NET ASSETS: Total increase (decrease) 6,582,126 20,207,103 41,777,156 90,826,477 Beginning of period 56,701,048 36,493,945 250,290,048 159,463,571 ----------------------------------------------------------- End of period $63,283,174 $56,701,048 $292,067,204 $250,290,048 ========================================================== =
1. For the year ended December 31. 2. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. See accompanying Notes to Financial Statements.
OPPENHEIMER OPPENHEIMER GLOBAL STRATEGIC SECURITIES BOND FUND FUND ---------------------------------------------------------- 1994(1) 1993(1) 1994(1) 1993(2) ---------------------------------------------------------- OPERATIONS: Net investment income $1,162,074 $228,462 $1,286,157 $161,471 Net realized gain (loss) on investments, options written and foreign currency transactions 385,837 2,546,181 (796,115) 23,918 Net change in unrealized appreciation or depreciation on investments, options written and translation of assets and liabilities denominated in foreign currencies (24,015,375) 16,954,257 (1,120,872) 84,581 ---------------------------------------------------------- Net increase (decrease) in net assets resulting from operations (22,467,464) 19,728,900 (630,830) 269,970 NET CHANGE IN EQUALIZATION -- -- -- -- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (359,955) -- (1,161,570) (155,087) Distributions from net realized gain on investments, options written and foreign currency transactions (2,441,859) -- -- -- Distributions in excess of net realized gain on investments, options written and foreign currency transactions -- -- (16,802) -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2 226,686,688 63,158,438 12,242,999 9,771,635 ---------------------------------------------------------- NET ASSETS: Total increase (decrease) 201,417,410 82,887,338 10,433,797 9,886,518 Beginning of period 96,424,511 13,537,173 9,886,518 -- ---------------------------------------------------------- End of period $297,841,921 $96,424,511 $20,320,315 $9,886,518 ==========================================================
1. For the year ended December 31. 2. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .04 .03 .04 .06 .08 Dividends and distributions to shareholders (.04) (.03) (.04) (.06) (.08) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $89,671 $61,221 $58,266 $58,709 $89,143 Average net assets (in thousands) $90,264 $57,654 $61,317 $75,747 $82,966 Number of shares outstanding at end of year (in thousands) 89,695 61,221 58,266 58,703 89,141 Ratios to average net assets: Net investment income 4.18% 3.12% 3.76% 5.97% 7.80% Expenses .43% .43% .50% .49% .51%
OPPENHEIMER MONEY FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations - net investment income and net realized gain on investments .09 .07 .06 .06 .05 Dividends and distributions to shareholders (.09) (.07) (.06) (.06) (.05) --------------------------------------------------------------------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ========================================================== =========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in thousands) $68,440 $69,468 $42,538 $28,218 $2,506 Average net assets (in thousands) $67,586 $60,241 $35,138 $12,914 $2,080 Number of shares outstanding at end of year (in thousands) 68,439 69,468 42,538 28,218 2,506 Ratios to average net assets: Net investment income 8.82% 7.31% 6.33% 5.68% 7.25%(2) Expenses .53% .55% .59% .75% .75%(2)
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Annualized. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER HIGH INCOME FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.02 $ 9.74 $ 9.40 $ 7.90 $ 8.59 Income (loss) from investment operations: Net investment income .94 .82 1.19 1.28 1.21 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (1.27) 1.65 .43 1.30 (.82) -------------------------------------------------------------------- Total income (loss) from investment operations (.33) 2.47 1.62 2.58 .39 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.66) (1.19) (1.28) (1.08) (1.08) Distributions from net realized gain on investments, options written and foreign currency transactions (.24) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.90) (1.19) (1.28) (1.08) (1.08) -------------------------------------------------------------------- Net asset value, end of period $ 9.79 $ 11.02 $ 9.74 $ 9.40 $ 7.90 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (3.18)% 26.34% 17.92% 33.91% 4.65% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 95,698 $93,011 $40,817 $27,308 $19,172 Average net assets (in thousands) $101,096 $67,000 $36,861 $23,663 $21,493 Number of shares outstanding at end of period (in thousands) 9,779 8,443 4,189 2,905 2,427 Ratios to average net assets: Net investment income 9.15% 10.50% 12.08% 14.26% 14.32% Expenses .67% .68% .73% .75% .75% Portfolio turnover rate(4) 110.1% 135.7% 144.2% 108.0% 95.1%
OPPENHEIMER HIGH INCOME FUND ----------------------------------------------------- 1989 1988 1987 1986(1) ----------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 9.30 $ 9.14 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income 1.09 1.12 1.30 .72 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.65) .23 (.51) (.24) ----------------------------------------------------- Total income (loss) from investment operations .44 1.35 .79 .48 ----------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (1.08) (1.07) (1.55) (.44) Distributions from net realized gain on investments, options written and foreign currency transactions (.07) (.12) (.14) -- ----------------------------------------------------- Total dividends and distributions to shareholders (1.15) (1.19) (1.69) (.44) ----------------------------------------------------- Net asset value, end of period $ 8.59 $ 9.30 $ 9.14 $ 10.04 ===================================================== TOTAL RETURN, AT NET ASSET VALUE(2) 4.84% 15.58% 8.07% 4.73% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $23,698 $25,551 $21,768 $14,833 Average net assets (in thousands) $26,040 $24,530 $20,637 $ 8,036 Number of shares outstanding at end of period (in thousands) 2,760 2,746 2,382 1,478 Ratios to average net assets: Net investment income 11.52% 11.94% 13.13% 11.18%(3) Expenses .75% .75% .75% .75%(3) Portfolio turnover rate(4) 78.7% 57.9% 42.1% 18.3%
1. For the period from April 30, 1986 (commencement of operations) to December 31, 1986. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER BOND FUND -------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.65 $ 10.99 $ 11.15 $ 10.33 $ 10.49 Income (loss) from investment operations: Net investment income .76 .65 .87 .95 .97 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.98) .76 (.17) .80 (.18) -------------------------------------------------------------------- Total income (loss) from investment operations (.22) 1.41 .70 1.75 .79 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.62) (.75) (.86) (.93) (.95) Distributions from net realized gain on investments and foreign currency transactions (.03) -- -- -- -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.65) (.75) (.86) (.93) (.95) -------------------------------------------------------------------- Net asset value, end of period $ 10.78 $ 11.65 $ 10.99 $ 11.15 $ 10.33 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) (1.94)% 13.04% 6.50% 17.63% 7.92% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $135,067 $111,846 $63,354 $32,762 $16,576 Average net assets (in thousands) $121,884 $ 87,215 $45,687 $22,169 $15,088 Number of shares outstanding at end of period (in thousands) 12,527 9,602 5,766 2,939 1,604 Ratios to average net assets: Net investment income 7.30% 7.20% 7.81% 8.73% 9.30% Expenses .57% .46% .56% .64% .61% Portfolio turnover rate(4) 35.1% 36.3% 41.3% 7.6% 7.4%
OPPENHEIMER BOND FUND -------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) -------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 10.15 $ 10.19 $ 11.15 $ 11.27 $ 10.00 Income (loss) from investment operations: Net investment income .98 .94 .97 .97 .86 Net realized and unrealized gain (loss) on investments and foreign currency transactions .32 (.05) (.71) .09 .99 -------------------------------------------------------------------- Total income (loss) from investment operations 1.30 .89 .26 1.06 1.85 -------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.96) (.93) (1.17) (1.03) (.58) Distributions from net realized gain on investments and foreign currency transactions -- -- (.05) (.15) -- -------------------------------------------------------------------- Total dividends and distributions to shareholders (.96) (.93) (1.22) (1.18) (.58) -------------------------------------------------------------------- Net asset value, end of period $ 10.49 $ 10.15 $ 10.19 $ 11.15 $ 11.27 ========================================================== ========== TOTAL RETURN, AT NET ASSET VALUE(2) 13.32% 8.97% 2.53% 10.12% 18.82% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $13,422 $ 9,989 $10,415 $7,377 $2,725 Average net assets (in thousands) $11,167 $11,028 $ 8,748 $4,647 $1,614 Number of shares outstanding at end of period (in thousands) 1,280 984 1,022 662 242 Ratios to average net assets: Net investment income 9.34% 9.08% 9.17% 8.71% 10.52%(3) Expenses .64% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 5.4% 36.3% 5.9% 27.7% 101.3%
1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 31.64 $ 26.04 $ 23.24 $ 15.24 $ 20.40 Income (loss) from investment operations: Net investment income .10 .05 .06 .08 .32 Net realized and unrealized gain (loss) on investments and options written (2.22) 6.71 3.43 8.18 (3.54) ---------------------------------------------------------------------- Total income (loss) from investment operations (2.12) 6.76 3.49 8.26 (3.22) ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) (.06) (.14) (.26) (.53) Distributions from net realized gain on investments and options written (3.53) (1.10) (.55) -- (1.41) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (3.57) (1.16) (.69) (.26) (1.94) ---------------------------------------------------------------------- Net asset value, end of period $ 25.95 $ 31.64 $ 26.04 $ 23.24 $ 15.24 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) (7.59)% 27.32% 15.42% 54.72% (16.82)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $185,774 $136,885 $83,335 $49,371 $23,295 Average net assets (in thousands) $153,832 $98,228 $56,371 $34,887 $24,774 Number of shares outstanding at end of period (in thousands) 7,158 4,326 3,201 2,125 1,528 Ratios to average net assets: Net investment income .50% .23% .30% .81% 1.93% Expenses .57% .47% .54% .63% .71% Portfolio turnover rate(5) 96.5% 122.8% 78.9% 122.3% 222.0%
OPPENHEIMER CAPITAL APPRECIATION FUND ---------------------------------------------------------------------- 1989 1988 1987 1986(2) 1986(1) ---------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.31 $ 14.39 $ 13.12 $ 16.21 $ 13.71 Income (loss) from investment operations: Net investment income .50 .33 .21 .12 .09 Net realized and unrealized gain (loss) on investments and options written 3.93 1.60 1.67 (1.24) 3.40 ---------------------------------------------------------------------- Total income (loss) from investment operations 4.43 1.93 1.88 (1.12) 3.49 ---------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.34) -- (.34) (.21) (.20) Distributions from net realized gain on investments and options written -- (.01) (.27) (1.76) (.79) ---------------------------------------------------------------------- Total dividends and distributions to shareholders (.34) (.01) (.61) (1.97) (.99) ---------------------------------------------------------------------- Net asset value, end of period $ 20.40 $ 16.31 $ 14.39 $ 13.12 $ 16.21 ========================================================== ============ TOTAL RETURN, AT NET ASSET VALUE(3) 27.57% 13.41% 14.34% (1.65)% N/A RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $27,523 $13,667 $9,692 $4,549 $3,852 Average net assets (in thousands) $21,307 $13,239 $8,598 $3,099 $2,292 Number of shares outstanding at end of period (in thousands) 1,349 838 674 347 238 Ratios to average net assets: Net investment income 3.27% 2.13% 1.68% 2.36%(4) 2.27% Expenses .68% .73% .75% 1.01%(4) 2.17% Portfolio turnover rate(5) 130.5% 128.7% 138.7% 100.1% 464.8%
1. For the year ended June 30, 1986. Operating results were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 2. For the six months ended December 31, 1986. Operating results prior to August 15, 1986 were achieved by Centennial Capital Appreciation Fund, a separate investment company acquired by OCAP on August 14, 1986. 3. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 4. Annualized. 5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990 --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 17.70 $ 16.96 $ 15.17 $ 12.54 $ 16.38 Income (loss) from investment operations: Net investment income .22 .46 .16 .30 .56 Net realized and unrealized gain (loss) on investments and foreign currency transactions (.05) .74 1.99 2.82 (1.79) --------------------------------------------------------------------- Total income from investment operations .17 1.20 2.15 3.12 (1.23) --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.15) (.14) (.36) (.49) (.62) Distributions from net realized gain on investments and foreign currency transactions (.04) (.32) -- -- (1.99) --------------------------------------------------------------------- Total dividends and distributions to (.19) (.46) (.36) (.49) (2.61) shareholders --------------------------------------------------------------------- Net asset value, end of period $ 17.68 $ 17.70 $ 16.96 $ 15.17 $ 12.54 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) .97% 7.25% 14.53% 25.54% (8.21)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $63,283 $56,701 $36,494 $22,032 $15,895 Average net assets (in thousands) $59,953 $46,389 $25,750 $18,810 $17,235 Number of shares outstanding at end of period (in thousands) 3,580 3,203 2,152 1,453 1,267 Ratios to average net assets: Net investment income 1.38% 1.13% 1.36% 2.82% 4.09% Expenses .58% .50% .61% .70% .71% Portfolio turnover rate(4) 53.8% 12.6% 48.7% 133.9% 267.9%
OPPENHEIMER GROWTH FUND --------------------------------------------------------------------- 1989 1988 1987 1986 1985(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.64 $ 11.21 $ 12.53 $ 10.95 $ 10.00 Income (loss) from investment operations: Net investment income .66 .29 .20 .13 .16 Net realized and unrealized gain (loss) on investments and foreign currency transactions 2.50 2.19 .24 1.76 .79 --------------------------------------------------------------------- Total income from investment operations 3.16 2.48 .44 1.89 .95 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.35) -- (.34) (.15) -- Distributions from net realized gain on investments and foreign currency transactions (.07) (.05) (1.42) (.16) -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.42) (.05) (1.76) (.31) -- --------------------------------------------------------------------- Net asset value, end of period $ 16.38 $ 13.64 $ 11.21 $ 12.53 $ 10.95 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) 23.59% 22.09% 3.32% 17.76% 9.50% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $19,301 $17,746 $14,692 $8,287 $ 820 Average net assets (in thousands) $18,596 $15,585 $15,121 $3,744 $ 388 Number of shares outstanding at end of period (in thousands) 1,179 1,301 1,311 661 75 Ratios to average net assets: Net investment income 3.72% 2.39% 1.56% 2.62% 4.25%(3) Expenses .70% .70% .75% .75% .75%(3) Portfolio turnover rate(4) 148.0% 132.5% 191.0% 100.9% 132.9%
1. For the period from April 3, 1985 (commencement) to December 31, 1985. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER MULTIPLE STRATEGIES FUND ------------------------------------------------------------------------ Year Ended December 31, 1994 1993 1992 1991 1990 ------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period $ 13.88 $ 12.47 $ 11.96 $ 10.90 $ 12.30 Income (loss) from investment operations: Net investment income .63 .55 .55 .69 .73 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.90) 1.41 .50 1.15 (.97) ------------------------------------------------------------------------ Total income (loss) from investment operations (.27) 1.96 1.05 1.84 (.24) ------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.60) (.55) (.54) (.78) (.70) Distributions from net realized gain on investments, options written and foreign currency transactions (.10) -- -- -- (.46) ------------------------------------------------------------------------ Total dividends and distributions to shareholders (.70) (.55) (.54) (.78) (1.16) ------------------------------------------------------------------------ Net asset value, end of period $ 12.91 $ 13.88 $ 12.47 $ 11.96 $ 10.90 ========================================================== ============== TOTAL RETURN, AT NET ASSET VALUE(2) (1.95)% 15.95% 8.99% 17.48% (1.91)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $292,067 $250,290 $159,464 $124,634 $118,888 Average net assets (in thousands) $279,949 $199,954 $139,011 $117,000 $123,231 Number of shares outstanding at end of period (in thousands) 22,620 18,026 12,792 10,421 10,908 Ratios to average net assets: Net investment income 4.90% 4.44% 4.63% 5.95% 6.53% Expenses .56% .48% .55% .54% .55% Portfolio turnover rate(4) 31.4% 32.4% 57.8% 80.3% 99.2%
OPPENHEIMER MULTIPLE STRATEGIES FUND --------------------------------------- 1989 1988 1987(1) --------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.58 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .73 .66 .44 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions 1.04 1.53 .07 --------------------------------------- Total income (loss) from investment operations 1.77 2.19 .51 --------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.68) (.65) (.43) Distributions from net realized gain on investments, options written and foreign currency transactions (.37) -- (.04) --------------------------------------- Total dividends and distributions to shareholders (1.05) (.65) (.47) ======================================= Net asset value, end of period $ 12.30 $ 11.58 $ 10.04 TOTAL RETURN, AT NET ASSET VALUE(2) 15.76% 22.15% 3.97% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $121,286 $78,386 $53,291 Average net assets (in thousands) $101,057 $64,298 $34,256 Number of shares outstanding at end of period (in thousands) 9,860 6,766 5,306 Ratios to average net assets: Net investment income 6.36% 6.18% 6.12%(3) Expenses .57% .58% .65%(3) Portfolio turnover rate(4) 66.9% 110.0% 46.9%
1. For the period from February 9, 1987 (commencement of operations) to December 31, 1987. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER GLOBAL SECURITIES FUND --------------------------------------------------------------------- Year Ended December 31, 1994 1993 1992 1991 1990(1) --------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.30 $ 9.57 $ 10.38 $ 10.04 $ 10.00 Income (loss) from investment operations: Net investment income .04 (.02) .07 .04 -- Net realized and unrealized gain (loss) on investments and foreign currency transactions (.96) 6.75 (.80) .30 .04 --------------------------------------------------------------------- Total income (loss) from investment operations (.92) 6.73 (.73) .34 .04 --------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.04) -- (.04) -- -- Distributions from net realized gain on investments and foreign currency transactions (.25) -- (.04) -- -- --------------------------------------------------------------------- Total dividends and distributions to shareholders (.29) -- (.08) -- -- --------------------------------------------------------------------- Net asset value, end of period $ 15.09 $ 16.30 $ 9.57 $ 10.38 $ 10.04 ========================================================== =========== TOTAL RETURN, AT NET ASSET VALUE(2) (5.72)% 70.32% (7.11)% 3.39% .40% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $297,842 $96,425 $13,537 $7,339 $ 432 Average net assets (in thousands) $214,545 $31,696 $11,181 $3,990 $ 263 Number of shares outstanding at end of period (in thousands) 19,743 5,917 1,415 707 43 Ratios to average net assets: Net investment income .54% .72% 1.04% .75% .08%(3) Expenses .91% .92% 1.06% 1.32% 6.84%(3) Portfolio turnover rate(4) 70.4% 65.1% 34.1% 29.5% 0.0%
1. For the period from November 12, 1990 (commencement of operations) to December 31, 1990. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS Oppenheimer Variable Account Funds
OPPENHEIMER STRATEGIC BOND FUND -------------------------------- Year Ended December 31, 1994 1993(1) -------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 5.12 $ 5.00 Income (loss) from investment operations: Net investment income .35 .10 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions (.54) .11 -------------------------------- Total income (loss) from investment operations (.19) .21 -------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.32) (.09) Distributions from net realized gain on investments, options written and foreign currency transactions -- -- Distributions in excess of net realized gain on investments (.01) -- -------------------------------- Total dividends and distributions to shareholders (.33) (.09) -------------------------------- Net asset value, end of period $ 4.60 $ 5.12 ================================ TOTAL RETURN, AT NET ASSET VALUE(2) (3.78)% 4.25% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $20,320 $9,887 Average net assets (in thousands) $15,389 $4,259 Number of shares outstanding at end of period (in thousands) 4,418 1,930 Ratios to average net assets: Net investment income 8.36% 5.67%(3) Expenses .87% .96%(3) Portfolio turnover rate(4) 136.6% 10.9%
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. 2. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. See accompanying Notes to Financial Statements. NOTES TO FINANCIAL STATEMENTS Oppenheimer Variable Account Funds 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Money Fund (OMF), Oppenheimer High Income Fund (OHIF), Oppenheimer Bond Fund (OBF), Oppenheimer Capital Appreciation Fund (OCAP), Oppenheimer Growth Fund (OGF), Oppenheimer Multiple Strategies Fund (OMSF), Oppenheimer Global Securities Fund (OGSF) and Oppenheimer Strategic Bond Fund (OSBF) (collectively, the Funds) are separate series of Oppenheimer Variable Account Funds (the Trust), a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Trust's investment advisor is Oppenheimer Management Corporation (the Manager). The following is a summary of significant accounting policies consistently followed by the Funds. INVESTMENT VALUATION. Portfolio securities of OMF are valued on the basis of amortized cost, which approximates market value. Portfolio securities of OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF are valued at 4:00 p.m. (New York time) on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Long-term debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Long-term debt securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Options are valued based upon the last sale price on the principal exchange on which the option is traded or, in the absence of any transactions that day, the value is based upon the last sale on the prior trading date if it is within the spread between the closing bid and asked prices. If the last sale price is outside the spread, the closing bid or asked price closest to the last reported sale price is used. Forward foreign currency exchange contracts (forward contracts) are valued at the closing price on the London foreign exchange market on a daily basis. SECURITY CREDIT RISK. OHIF, OMSF and OSBF invest in high yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rated fixed income securities. The Funds may acquire securities in default, and are not obligated to dispose of securities whose issuers subsequently default. At December 31, 1994, securities with an aggregate market value of $4,260,529 for OHIF, $561,000 for OMSF and $52,077 for OSBF, representing 4.45%, 1.92% and .25% respectively, of the Funds' total assets, were in default. FOREIGN CURRENCY TRANSLATION. The accounting records of the Funds are maintained in U.S. dollars. Prices of securities purchased by OHIF, OBF, OGF, OMSF, OGSF and OSBF that are denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Funds' results of operations. REPURCHASE AGREEMENTS. The Funds require the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Funds may be delayed or limited. FEDERAL INCOME TAXES. The Trust intends for each Fund to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income tax provision is required. At December 31, 1994, the following Funds had available for federal income tax purposes unused capital loss carryovers expiring in 2002: OMF -- $5,000 OHIF -- $1,231,000 OBF -- $275,000 OSBF -- $596,000
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds EQUALIZATION. Prior to September 25, 1993, OHIF and OBF followed the accounting practice of equalization, by which a portion of the proceeds from sales and costs of redemptions of Fund shares equivalent on a per share basis to the amount of undistributed net investment income were credited or charged to undistributed income. The cumulative effect of the change in accounting practice resulted in a reclassification for OHIF and OBF of $2,119,310 and $1,577,200, respectively, from undistributed net investment income to paid-in capital. DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders of OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF are recorded on the ex-dividend date. OMF intends to declare dividends from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. To effect its policy of maintaining a net asset value of $1.00 per share, OMF may withhold dividends or make distributions of net realized gains. CHANGE IN ACCOUNTING CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of premium amortization, paydown gains and losses and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) were recorded by the Funds. Effective January 1, 1994, the Funds adopted Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the Funds changed the classification of distributions to shareholders to better disclose the differences between financial statement amounts and distributions determined in accordance with income tax regulations. These changes, as well as similar changes in classification made during the fiscal year ending December 31, 1994 are shown below:
Cumulative Adjustments as of Adjustments for the Fiscal Year Ended December 31, 1993 December 31, 1994 - ----------------------------------------------------------------------------------------------------------------------- Undistributed Undistributed Undistributed Undistributed Net Net Net Net Investment Realized Paid-in Investment Realized Paid-in Income Gains/(Losses) Capital Income Gains/(Losses) Capital - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer High Income Fund $203,008 $(293,507) $ 90,499 $(368,824) $368,824 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Bond Fund (39,100) 474,282 (435,182) 10,134 (10,134) -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund (20,604) 14,186 6,418 (52,642) 52,642 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Growth Fund (15,808) 15,808 -- (2,011) 2,011 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Multiple Strategies Fund (203,319) 247,718 (44,399) (27,187) 27,187 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Global Securities Fund 10,825 80,207 (91,032) (1,153,447) 1,153,447 -- - ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Strategic Bond Fund 7,021 (7,021) -- (26,263) 26,263 -- - -----------------------------------------------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased by OHIF, OBF, OCAP, OGF, OMSF, OGSF and OSBF is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. Dividends in kind are recognized as income on the ex-dividend date, at the current market value of the underlying security. Interest on payment-in-kind debt instruments is accrued as income at the coupon rate and a market adjustment is made on the ex-date. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 2. SHARES OF BENEFICIAL INTEREST The Funds have authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
OPPENHEIMER MONEY FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 175,917,558 $175,917,558 102,985,240 $102,985,240 Dividends and distributions reinvested 3,640,684 3,640,684 1,805,107 1,805,107 Redeemed (151,084,269) (151,084,269) (101,836,198) (101,836,198) ------------------------------------------------------------------ Net increase 28,473,973 $ 28,473,973 2,954,149 $ 2,954,149 ========================================================== ========
OPPENHEIMER HIGH INCOME FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 9,936,582 $81,477,904 10,942,819 $113,254,844 Dividends and distributions reinvested 841,101 8,686,931 743,446 7,814,552 Redeemed (9,441,490) (75,726,156) (7,432,492) (76,976,837) -------------------------------------------------------------------- Net increase 1,336,193 $14,438,679 4,253,773 $ 44,092,559 ========================================================== ==========
OPPENHEIMER BOND FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 5,002,623 $ 56,466,171 4,694,025 $ 53,668,794 Dividends and distributions reinvested 666,678 7,384,654 518,084 5,957,407 Redeemed (2,744,016) (30,950,944) (1,375,924) (15,753,286) -------------------------------------------------------------------- Net increase 2,925,285 $ 32,899,881 3,836,185 $ 43,872,915 ========================================================== ==========
OPPENHEIMER CAPITAL APPRECIATION FUND ------------------------------------------------------------------ YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ------------------------------------------------------------------ SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------ Sold 7,912,557 $ 173,453,586 4,925,361 $ 134,864,285 Dividends and distributions reinvested 614,575 17,331,023 151,099 3,652,073 Redeemed (5,695,411) (114,272,197) (3,951,312) (106,719,894) -------------------------------------------------------------------- Net increase 2,831,721 $ 76,512,412 1,125,148 $ 31,796,464 ========================================================== ==========
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 2. SHARES OF BENEFICIAL INTEREST (Continued)
OPPENHEIMER GROWTH FUND ----------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ----------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------- Sold 2,577,268 $ 45,230,951 3,164,464 $ 53,547,991 Dividends and distributions reinvested 36,305 644,411 66,987 1,107,299 Redeemed (2,236,767) (38,999,875) (2,180,502) (36,823,721) ---------------------------------------------------------- Net increase 376,806 $ 6,875,487 1,050,949 $ 17,831,569 ==========================================================
OPPENHEIMER MULTIPLE STRATEGIES FUND ----------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 ----------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------- Sold 9,807,084 $ 84,443,396 6,332,739 $ 84,477,261 Dividends and distributions reinvested 1,140,244 14,981,165 644,161 8,601,104 Redeemed (6,353,523) (37,006,732) (1,742,975) (23,415,881) ------------------------------------------------------------- Net increase 4,593,805 $ 62,417,829 5,233,925 $ 69,662,484 ========================================================== ===
OPPENHEIMER GLOBAL SECURITIES FUND -------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 -------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT -------------------------------------------------------------- Sold 22,151,454 $ 336,310,887 4,921,273 $ 68,947,505 Dividends and distributions reinvested 178,687 2,801,813 -- -- Redeemed (8,503,911) (112,426,012) (419,042) (5,789,067) -------------------------------------------------------------- Net increase 13,826,230 $ 226,686,688 4,502,231 $ 63,158,438 ========================================================== ====
OPPENHEIMER STRATEGIC BOND FUND -------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 1994 DECEMBER 31, 1993 -------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT -------------------------------------------------------------- Sold 3,749,500 $18,415,292 2,316,566 $ 11,749,598 Dividends and distributions reinvested 247,485 1,178,372 30,366 155,087 Redeemed (1,508,782) (7,350,665) (416,974) (2,133,050) -------------------------------------------------------------- Net increase 2,488,203 $12,242,999 1,929,958 $ 9,771,635 ========================================================== ====
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS AND OPTIONS WRITTEN At December 31, 1994, net unrealized appreciation or depreciation on investments and options written consisted of the following:
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL OPPENHEIMER MULTIPLE HIGH INCOME BOND APPRECIATION GROWTH STRATEGIES FUND FUND FUND FUND FUND ------------------------------------------------------------------------------------- Gross appreciation $ 2,552,277 $ 998,839 $23,149,613 $ 9,180,511 $ 24,352,704 Gross depreciation (6,244,151) (5,495,358) (7,216,695) (1,959,444) (22,166,686) ------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) $(3,691,874) $(4,496,519) $15,932,918 $ 7,221,067 $ 2,186,018 ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------- Purchases and sales of investment securities (excluding short-term securities) for the year ended December 31, 1994 were as follows: Purchases $112,258,989 $66,764,507 $179,543,692 $31,787,923 $144,299,360 ========================================================== ========================== Sales $100,322,621 $34,324,730 $127,358,246 $28,013,126 $ 82,139,044 ========================================================== ==========================
OPPENHEIMER OPPENHEIMER GLOBAL SECURITIES STRATEGIC BOND FUND FUND ------------------------------------------------------------------------------------- Gross appreciation $ 19,078,105 $ 124,895 Gross depreciation (26,920,862) (1,162,656) --------------------------------- Net unrealized appreciation (depreciation) $ (7,842,757) $ (1,037,761) ================================= Purchases and sales of investment securities (excluding short-term securities) for the year ended December 31, 1994 were as follows: Purchases $342,349,671 $29,385,446 ================================ Sales $141,562,451 $19,880,751 ================================
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 4. OPTION ACTIVITY OHIF, OCAP, OGF, OMSF, OGSF and OSBF may buy and sell put and call options, or write covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Funds generally purchase put options or write covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. The Funds segregate assets to cover their obligations under option contracts. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Funds will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. In this report, securities segregated to cover outstanding call options are noted in the Statement of Investments. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a footnote to the Statement of Investments where applicable. Options written are reported as a liability in the Statement of Assets and Liabilities. Gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Funds pay a premium whether or not the option is exercised. The Funds also have the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. OHIF option activity for the period ended December 31, 1994 was as follows:
CALL OPTIONS ---------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ---------------------- Options outstanding at December 31, 1993 -- -- Options written 39,741 $ 50,381 Options cancelled in closing purchase transactions (39,741) (50,381) Options expired prior to exercise -- -- Options exercised -- -- ---------------------- Options outstanding at December 31, 1994 -- $ -- ======================
OCAP option activity for the period ended December 31, 1994 was as follows:
CALL OPTIONS ---------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ---------------------- Options outstanding at December 31, 1993 -- -- Options written 250 $ 200,618 Options cancelled in closing purchase transactions (250) (200,618) Options expired prior to exercise -- -- Options exercised -- -- ---------------------- Options outstanding at December 31, 1994 -- $ -- ======================
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds OMSF option activity for the year ended December 31, 1994 was as follows:
CALL OPTIONS ------------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ------------------------- Options outstanding at December 31, 1993 2,385 $ 654,848 Options written 4,394 1,285,996 Options cancelled in closing purchase transactions (1,425) (487,059) Options expired prior to exercise (1,932) (495,481) Options exercised (1,167) (350,622) ------------------------- Options outstanding at December 31, 1994 2,255 $ 607,682 ------------------------- -------------------------
OSBF option activity for the year ended December 31, 1994 was as follows:
PUT OPTIONS ------------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ------------------------- Options outstanding at December 31, 1993 -- $ -- Options written 279,064 4,348 Options cancelled in closing transactions -- -- Options expired prior to exercise (279,064) (4,348) Options exercised -- -- ------------------------- Options outstanding at December 31, 1994 -- $ -- ------------------------- -------------------------
CALL OPTIONS ------------------------- NUMBER OF AMOUNT OF OPTIONS PREMIUMS ------------------------- Options outstanding at December 31, 1993 -- $ -- Options written 1,288,535 26,046 Options cancelled in closing transactions (1,288,223) (16,321) Options expired prior to exercise (5) (8,125) Options exercised -- -- ------------------------- Options outstanding at December 31, 1994 307 $ 1,600 ------------------------- -------------------------
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS A forward foreign currency exchange contract (forward contract) is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. OHIF, OGSF and OSBF use forward contracts to seek to manage foreign currency risks. They may also be used to tactically shift portfolio currency risk. The Funds generally enter into forward contracts as a hedge upon the purchase or sale of a security denominated in a foreign currency. In addition, the Funds may enter into such contracts as a hedge against changes in foreign currency exchange rates on portfolio positions. Forward contracts are valued at the closing price on the London foreign exchange market on a daily basis. The Funds will realize a gain or loss upon the closing or settlement of the forward transaction. In this report, securities segregated to cover net exposure on outstanding forward contracts are noted in the Statement of Investments where applicable. Gains and losses on outstanding contracts (unrealized appreciation or depreciation on forward contracts) are reported in the Statement of Assets and Liabilities. Realized gains and losses are reported with all other foreign currency gains and losses in the Funds' results of operations. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds Risks include the potential inability of the counterparty to meet the terms of the contract and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. At December 31, 1994, outstanding forward contracts to sell foreign currencies were as follows: OPPENHEIMER GLOBAL SECURITIES FUND
UNREALIZED EXPIRATION CONTRACT VALUATION AS OF APPRECIATION CONTRACTS TO SELL DATE AMOUNT DECEMBER 31, (DEPRECIATION) 1994 - -------------------------------------------------------------------------------- Austrian Schilling 1/30/95 $ 6,000,000 $ 6,104,867 $ (104,867) British Pound 1/30/95 7,800,000 7,895,404 (95,404) Deutsche Mark 1/30/95 11,000,000 11,190,341 (190,341) Finnish Markka 1/30/95 3,000,000 3,012,855 (12,855) French Franc 1/30/95 8,400,000 8,564,740 (164,740) Italian Lira 1/30/95 2,500,000 2,527,596 (27,596) Netherlands Guilder 1/30/95 6,000,000 6,104,844 (104,844) Norwegian Krone 1/30/95 6,800,000 6,916,652 (116,652) Portuguese Escudo 1/30/95 7,000,000 7,130,583 (130,583) Spanish Peseta 1/30/95 2,500,000 2,530,139 (30,139) Swedish Krona 1/30/95 13,783,574 13,879,376 (95,802) Swiss Franc 1/30/95 4,307,443 4,385,426 (77,983) -------------------------------------------- $79,091,017 $80,242,823 $(1,151,806) ============================================
6. FUTURES CONTRACTS OHIF, OGSF and OSBF may buy and sell interest rate futures contracts in order to gain exposure to or protect against changes in interest rates. The Funds may also buy or write put or call options on these futures contracts. The Funds generally sell futures contracts to hedge against increases in interest rates and the resulting negative effect on the value of fixed rate portfolio securities. The Funds may also purchase futures contracts to gain exposure to changes in interest rates as it may be more efficient or cost effective than actually buying fixed income securities. The Funds will segregate assets to cover their commitments under futures contracts. Upon entering into a futures contract, the Funds are required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Funds each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Funds recognize a realized gain or loss when the contract is closed or expires. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds In this report, the number of open futures contracts, face amount, market value and unrealized gain or loss are reported in a footnote to the Statement of Investments. In addition, securities segregated to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. Gains and losses (unrealized appreciation or depreciation on futures contracts) are reported in the Statement of Assets and Liabilities. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. At December 31, 1994, outstanding futures contracts to purchase and sell debt securities were as follows: OPPENHEIMER STRATEGIC BOND FUND
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACTS TO PURCHASE DATE CONTRACTS DECEMBER 31, 1994 (DEPRECIATION) - ------------------------------------------------------------------------------------------- German 10 Year Bond 3/95 25 $3,592,705 $(21,919) -------------------------------------------------- CONTRACTS TO SELL - ----------------------- French 10 Year Bond 3/95 38 3,912,655 41,055 -------------------------------------------------- (13) $ (319,950) $ 19,136 ==================================================
7. RESTRICTED SECURITIES The following Funds own securities purchased in private placement transactions, without registration under the Securities Act of 1933 (the Act). The securities are valued under methods approved by the Board of Trustees as reflecting fair value. Each Fund intends to invest no more than 10% of its net assets (determined at the time of purchase) in restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act that are determined to be liquid by the Board of Trustees or by the Manager under Board-approved guidelines. Illiquid and/or restricted securities, including those restricted securities that are transferable under Rule 144A of the Act are listed below. Oppenheimer High Income Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00(1) 8/24/94 $ 100.00 $ 85.25 Berg Electronics Holdings Corp.(1) 4/28/93-8/11/93 $ 1.19 $ 4.50 Brazil (Federal Republic of) Bonds, 10.375%, 11/6/95(1) 4/26/93 $ 99.80 $ 99.00 Celcaribe SA(1) 5/17/94 $ 1.19 $ 1.15 Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 03/15/04(1) 5/17/94 $ 60.78 $ 65.26 Dell Computer Corp., $7.00 Cv., Series A(1) 8/19/93-1/24/94 $ 103.11 $ 172.50 ECM Fund L.P.I. 4/14/92 $1,000.00 $1,000.00 ECM Fund L.P.I., 14% Sub. Nts., 6/10/02 4/14/92 $ 100.00 $ 110.00 GPA Holland, 9.50% Medium-Term Nts., Series A, 12/15/01 1/27/94 $ 79.96 $ 66.50 Gillett Holdings, Inc., Cl. 1 12/1/92 $ 10.50 $ 19.63 GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10(1) 1/29/93 $ 102.40 $ 106.13 Hillsborough Holding Corp., 7.50% Participation Agreement, 12/30/99 1/6/94 $ 128.50 $ 157.50 Icon Health & Fitness, Units(1) 11/4/94 $ 98.77 $ 98.50 Lehman Brothers Holdings, Inc., Standard & Poor's 500 Index-Linked Nts., 5.788%, 1/25/95 11/22/94 $ 144.40 $ 117.12 Merrill Lynch & Co., Inc., Standard & Poor's 500 Index-Linked Nts., 5.60%, 2/6/95 11/28/94 $ 143.80 $ 116.99 Mary Kay Corp., 12.75% Gtd. Sr. Nts., Series B, 12/6/00 12/11/92-3/22/93 $ 106.50 $ 104.50 PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01(1) 11/17/94 $ 66.83 $ 66.50 Purity Supreme, Inc. Wts., Exp. 8/97 7/29/92 $ 0.00 $ .02 Residential Funding Corp. Mtg. Pass-Through Certificates, 7.97%, Series 1993-J2, Cl. B1, 6/15/23(1) 6/29/93 $ 83.97 $ 70.95 SD Warren Co., 12% Sr. Sub. Nts., 12/15/04(1) 12/13/94 $ 100.00 $ 103.00 Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(1) 12/20/93 $ 99.93 $ 86.50 Terex Corp. Rts., Exp. 7/96(1) 6/29/94 $ 4.00 $ 0.75
NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds Oppenheimer High Income Fund (Continued)
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Terex Corp., 13% Nts., 8/1/96(1) 10/19/94-11/15/94 $ 97.18 $91.74 Triangle Wire & Cable, Inc. 5/2/94 $ 9.50 $ 4.00 Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(1) 11/8/93 $100.00 $86.50
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $4,206,558 or 4.4% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Bond Fund
VALUATION PER UNIT ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Corporacion Andina de Fomento Bonds, 6.625%, 10/14/98(1) 9/24/93 $ 99.95 $ 90.00 Corporacion Andina de Fomento Nts., 7.25%, 4/30/98(1) 4/16/93 $ 99.38 $ 91.88 Czechoslovakia National Bank Bonds, 7%, 4/6/96(1) 3/11/93 $ 99.93 $ 98.81 GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10(1) 1/29/93 $102.38 $106.13 FDIC Trust, Series 1994-C1, Cl. 2-D, 8.70%, 9/25/25 8/11/94 $ 98.00 $ 95.13 FDIC Trust, Series 1994-C1, Cl. 2-E, 8.70%, 9/25/25 8/11/94 $ 94.88 $ 91.66
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $2,801,719 or 2.1% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Capital Appreciation Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 11/2/93-10/28/94 $ 99.04 $ 80.44 Medaphis Corp., 6.50% Cv. Sub. Nts., 1/1/00(1) 12/22/92 $100.00 $167.25 PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 8/19/94 $100.00 $ 68.50 Sierra On-Line, Inc., 6.50% Cv. Sub. Nts., 4/1/01(1) 11/16/94 $106.00 $127.50
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $1,545,666 or .83% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Multiple Strategies Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Central Puerto SA, ADR(1) 7/20/94-7/22/94 $ 31.81 $24.75 PerSeptive Biosystems, Inc., 8.25% Cv. Sub. Debs., 8/15/01 8/19/94 $100.00 $68.50 PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01(1) 11/17/94 $ 67.00 $66.50 Samsung Electronics Co, GDR(1) 8/18/94 $ 38.28 $46.50 Santa Anita Realty Enterprises, Inc., Units 5/28/93-11/29/93 $ 17.96 $13.75 Turkiye Garanti Bankasi AS, Sponsored ADR(1) 7/20/94-7/22/94 $ 2.20 $ 2.53 YuKong Ltd., GDR(1) 9/29/94 $ 24.95 $15.75 YuKong Ltd., GDR(1) 10/18/94-12/22/94 $ 16.75 $15.00
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $755,000 or .26% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds Oppenheimer Global Securities Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Capex SA, GDR(1) 6/13/94 $ 20.00 $ 16.38 Carulla SA(1) 6/23/94 $ 11.33 $ 11.54 Central Puerto SA, ADR(1) 11/23/93 $ 26.50 $ 24.75 First NIS Regional Fund(1) 11/23/94 $ 4.00 $ 4.25 Hindustan Development Corp. Ltd., Units(1) 9/19/94 $ 4.10 $ 2.13 Indian Rayon and Industries Ltd., GDR(1) 1/28/94 $ 22.51 $ 19.45 Indo Gulf Fertilizer, GDR(1) 1/17/94 $ 4.51 $ 2.99 Industrial Credit and Investment Corp. India Ltd., 2.50% Cv. Debs., 4/30/00(1) 2/3/94 $ 108.40 $ 75.00 Internacional de Ceramica SA, Series B, ADR(1) 2/10/93-2/11/93 $ 25.40 $ 17.77 JK Corp. Ltd., GDR(1) 10/17/94 $ 8.00 $ 6.73 Mavesa, ADR(1) 8/25/94 $ 5.88 $ 4.95 Pakistan Telecommunications, GDR(1) 9/19/94-10/4/94 $ 186.07 $ 135.50 Plant Genetics Systems International NV 5/27/92 $ 11.18 $ 7.55 President Enterprises Corp.(1) 10/11/94 $ 15.83 $ 20.25 PT Panin Bank(1) 7/2/93-9/22/94 $ 1.52 $ 1.39 Reliance Industries Ltd., GDS(1) 10/4/94-10/20/94 $ 28.57 $ 19.80 Samsung Electronics Co, GDR(1) 8/18/94 $ 38.28 $ 46.50 Scici Ltd., 3.50% Cv. Bonds, 4/1/04(1) 10/19/93-1/20/94 $ 117.00 $ 88.00 Taipei Fund, Cl. B, IDR 12/26/93 $80,000.00 $95,900.00 Tata Electric Cos.(1) 2/22/94 $ 710.00 $ 437.50 Tung Ho Steel Enterprise Corp., GDR(1) 9/9/94 $ 17.20 $ 15.50 Turkiye Garanti Bankasi AS, Sponsored ADR(1) 10/29/93-10/4/94 $ 2.24 $ 2.53 VA Technoligie AG(1) 5/19/94-9/13/94 $ 96.82 $ 100.66 YuKong Ltd., GDR(1) 9/9/94-10/18/94 $ 26.05 $ 15.00
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $644,114, or .22% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. Oppenheimer Strategic Bond Fund
VALUATION ACQUISITION COST AS OF SECURITY DATE PER UNIT DECEMBER 31, 1994 - ---------------------------------------------------------------------------------------------------------------------------- Argentina Local Market Securities Trust, Series 1994-II, 11.30%, 4/1/00(1) 8/24/94 $100.00 $ 85.25 Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(1) 5/17/94 $ 60.78 $ 65.26 Celcaribe SA(1) 5/17/94 $ 1.19 $ 1.15 Ecuador (Republic of) Bonds, 12/29/49(1) 10/7/94 $ 60.50 $ 54.38 GPA Holland BV, 8.625% Medium-Term Nts., Series C, 1/15/99 1/10/94 $ 78.13 $ 71.50 Icon Health & Fitness, Inc., Units(1) 1/4/94 $ 98.79 $ 98.50 Lehman Brothers Holdings, Inc., Standard & Poor's Index- Linked Nts., 5.788%, 1/25/95 11/22/94 $144.40 $117.12 PriCellular Wireless Corp., .50%/14% Sr. Sub. Disc. Nts., 11/15/01(1) 11/17/94 $ 66.83 $ 66.50 SD Warren Co., 12% Sr. Sub. Nts., 12/15/04(1) 12/13/94 $100.00 $103.00 Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(1) 12/20/93 $ 99.93 $ 86.50 Terex Corp., 13% Sr. Nts., 8/1/96(1) 10/21/94 $ 97.25 $ 94.75 Terex Corp. Rts., Exp. 7/96(1) 6/29/94 $ 1.49 $ 0.75 Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(1) 11/8/93 $100.00 $ 86.50 United Mexican States, Combined Facility 3, Loan Participation Agreement, 7.625%, 3/20/00 10/25/94 $ 89.00 $ 86.00 United Mexican States, Myra Old Money Loan Participation Agreement, 7.625%, 3/20/05 10/12/94 $ 82.88 $ 69.50
Restricted and illiquid securities, excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $548,310 or 2.7% of the Fund's net assets, at December 31, 1994. 1. Transferable under Rule 144A of the Act. NOTES TO FINANCIAL STATEMENTS (Continued) Oppenheimer Variable Account Funds 8. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreements with the Trust. For OBF, OCAP, OGF, OMSF, OHIF, OGSF and OSBF, the annual fees are .75% of the first $200 million of net assets, .72% of the next $200 million, .69% of the next $200 million, .66% of the next $200 million and .60% of net assets in excess of $800 million. In addition, management fees for OHIF, OBF and OSBF are .50% of net assets in excess of $1 billion. Management fees for OMF are .45% of the first $500 million, .425% of the next $500 million, .40% of the next $500 million and .375% of net assets in excess of $1.5 billion. The Manager has agreed to reimburse any Fund if aggregate Fund expenses (with specified exceptions) exceed 2.5% of the first $30 million of the Fund's net assets, plus 2.0% of the next $70 million, plus 1.5% of net assets in excess of $100 million. For OSBF, the Manager has agreed to limit the management fee charged so that the ordinary operating expenses of the Fund will not exceed 1.0% of its average net assets in any fiscal year. Prior to September 1, 1994, management fees were as follows: except as stated below, the annual fees were .50% of the first $250 million of aggregate Trust net assets, .45% of the next $50 million, .40% of the next $100 million, .35% of the next $400 million and .30% of net assets in excess of $800 million. OMF fees were reduced by .05% of the first $250 million of Fund net assets, as well as on Fund net assets in excess of $4 billion. OHIF paid an additional management fee of .15% of its net assets annually. OGSF fees were .75% of the first $200 million of aggregate Trust net assets with a reduction of .03% of each $200 million thereafter to $800 million, and .60% of net assets in excess of $800 million. OSBF fees were .65% of net assets annually. Fees were allocated ratably to each Fund based on the relative value of Fund net assets to total Trust net assets as of the close of business each day. The Manager agreed to reimburse OMF, OHIF, OBF, OCAP, OGF, OMSF and OSBF if aggregate Fund expenses (with specified exceptions) exceeded 2% of the first $10 million of average annual net assets, 1.50% of the next $20 million and 1% of average annual net assets in excess of $30 million. Prior to September 1, 1994, the Manager and Monarch Life Insurance Company, Bankers Security Life Insurance Society (Bankers), Confederation Life Insurance and Annuity Company and Massachusetts Mutual Life Insurance Company had also voluntarily undertaken to limit the expenses of OMF, OHIF, OBF, OCAP, OGF and OMSF to .75% of average annual net assets, after any other reimbursement by the Manager. The reimbursement was based on the proportionate number of shares in the accounts of the respective insurance companies. The undertaking by Bankers extended to OMSF only. Investment Adviser Oppenheimer Management Corporation Two World Trade Center New York, New York 10048-0203 Transfer Agent Oppenheimer Shareholder Services P.O. Box 5270 Denver, Colorado 80217 1-800-525-7048 Custodian The Bank of New York One Wall Street New York, New York 10015 Independent Auditors Deloitte & Touche LLP 1560 Broadway Denver, Colorado 80202 Legal Counsel Myer, Swanson, Adams & Wolf, P.C. 1600 Broadway Denver, Colorado 80202-4918 -----END PRIVACY-ENHANCED MESSAGE-----