-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N4WPq4aJxtlk625ve7qpEuxv0eWik/247ld2d4Z5MNMfkhEkbqUUjOqIgP+Ekrtf R9QFUwFDuaQqM+MdT6O58A== 0001086144-00-000017.txt : 20000307 0001086144-00-000017.hdr.sgml : 20000307 ACCESSION NUMBER: 0001086144-00-000017 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000303 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: N-30D SEC ACT: SEC FILE NUMBER: 811-04108 FILM NUMBER: 560246 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 N-30D 1 GLOBAL SECURITIES FUND/VA Annual Report December 31, 1999 ================================================================================ Oppenheimer Global Securities Fund/VA A Series of Oppenheimer Variable Account Funds [Logo] OppenheimerFunds(R) The Right Way to Invest - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- ================================================================================ Objective Oppenheimer Global Securities Fund/VA, a series of Oppenheimer Variable Account Funds, seeks long-term capital appreciation by investing a substantial portion of assets in common stocks of U.S. and foreign companies. ================================================================================ Narrative by William Wilby, Portfolio Manager We are very pleased with the Fund's performance over the fiscal year that ended December 31, 1999. The Fund's average annual total return for the one-year period was 58.48%.(1) We attribute the Fund's excellent performance during the reporting period to our disciplined stock selection strategy. By identifying trends--such as technological change and restructuring--that are propelling global growth, we have been able to take advantage of strong, individual companies that have played important roles in enabling this growth. In addition, the global financial markets rebounded quickly and dramatically after 1998's declines. In large part, the markets' recovery was the result of actions taken by central banks worldwide as the crisis unfolded last year. The recovery was also enhanced by an increase in corporate earnings. Certain key sectors of the global markets, including the energy and semiconductor industries, began to recover after experiencing recession-like conditions for several years. Higher oil prices and robust demand for microchips helped fuel a rebound in those sectors, which positively influenced the entire marketplace. The Asian markets rebounded strongly in early 1999 as the fear of depression eased and economies stabilized. Within Asia, Japan's stock market has had a particularly good year, driven by the widespread belief that the Japanese economy has stabilized. The advance of European markets paused during the first several months of 1999 as the region adjusted to a new currency, the euro, which remains weak relative to the U.S. dollar. In the United States, stocks as a whole have performed very well, with the greatest returns coming from technology and economically sensitive businesses such as oil companies and other manufacturers of basic materials. Throughout the reporting period, we generally maintained our focus on companies based in Europe and the United States. It is important to note, however, that this strategy was not so much a reaction to broad economic or market trends as it was a result of our disciplined, bottom-up stock selection strategy. We choose investments one company at a time by evaluating their prospects in the context of long-term growth trends. The Fund's largest investment position, QUALCOMM, Inc., provided outstanding returns during the period. This U.S. telecommunications company recently set a new standard for software that runs cellular telephone communications. This new--and, in our opinion, superior--standard was adopted by many competing cellular telephone equipment manufacturers.(2) U.S. technology company National Semiconductor Corp. also provided very good returns over the past year as the entire semiconductors sector recovered from a period of relatively lackluster growth. Driven by greater demand for microprocessors, National Semiconductor was a prime beneficiary of this recovery. In addition, the company's stock price rallied when it sold an under-performing division in order to focus on its more profitable niche businesses. 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this Fund. Such performance would have been lower if such charges were taken into account. This performance was achieved in part during periods of rapidly rising markets, and there is no assurance that the Fund will continue to achieve those gains in the future. 2. The Fund's portfolio is subject to change. 2 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- ================================================================================ With regard to our outlook over the coming months, we currently see little reason for global stock markets to either rise or fall substantially from current levels. On one hand, most global economies are either stable or growing, and we see little likelihood of an economic collapse in any major markets. On the other hand, valuations of many growth companies remain quite high, which should help prevent markets from rising much further. As a result, we continue to believe that the greatest returns are likely to be achieved by focusing on individual companies rather than overall markets. Fortunately, we have had no trouble identifying growth companies that we believe will benefit from our long-term global growth themes: Mass Affluence, New Technologies, Restructuring and Aging. Adhering to these long-term investment themes and focusing on the companies that we believe will benefit are what makes Oppenheimer Global Securities Fund/VA an important part of The Right Way to Invest. - -------------------------------------------------------------------------------- Management's discussion of performance. During the Fund's fiscal year that ended December 31, 1999, Oppenheimer Global Securities Fund/VA provided very good performance. Returns were generally attractive over the past year as stocks worldwide recovered from last year's global credit and currency crisis. The Fund benefited from its stock selection strategy, including a number of investments in the technology, telecommunications and consumer durables market sectors. However, the Fund's performance was constrained by its asset allocation strategy, which focused more on U.S. and European markets than on the better performing markets in Japan and other Asian nations. Overall, the Fund's managers continued to adhere to their longstanding strategy of identifying out-of-favor growth companies most likely to benefit from four distinct long-term investment themes. The Fund's portfolio holdings, allocations and strategies are subject to change. Oppenheimer Global Securities Fund/VA 3 - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Comparing the Fund's performance to the market. The graph that follows shows the performance of a hypothetical $10,000 investment in the Fund held until December 31, 1999. Performance information does not reflect charges that apply to separate accounts investing in the Fund. If these charges were taken into account, performance would be lower. The graph assumes that all dividends and capital gains distributions were reinvested in additional shares. The Fund's performance is compared to the performance of the Morgan Stanley Capital International (MSCI) World Index, an unmanaged index of issuers listed on the stock exchanges of 20 foreign countries and the United States. It is widely recognized as a measure of global stock market performance. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs that follow shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. [Chart] Comparison of Change in Value of $10,000 Hypothetical Investments in: OVAF/Oppenheimer Global Securities Fund/VA and Morgan Stanley Capital International World Index OVAF/Oppenheimer Global Morgan Stanley Capital Securities Fund/VA International World Index 11.12.90 10000 10000 12.31.90 10040 10046 12.31.91 10380 11951 12.31.92 9642 11394 12.31.93 16424 14029 12.31.94 15483 14812 12.31.95 15830 17970 12.31.96 18648 20485 12.31.97 22829 23809 12.31.98 26050 29713 12.31.99 41283 37242 Average Annual Total Return of the Fund at 12/31/99 1-Year 58.48% 5-Year 21.67% Life 16.79% [End Chart] Because the stock market can be volatile, the Fund's performance may be subject to substantial short-term changes. For updates on the Fund's performance, please call us at 1.800.981.2871. The performance information in the graph for the MSCI World Index begins on 10/31/90. The inception date of the Fund was 11/12/90. Total returns and the ending account value in the graph show change in share value and include reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. 4 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Statement of Investments December 31, 1999 - --------------------------------------------------------------------------------
Market Value Shares Note 1 ======================================================================================= Common Stocks--89.1% Basic Materials--1.1% - --------------------------------------------------------------------------------------- Chemicals--1.1% - --------------------------------------------------------------------------------------- International Flavors & Fragrances, Inc. 501,200 $ 18,920,300 - --------------------------------------------------------------------------------------- Capital Goods--7.8% - --------------------------------------------------------------------------------------- Electrical Equipment--1.5% Toshiba Corp. 3,388,000 25,849,946 - --------------------------------------------------------------------------------------- Industrial Services--3.8% Manpower, Inc. 437,800 16,472,225 - --------------------------------------------------------------------------------------- Rentokil Initial plc 3,216,300 11,729,826 - --------------------------------------------------------------------------------------- WPP Group plc 2,459,500 38,978,317 ------------ 67,180,368 - --------------------------------------------------------------------------------------- Manufacturing--2.5% Bombardier, Inc., Cl. B 787,500 16,133,058 - --------------------------------------------------------------------------------------- Sidel SA 123,700 12,760,393 - --------------------------------------------------------------------------------------- Societe BIC SA 319,437 14,524,525 ------------ 43,417,976 - --------------------------------------------------------------------------------------- Communication Services--6.8% - --------------------------------------------------------------------------------------- Telecommunications: Long Distance--0.6% MCI WorldCom, Inc.(1) 200,700 10,649,644 - --------------------------------------------------------------------------------------- Telephone Utilities--2.7% DDI Corp.(1) 600 8,216,766 - --------------------------------------------------------------------------------------- Hellenic Telecommunication Organization SA 182,118 4,327,815 - --------------------------------------------------------------------------------------- Portugal Telecom SA 719,000 7,880,019 - --------------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA (Telemar), Preference 791,770,000 21,257,041 - --------------------------------------------------------------------------------------- Telstra Corp. Ltd. 1,245,400 6,774,926 ------------ 48,456,567 - --------------------------------------------------------------------------------------- Telecommunications: Wireless--3.5% NTT Mobile Communications Network, Inc. 636 24,449,574 - --------------------------------------------------------------------------------------- Telecel-Comunicacoes Pessoais, S.A. 501,400 8,734,778 - --------------------------------------------------------------------------------------- Telecom Italia Mobile SpA 2,294,400 25,607,736 - --------------------------------------------------------------------------------------- Telesp Celular Participacoes SA, ADR 79,100 3,351,862 ------------ 62,143,950 - --------------------------------------------------------------------------------------- Consumer Cyclicals--9.9% - --------------------------------------------------------------------------------------- Autos & Housing--5.9% Autoliv, Inc., SDR 301,600 8,824,205 - --------------------------------------------------------------------------------------- General Motors Corp. 205,300 14,922,744 - --------------------------------------------------------------------------------------- Hanson plc 1,608,400 13,485,550 - --------------------------------------------------------------------------------------- IRSA Inversiones y Representaciones SA 1,816,959 5,887,536 - --------------------------------------------------------------------------------------- Porsche AG, Preference 16,600 43,770,336 - --------------------------------------------------------------------------------------- Volkswagen AG 295,500 16,585,502 ------------ 103,475,873
Oppenheimer Global Securities Fund/VA 5 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - --------------------------------------------------------------------------------------- Leisure & Entertainment--1.2% Hasbro, Inc. 478,200 $ 9,115,687 - --------------------------------------------------------------------------------------- International Game Technology 558,400 11,342,500 ------------ 20,458,187 - --------------------------------------------------------------------------------------- Media--1.1% Reed International plc 1,599,200 11,974,566 - --------------------------------------------------------------------------------------- Singapore Press Holdings Ltd. 364,000 7,889,763 ------------ 19,864,329 - --------------------------------------------------------------------------------------- Retail: Specialty--1.7% Circuit City Stores-Circuit City Group 274,000 12,347,125 - --------------------------------------------------------------------------------------- Dixons Group plc 739,194 17,781,172 ------------ 30,128,297 - --------------------------------------------------------------------------------------- Consumer Staples--10.5% - --------------------------------------------------------------------------------------- Beverages--0.7% Cadbury Schweppes plc 2,036,400 12,303,876 - --------------------------------------------------------------------------------------- Broadcasting--7.4% Canal Plus 282,404 41,068,533 - --------------------------------------------------------------------------------------- Grupo Televisa SA, Sponsored GDR(1) 424,300 28,958,475 - --------------------------------------------------------------------------------------- ProSieben Media AG, Preference 235,948 13,416,377 - --------------------------------------------------------------------------------------- Television Broadcasts Ltd. 1,569,000 10,697,498 - --------------------------------------------------------------------------------------- Television Francaise 1 56,075 29,345,609 - --------------------------------------------------------------------------------------- Telewest Communications plc(1) 1,291,058 6,888,043 ------------ 130,374,535 - --------------------------------------------------------------------------------------- Entertainment--0.9% Disney (Walt) Co. 219,700 6,426,225 - --------------------------------------------------------------------------------------- Nintendo Co. Ltd. 54,000 8,969,187 ------------ 15,395,412 - --------------------------------------------------------------------------------------- Food & Drug Retailers--0.4% Dairy Farm International Holdings Ltd. 8,172,194 7,354,975 - --------------------------------------------------------------------------------------- Household Goods--1.1% Wella AG, Preference 910,700 19,980,315 - --------------------------------------------------------------------------------------- Energy--0.4% - --------------------------------------------------------------------------------------- Oil: International--0.4% BP Amoco plc, ADR 107,288 6,363,519 - --------------------------------------------------------------------------------------- Financial--9.1% - --------------------------------------------------------------------------------------- Banks--1.5% Australia & New Zealand Banking Group Ltd. 1,958,600 14,259,033 - --------------------------------------------------------------------------------------- Royal Bank of Scotland Group (The) plc 340,000 6,009,018 - --------------------------------------------------------------------------------------- UniCredito Italiano SpA 1,303,100 6,399,824 ------------ 26,667,875
6 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - --------------------------------------------------------------------------------------- Diversified Financial--5.1% American Express Co. 99,000 $ 16,458,750 - --------------------------------------------------------------------------------------- Associates First Capital Corp., Cl. A 139,700 3,833,019 - --------------------------------------------------------------------------------------- Citigroup, Inc. 295,700 16,429,831 - --------------------------------------------------------------------------------------- Credit Saison Co. Ltd. 390,000 6,790,570 - --------------------------------------------------------------------------------------- Fannie Mae 190,000 11,863,125 - --------------------------------------------------------------------------------------- Housing Development Finance Corp. Ltd. 222,900 1,463,821 - --------------------------------------------------------------------------------------- ICICI Ltd., Sponsored ADR(1) 1,008,700 14,615,825 - --------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc. 226,000 19,139,375 ------------ 90,594,316 - --------------------------------------------------------------------------------------- Insurance--2.5% - --------------------------------------------------------------------------------------- AEGON NV 143,400 13,840,069 - --------------------------------------------------------------------------------------- Allied Zurich plc 1,048,600 12,357,835 - --------------------------------------------------------------------------------------- American International Group, Inc. 56,937 6,156,313 - --------------------------------------------------------------------------------------- AXA SA 87,300 12,159,643 ------------ 44,513,860 - --------------------------------------------------------------------------------------- Healthcare--12.3% - --------------------------------------------------------------------------------------- Healthcare/Drugs--10.0% ALZA Corp., Cl. A(1) 419,900 14,539,037 - --------------------------------------------------------------------------------------- Amgen, Inc.(1) 294,200 17,670,387 - --------------------------------------------------------------------------------------- Eisai Co. Ltd. 704,000 13,531,840 - --------------------------------------------------------------------------------------- Elan Corp. plc, ADR(1) 614,800 18,136,600 - --------------------------------------------------------------------------------------- Fresenius AG, Preference 142,419 26,086,140 - --------------------------------------------------------------------------------------- Genset, Sponsored ADR(1) 938,600 17,892,062 - --------------------------------------------------------------------------------------- Genzyme Corp. (General Division)(1) 177,400 7,983,000 - --------------------------------------------------------------------------------------- Gilead Sciences, Inc.(1) 172,700 9,347,387 - --------------------------------------------------------------------------------------- Glaxo Wellcome plc, Sponsored ADR 154,800 8,649,450 - --------------------------------------------------------------------------------------- Millennium Pharmaceuticals, Inc.(1) 207,800 25,351,600 - --------------------------------------------------------------------------------------- Pliva d.d., Sponsored GDR(2) 810,300 10,574,415 - --------------------------------------------------------------------------------------- Taisho Pharmaceutical Co. 210,000 6,162,575 ------------ 175,924,493 - --------------------------------------------------------------------------------------- Healthcare/Supplies & Services--2.3% Affymetrix, Inc.(1) 135,300 22,958,719 - --------------------------------------------------------------------------------------- Bard (C.R.), Inc. 178,400 9,455,200 - --------------------------------------------------------------------------------------- Quintiles Transnational Corp.(1) 458,900 8,575,694 ------------ 40,989,613 - --------------------------------------------------------------------------------------- Technology--30.7% - --------------------------------------------------------------------------------------- Computer Hardware--2.9% International Business Machines Corp. 145,800 15,746,400 - --------------------------------------------------------------------------------------- Sun Microsystems, Inc.(1) 447,200 34,630,050 ------------ 50,376,450
Oppenheimer Global Securities Fund/VA 7 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------------ Computer Services--4.0% Cap Gemini SA 115,600 $ 29,317,631 - ------------------------------------------------------------------------------------------------------------------------ Getronics NV 514,000 40,969,324 -------------- 70,286,955 - ------------------------------------------------------------------------------------------------------------------------ Computer Software--5.8% Cadence Design Systems, Inc.(1) 1,572,600 37,742,400 - ------------------------------------------------------------------------------------------------------------------------ Lernout & Hauspie Speech Products NV(1) 289,800 13,403,250 - ------------------------------------------------------------------------------------------------------------------------ Oracle Corp.(1) 339,000 37,989,187 - ------------------------------------------------------------------------------------------------------------------------ Sybase, Inc.(1) 345,900 5,880,300 - ------------------------------------------------------------------------------------------------------------------------ Synopsys, Inc.(1) 110,700 7,389,225 -------------- 102,404,362 - ------------------------------------------------------------------------------------------------------------------------ Communications Equipment--11.1% Alcatel 133,100 30,541,010 - ------------------------------------------------------------------------------------------------------------------------ Cisco Systems, Inc.(1) 161,350 17,284,619 - ------------------------------------------------------------------------------------------------------------------------ L.M. Ericsson Telephone Co., Cl. B, ADR 596,400 39,176,025 - ------------------------------------------------------------------------------------------------------------------------ Nokia Corp., A Shares, Sponsored ADR(1) 95,900 18,221,000 - ------------------------------------------------------------------------------------------------------------------------ QUALCOMM, Inc.(1) 385,100 67,825,737 - ------------------------------------------------------------------------------------------------------------------------ Scientific-Atlanta, Inc. 402,100 22,366,813 -------------- 195,415,204 - ------------------------------------------------------------------------------------------------------------------------ Electronics--6.9% Hoya Corp. 83,000 6,535,753 - ------------------------------------------------------------------------------------------------------------------------ Koninklijke (Royal) Philips Electronics NV 216,600 29,428,134 - ------------------------------------------------------------------------------------------------------------------------ National Semiconductor Corp.(1) 1,167,400 49,979,313 - ------------------------------------------------------------------------------------------------------------------------ STMicroelectronics NV, NY Registered Shares 229,800 34,800,338 -------------- 120,743,538 - ------------------------------------------------------------------------------------------------------------------------ Transportation--0.5% - ------------------------------------------------------------------------------------------------------------------------ Shipping--0.5% Peninsular & Oriental Steam Navigation Co. 575,100 9,597,341 - ------------------------------------------------------------------------------------------------------------------------ Total Common Stocks (Cost $1,026,351,138) 1,569,832,076 Principal Amount - ------------------------------------------------------------------------------------------------------------------------ Repurchase Agreements--8.3% - ------------------------------------------------------------------------------------------------------------------------ Repurchase agreement with Banc One Capital Markets, Inc., 2.75%, dated 12/31/99, to be repurchased at $145,933,435 on 1/3/00, collateralized by U.S. Treasury Bonds, 5.25%-12%, 2/15/01-11/15/28, with a value of $57,264,247 and U.S. Treasury Nts., 5%-7.50%, 12/31/00-2/15/07, with a value of $91,638,429 (Cost $145,900,000) $ 145,900,000 145,900,000 - ------------------------------------------------------------------------------------------------------------------------ Total Investments, at Value (Cost $1,172,251,138) 97.4% 1,715,732,076 - ------------------------------------------------------------------------------------------------------------------------ Other Assets Net of Liabilities 2.6 46,634,376 -------------- -------------- Net Assets 100.0% $1,762,366,452 ============== ==============
8 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Distribution of investments representing geographic diversification, as a percentage of total investments at value, is as follows:
Geographic Diversification Market Value Percent - --------------------------------------------------------------------------------------- United States $ 736,854,433 42.8% - --------------------------------------------------------------------------------------- France 222,409,744 13.0 - --------------------------------------------------------------------------------------- Great Britain 156,118,512 9.1 - --------------------------------------------------------------------------------------- Germany 119,838,669 7.0 - --------------------------------------------------------------------------------------- Japan 100,506,211 5.9 - --------------------------------------------------------------------------------------- The Netherlands 84,237,526 4.9 - --------------------------------------------------------------------------------------- Sweden 48,000,230 2.8 - --------------------------------------------------------------------------------------- Italy 32,007,560 1.9 - --------------------------------------------------------------------------------------- Mexico 28,958,475 1.7 - --------------------------------------------------------------------------------------- Brazil 24,608,904 1.4 - --------------------------------------------------------------------------------------- Australia 21,033,959 1.2 - --------------------------------------------------------------------------------------- Finland 18,221,000 1.1 - --------------------------------------------------------------------------------------- Ireland 18,136,600 1.1 - --------------------------------------------------------------------------------------- Portugal 16,614,798 1.0 - --------------------------------------------------------------------------------------- Canada 16,133,058 0.9 - --------------------------------------------------------------------------------------- Singapore 15,244,737 0.9 - --------------------------------------------------------------------------------------- Belgium 13,403,250 0.8 - --------------------------------------------------------------------------------------- India 11,917,146 0.7 - --------------------------------------------------------------------------------------- Hong Kong 10,697,498 0.6 - --------------------------------------------------------------------------------------- Croatia 10,574,415 0.6 - --------------------------------------------------------------------------------------- Argentina 5,887,536 0.3 - --------------------------------------------------------------------------------------- Greece 4,327,815 0.3 -------------- ----- Total $1,715,732,076 100.0% ============== =====
1. Non-income producing security. 2. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $10,574,415 or 0.60% of the Fund's net assets as of December 31, 1999. See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 9 - -------------------------------------------------------------------------------- Statement of Assets and Liabilities December 31, 1999 - -------------------------------------------------------------------------------- ================================================================================================ Assets Investments, at value (cost $1,172,251,138)--see accompanying statement $1,715,732,076 - ------------------------------------------------------------------------------------------------ Cash 1,077,591 - ------------------------------------------------------------------------------------------------ Unrealized appreciation on foreign currency exchange contracts 7,046 - ------------------------------------------------------------------------------------------------ Receivables and other assets: Investments sold 53,869,505 Shares of beneficial interest sold 1,265,029 Interest, dividends 1,158,012 Other 11,481 -------------- Total assets 1,773,120,740 ================================================================================================ Liabilities Unrealized depreciation on foreign currency exchange contracts 7,821 - ------------------------------------------------------------------------------------------------ Payables and other liabilities: Investments purchased 9,066,120 Shares of beneficial interest redeemed 1,537,479 Trustees' compensation 1,967 Transfer and shareholder servicing agent fees 184 Other 140,717 -------------- Total liabilities 10,754,288 ================================================================================================ Net Assets $1,762,366,452 ============== ================================================================================================ Composition of Net Assets Paid-in capital $ 924,735,645 - ------------------------------------------------------------------------------------------------ Overdistributed net investment income (567,744) - ------------------------------------------------------------------------------------------------ Accumulated net realized gain on investments and foreign currency transactions 294,753,467 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 543,445,084 -------------- Net assets--applicable to 52,745,360 shares of beneficial interest outstanding $1,762,366,452 ============== ================================================================================================ Net Asset Value, Redemption Price Per Share and Offering Price Per Share $33.41
See accompanying Notes to Financial Statements. 10 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Statement of Operations For the Year Ended December 31, 1999 - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- Investment Income Dividends (net of foreign withholding taxes of $712,662) $ 13,352,150 - ---------------------------------------------------------------------------------------------- Interest 2,466,093 ------------ Total income 15,818,243 ============================================================================================== Expenses Management fees 8,336,850 - ---------------------------------------------------------------------------------------------- Custodian fees and expenses 270,778 - ---------------------------------------------------------------------------------------------- Trustees' compensation 11,193 - ---------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 2,104 - ---------------------------------------------------------------------------------------------- Other 43,962 ------------ Total expenses 8,664,887 Less expenses paid indirectly (6,321) ------------ Net expenses 8,658,566 ============================================================================================== Net Investment Income 7,159,677 ============================================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments 320,164,650 Foreign currency transactions (29,286,569) ------------ Net realized gain 290,878,081 - ---------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on: Investments 363,894,982 Translation of assets and liabilities denominated in foreign currencies (23,520,911) ------------ Net change 340,374,071 ------------ Net realized and unrealized gain 631,252,152 ============================================================================================== Net Increase in Net Assets Resulting from Operations $638,411,829 ============
See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 11 - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Year Ended December 31, 1999 1998 =============================================================================================================== Operations Net investment income $ 7,159,677 $ 12,887,134 - --------------------------------------------------------------------------------------------------------------- Net realized gain 290,878,081 36,962,992 - --------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 340,374,071 86,460,026 -------------- -------------- Net increase in net assets resulting from operations 638,411,829 136,310,152 =============================================================================================================== Dividends and/or Distributions to Shareholders Dividends from net investment income (7,159,677) (21,307,082) - --------------------------------------------------------------------------------------------------------------- Dividends in excess of net investment income (6,137,505) -- - --------------------------------------------------------------------------------------------------------------- Distributions from net realized gain (37,262,160) (80,203,951) =============================================================================================================== Beneficial Interest Transactions Net increase in net assets resulting from beneficial interest transactions 39,484,831 141,119,795 =============================================================================================================== Net Assets Total increase 627,337,318 175,918,914 - --------------------------------------------------------------------------------------------------------------- Beginning of period 1,135,029,134 959,110,220 -------------- -------------- End of period [including undistributed (overdistributed) net investment income of $(567,744) and $11,592,206, respectively] $1,762,366,452 $1,135,029,134 ============== ==============
See accompanying Notes to Financial Statements. 12 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Financial Highlights - --------------------------------------------------------------------------------
Year Ended December 31, 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $22.07 $21.37 $17.67 $15.00 $15.09 - --------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income .14 .24 .25 .15 .12 Net realized and unrealized gain 12.21 2.64 3.68 2.52 .19 - --------------------------------------------------------------------------------------------------------------------- Total income from investment operations 12.35 2.88 3.93 2.67 .31 - --------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.14) (.46) (.23) -- -- Dividends in excess of net investment income (.13) -- -- -- -- Distributions from net realized gain (.74) (1.72) -- -- (.40) - --------------------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.01) (2.18) (.23) -- (.40) - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $33.41 $22.07 $21.37 $17.67 $15.00 ====== ====== ====== ====== ====== ===================================================================================================================== Total Return, at Net Asset Value(1) 58.48% 14.11% 22.42% 17.80% 2.24% ===================================================================================================================== Ratios/Supplemental Data Net assets, end of period (in millions) $1,762 $1,135 $959 $582 $361 - --------------------------------------------------------------------------------------------------------------------- Average net assets (in millions) $1,251 $1,055 $802 $467 $332 - --------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(2) Net investment income 0.57% 1.22% 1.51% 1.09% 0.86% Expenses 0.69% 0.74%(3) 0.76%(3) 0.81%(3) 0.89%(3) - --------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(4) 64% 81% 67% 90% 131%
1. Assumes a $1,000 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 returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. Annualized for periods less than one full year. 3. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 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. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1999, were $772,038,559 and $956,384,357, respectively. See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 13 - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies Oppenheimer Global Securities Fund/VA (the Fund) is a 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 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 that are considered to have appreciation possibilities. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- Securities Valuation. Portfolio securities are valued at the close of the New York Stock Exchange 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 the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by an 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 are valued under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term "money market type" 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. Foreign currency exchange contracts are valued based on the closing prices of the foreign currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. 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 price 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 is used. - -------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign 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 the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires 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 Fund may be delayed or limited. - -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers to shareholders. - -------------------------------------------------------------------------------- Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. 14 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its 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 fiscal year in which the income or realized gain was recorded by the Fund. The Fund adjusts the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, during the year ended December 31, 1999, amounts have been reclassified to reflect a decrease in paid-in capital of $6,653, a decrease in undistributed net investment income of $6,022,445, and an increase in accumulated net realized gain on investments of $6,029,098. - -------------------------------------------------------------------------------- Expense Offset Arrangements. Expenses paid indirectly represent a reduction of custodian fees for earnings on cash balances maintained by the Fund. - -------------------------------------------------------------------------------- Other. Investment transactions are accounted for as of trade date and dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. 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. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. ================================================================================ 2. Shares of Beneficial Interest The Fund has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
Year Ended December 31, 1999 Year Ended December 31, 1998 ----------------------------- ----------------------------- Shares Amount Shares Amount - ------------------------------------------------------------------------------------------------------------- Sold 14,212,563 $ 365,308,523 11,735,029 $ 248,354,528 Dividends and distributions reinvested 2,349,412 50,559,342 4,877,993 101,511,033 Redeemed (15,245,808) (376,383,034) (10,067,775) (208,745,766) ----------- ------------- ----------- ------------- Net increase 1,316,167 $ 39,484,831 6,545,247 $ 141,119,795 =========== ============= =========== =============
================================================================================ 3. Unrealized Gains and Losses on Securities As of December 31, 1999, net unrealized appreciation on securities of $543,480,938 was composed of gross appreciation of $590,197,031, and gross depreciation of $46,716,093. Oppenheimer Global Securities Fund/VA 15 - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- ================================================================================ 4. Management Fees and Other Transactions with Affiliates Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.75% of the first $200 million of average annual 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 average annual net assets over $800 million. The Fund's management fee for the year ended December 31, 1999 was 0.67% of average annual net assets. ================================================================================ Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, is the transfer agent for the Fund and is responsible for maintaining the shareholder registry and shareholder accounting records for the Fund. OFS provides these services for cost. ================================================================================ 5. Foreign Currency Contracts A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts for operational purposes and to seek to protect against adverse exchange rate fluctuations. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. Securities denominated in foreign currency to cover net exposure on outstanding foreign currency contracts are noted in the Statement of Investments where applicable. As of December 31, 1999, the Fund had outstanding foreign currency contracts as follows:
Expiration Contract Valuation as of Unrealized Unrealized Contract Description Dates Amounts (000s) December 31, 1999 Appreciation Depreciation - ------------------------------------------------------------------------------------------------------------------- Contracts to Purchase - --------------------- British Pound Sterling (GBP) 1/3/00 164 GBP $ 264,200 $ 554 $ -- British Pound Sterling (GBP) 1/3/00 285 GBP 461,002 -- 860 Euro (EUR) 1/3/00 209 EUR 210,398 538 -- Japanese Yen (JPY) 1/3/00 163,044 JPY 1,596,537 3,186 -- Japanese Yen (JPY) 1/3/00 9,642 JPY 94,379 -- 202 ------ ------ 4,278 1,062 ------ ------ Contracts to Sell - ----------------- British Pound Sterling (GBP) 1/3/00 2,135 GBP 3,449,810 2,768 -- Euro (EUR) 1/3/00 2,933 EUR 2,959,230 -- 6,759 ------ ------ 2,768 6,759 ------ ------ Total Unrealized Appreciation and Depreciation $7,046 $7,821 ====== ======
16 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Independent Auditors' Report - -------------------------------------------------------------------------------- ================================================================================ To the Board of Trustees and Shareholders of Oppenheimer Global Securities Fund/VA: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Oppenheimer Global Securities Fund/VA (which is a series of Oppenheimer Variable Account Funds) as of December 31, 1999, the related statement of operations for the year then ended, the statements of changes in net assets for the years ended December 31, 1999 and 1998 and the financial highlights for the period January 1, 1995 to December 31, 1999. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1999, 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 Global Securities Fund/VA as of December 31, 1999, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. Deloitte & Touche LLP Denver, Colorado January 24, 2000 Oppenheimer Global Securities Fund/VA 17 - -------------------------------------------------------------------------------- Federal Income Tax Information (Unaudited) - -------------------------------------------------------------------------------- ================================================================================ In early 2000 shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 1999. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Distributions of $1.0095 per share were paid to shareholders on March 22, 1999, of which $0.4700 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets held for more than one year (long-term capital gains). Dividends paid by the Fund during the fiscal year ended December 31, 1999 which are not designated as capital gain distributions should be multiplied by 1.98% to arrive at the net amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 18 Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- A Series of Oppenheimer Variable Account Funds ======================================================================================= Officers and Trustees James C. Swain, Trustee and Chairman of the Board Bridget A. Macaskill, President William H. Armstrong, Trustee Robert G. Avis, Trustee William A. Baker, Trustee Edward L. Cameron, Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee William L. Wilby, Vice President Andrew J. Donohue, Vice President and Secretary Brian W. Wixted, Treasurer Robert G. Zack, Assistant Secretary Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer ======================================================================================= Investment Advisor OppenheimerFunds, Inc. ======================================================================================= Transfer Agent OppenheimerFunds Services ======================================================================================= Custodian of Portfolio Securities The Bank of New York ======================================================================================= Independent Auditors Deloitte & Touche LLP ======================================================================================= Legal Counsel Myer, Swanson, Adams & Wolf, P.C. This is a copy of a report to shareholders of Oppenheimer Global Securities Fund/VA. This report must be preceded or accompanied by a Prospectus of Oppenheimer Global Securities Fund/VA. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
Oppenheimer Global Securities Fund/VA 19 -----END PRIVACY-ENHANCED MESSAGE-----