-----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, GP2aDeIbOTqijSo4KltiOY/UGyl3mRdVQHDfEbZO+5l2etcFYBrcNRsrNUHzgvBX 8ZgkJ3RyiNQDmjLDQBeGRg== 0001086144-99-000043.txt : 19990820 0001086144-99-000043.hdr.sgml : 19990820 ACCESSION NUMBER: 0001086144-99-000043 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990819 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: 99695737 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 SAR Semiannual Report June 30, 1999 O P P E N H E I M E R Global Securities Fund/VA A Series of Oppenheimer Variable Account Funds [graphic of globe] [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 from growth companies worldwide. - -------------------------------------------------------------------------------- Narrative by William Wilby, Portfolio Manager Oppenheimer Global Securities Fund/VA performed reasonably well over the six-month period that ended June 30, 1999, considering our emphasis on Europe, which represented a substantial percentage of our portfolio. The Fund's cumulative total return for the six-month period was 13.80%.(1) Over the recent six-month period, European economic statistics showed a slowdown in the industrial sector, which caused some investors to lose confidence in the region's potential for growth. We believed, however, that these statistics were inconclusive, as they failed to reflect income growth in Europe's robust consumer sector. The region also faced difficulties with the launch of the euro, partly because of this lack of confidence in European growth, and partly because of negative reaction to the economic policies of the new German government and its finance minister, Oskar Lafontaine. However, disagreements over policy led to Lafontaine's resignation in March 1999, which shifted the balance in German politics back toward the center. As a result, investor confidence began to rebound. Despite these difficulties, we continued to view Europe as the most attractive of international investment arenas during the period. From a macroeconomic perspective, expanding economic links and shrinking trade barriers among European nations have facilitated corporate growth. At the same time, Germany's move back toward the political center and the European central bank's apparent independence from national politics have improved investor confidence and created a more favorable market environment. Additionally, several European companies have established positions of global leadership in important areas of technology. Others have undergone U.S.-style corporate restructuring to sharpen their competitive edge. The work force is very well educated, and the region's relatively wealthy, aging population has created growing demand in the healthcare and financial sectors. All these factors have opened a wide range of opportunities for European companies, especially those benefiting from technology leadership or effective internal restructuring, as well as those positioned to benefit from the continent's changing demographics. Although Asian markets recovered substantially during the period from their mid-1998 lows, the region continued to face considerable economic difficulties. Massive debt, low levels of corporate profitability and Japan's lingering recession led us to cap our Asian exposure at less than 10% of the portfolio. On the other hand, Latin America offered a somewhat more hospitable investment environment during the period. The region's markets performed well, despite a decline in January precipitated by a currency devaluation in Brazil, the region's largest economy. Although we believe Brazil's economy must undergo additional fundamental reforms, many Brazilian companies feature solid management teams and desirable products. In addition, while other Latin American markets were negatively affected by Brazil's problems, many of the region's economies remained fundamentally sound. Clearly and by far, U.S. stocks led the financial markets over the first six months of 1999, as they have for the past several years. That's because investors continued to flock to the stocks of large, well-established companies with dominant positions and histories of consistent earnings. With regard to our strategy for managing the Fund, we focused on our four investment theme areas, which include Mass Affluence, New Technologies, Restructuring and Aging. In the technology sector, we took advantage of foreign leadership in the areas of cellular telephony and digital media. In addition to our holdings among various cellular service providers, the Fund benefited from investments in the leading British and European satellite networks.(2) 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 contact your financial advisor, call us at 1-800-525-7048 or visit our website, www.oppenheimerfunds.com. 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 is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. 2 Oppenheimer Global Securities Fund/VA Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA - -------------------------------------------------------------------------------- We also invested in several companies that we believe stand to gain from effective internal restructuring. One such British company has refashioned itself from a broadly based conglomerate into a tightly focused, well-managed provider of high-end security and fire protection services. Since the company is still perceived as a conglomerate by most fund managers, its stock has traded at a bargain price compared to those of its competitors. Looking ahead, our view of the world's markets remains largely unchanged: generally negative with regard to Asia, cautious with regard to Latin America, and positive with regard to Europe. We also believe that the U.S. economy remains fundamentally strong. In our opinion, the Fund is well positioned to benefit from global growth. We remain dedicated to our disciplined approach of participating in that growth while striving to cushion the effects of global volatility. That's what makes Oppenheimer Global Securities Fund/VA part of The Right Way to Invest. Oppenheimer Global Securities Fund/VA 3 Statement of Investments June 30, 1999 (Unaudited)
Market Value Shares Note 1 ================================================================================================================================ Common Stocks--99.1% ================================================================================================================================ Basic Materials--1.9% - -------------------------------------------------------------------------------------------------------------------------------- Chemicals--1.8% International Flavors & Fragrances, Inc. 389,300 $17,275,187 - -------------------------------------------------------------------------------------------------------------------------------- Minerals Technologies, Inc. 100,000 5,581,250 ------------- 22,856,437 - -------------------------------------------------------------------------------------------------------------------------------- Metals--0.1% Cia de Minas Buenaventura SA, Sponsored ADR, B Shares 46,000 704,375 ================================================================================================================================ Capital Goods--9.5% - -------------------------------------------------------------------------------------------------------------------------------- Aerospace/Defense--0.7% Rolls-Royce plc 1,932,738 8,180,054 - -------------------------------------------------------------------------------------------------------------------------------- Industrial Services--5.8% Adecco SA(1) 14,303 7,664,019 - -------------------------------------------------------------------------------------------------------------------------------- Allied Waste Industries, Inc.(1) 648,600 12,809,850 - -------------------------------------------------------------------------------------------------------------------------------- Rentokil Initial plc 2,950,000 11,508,960 - -------------------------------------------------------------------------------------------------------------------------------- SITA 26,200 5,928,048 - -------------------------------------------------------------------------------------------------------------------------------- Waste Management, Inc. 209,000 11,233,750 - -------------------------------------------------------------------------------------------------------------------------------- WPP Group plc 2,677,200 22,640,678 ------------- 71,785,305 - -------------------------------------------------------------------------------------------------------------------------------- Manufacturing--3.0% Bombardier, Inc., Cl. B 506,000 7,692,318 - -------------------------------------------------------------------------------------------------------------------------------- Pirelli SpA 3,003,200 8,176,397 - -------------------------------------------------------------------------------------------------------------------------------- Sidel SA 48,600 5,909,134 - -------------------------------------------------------------------------------------------------------------------------------- Societe BIC SA 289,232 15,256,882 ------------- 37,034,731 ================================================================================================================================ Communication Services--8.7% - -------------------------------------------------------------------------------------------------------------------------------- Telecommunications: Long Distance--4.4% AT&T Corp. 208,000 11,609,000 - -------------------------------------------------------------------------------------------------------------------------------- MCI WorldCom, Inc.(1) 133,800 11,515,162 - -------------------------------------------------------------------------------------------------------------------------------- Nippon Telegraph & Telephone Corp. 1,500 17,474,117 - -------------------------------------------------------------------------------------------------------------------------------- Telstra Corp. Ltd. 2,310,700 13,240,900 ------------- 53,839,179 - -------------------------------------------------------------------------------------------------------------------------------- Telephone Utilities--4.3% Hellenic Telecommunication Organization SA 488,888 10,479,164 - -------------------------------------------------------------------------------------------------------------------------------- Olivetti SpA(1) 2,484,100 5,968,962 - -------------------------------------------------------------------------------------------------------------------------------- SK Telecom Co. Ltd. 2,266 3,087,584 - -------------------------------------------------------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA 422,188,000 7,739,145 - -------------------------------------------------------------------------------------------------------------------------------- Telecom Italia Mobile SpA 1,256,800 7,504,444 - -------------------------------------------------------------------------------------------------------------------------------- Telecomunicacoes de Sao Paulo SA, Preference 90,042,150 10,690,591 - -------------------------------------------------------------------------------------------------------------------------------- Videsh Sanchar Nigam Ltd., GDR(2) 645,000 8,207,625 ------------- 53,677,515 4 Oppenheimer Global Securities Fund/VA Statement of Investments (Unaudited) (Continued) Market Value Shares Note 1 ================================================================================================================================ Consumer Cyclicals--14.3% - -------------------------------------------------------------------------------------------------------------------------------- Autos & Housing--8.3% Autoliv, Inc., SDR 301,600 $ 9,188,044 - -------------------------------------------------------------------------------------------------------------------------------- Hanson plc 1,608,400 14,286,534 - -------------------------------------------------------------------------------------------------------------------------------- IRSA-Inversiones y Representaciones SA 1,796,108 5,532,715 - -------------------------------------------------------------------------------------------------------------------------------- Porsche AG, Preference 16,500 38,456,184 - -------------------------------------------------------------------------------------------------------------------------------- Solidere, GDR(2) 110,000 987,250 - -------------------------------------------------------------------------------------------------------------------------------- Volkswagen AG 517,700 33,405,511 ------------- 101,856,238 - -------------------------------------------------------------------------------------------------------------------------------- Leisure & Entertainment--2.3% Hasbro, Inc. 396,100 11,066,044 - -------------------------------------------------------------------------------------------------------------------------------- International Game Technology 494,000 9,139,000 - -------------------------------------------------------------------------------------------------------------------------------- Nintendo Co. Ltd. 54,000 7,588,972 ------------- 27,794,016 - -------------------------------------------------------------------------------------------------------------------------------- Media--1.0% Reed International plc 462,300 3,084,322 - -------------------------------------------------------------------------------------------------------------------------------- Singapore Press Holdings Ltd. 560,000 9,539,098 ------------- 12,623,420 - -------------------------------------------------------------------------------------------------------------------------------- Retail: General--0.4% Sonae Investimentos 145,100 4,935,053 - -------------------------------------------------------------------------------------------------------------------------------- Retail: Specialty--1.8% Circuit City Stores-Circuit City Group 137,000 12,741,000 - -------------------------------------------------------------------------------------------------------------------------------- Dixons Group plc 527,994 9,862,482 ------------- 22,603,482 - -------------------------------------------------------------------------------------------------------------------------------- Textile/Apparel & Home Furnishings--0.5% Bulgari SpA 976,800 6,567,908 ================================================================================================================================ Consumer Staples--11.5% - -------------------------------------------------------------------------------------------------------------------------------- Beverages--1.4% Cadbury Schweppes plc(1) 2,036,400 12,968,308 - -------------------------------------------------------------------------------------------------------------------------------- Cia Cervejaria Brahma, Preference 7,335,000 4,037,883 ------------- 17,006,191 - -------------------------------------------------------------------------------------------------------------------------------- Broadcasting--7.1% Canal Plus(1) 128,951 36,184,873 - -------------------------------------------------------------------------------------------------------------------------------- Grupo Televisa SA, Sponsored GDR(1)(2) 403,500 18,081,844 - -------------------------------------------------------------------------------------------------------------------------------- Prosieben Media AG, Preferred 235,948 10,876,712 - -------------------------------------------------------------------------------------------------------------------------------- Television Broadcasts Ltd. 1,200,000 5,629,874 - -------------------------------------------------------------------------------------------------------------------------------- Television Francaise 1 50,000 11,653,389 - -------------------------------------------------------------------------------------------------------------------------------- TeleWest Communications plc(1) 1,183,470 5,307,358 ------------- 87,734,050 Oppenheimer Global Securities Fund/VA 5 Statement of Investments (Unaudited) (Continued) Market Value Shares Note 1 - -------------------------------------------------------------------------------------------------------------------------------- Entertainment--0.3% Corporacion Interamericana de Entretenimiento SA(1) 140,101 $ 404,835 - -------------------------------------------------------------------------------------------------------------------------------- Corporacion Interamericana de Entretenimiento SA, Cl. B(1) 1,050,764 3,408,866 ------------- 3,813,701 - -------------------------------------------------------------------------------------------------------------------------------- Food--0.4% Cresud SA, Sponsored ADR 475,159 5,226,749 - -------------------------------------------------------------------------------------------------------------------------------- Food & Drug Retailers--1.2% Carrefour SA(1) 26,100 3,835,563 - -------------------------------------------------------------------------------------------------------------------------------- Dairy Farm International Holdings Ltd. 9,080,216 10,896,259 ------------- 14,731,822 - -------------------------------------------------------------------------------------------------------------------------------- Household Goods--1.1% Wella AG, Preference 18,800 13,377,678 ================================================================================================================================ Energy--0.4% - -------------------------------------------------------------------------------------------------------------------------------- Oil: International--0.4% BP Amoco plc, ADR 46,894 5,087,999 ================================================================================================================================ Financial--11.5% - -------------------------------------------------------------------------------------------------------------------------------- Banks--3.6% Banco Bradesco SA, Preference 1,024,032,724 5,140,526 - -------------------------------------------------------------------------------------------------------------------------------- Banco Frances del Rio de la Plata SA, Sponsored ADR 306,650 5,826,350 - -------------------------------------------------------------------------------------------------------------------------------- Credito Italiano SpA 1,303,100 5,724,811 - -------------------------------------------------------------------------------------------------------------------------------- Royal Bank of Scotland Group plc 340,000 6,919,011 - -------------------------------------------------------------------------------------------------------------------------------- Societe Generale 60,400 10,645,175 - -------------------------------------------------------------------------------------------------------------------------------- UBS AG 35,000 10,446,491 ------------- 44,702,364 - -------------------------------------------------------------------------------------------------------------------------------- Diversified Financial--4.9% American Express Co. 99,000 12,882,375 - -------------------------------------------------------------------------------------------------------------------------------- Associates First Capital Corp., Cl. A 139,700 6,190,456 - -------------------------------------------------------------------------------------------------------------------------------- Credit Saison Co. Ltd. 390,000 8,152,109 - -------------------------------------------------------------------------------------------------------------------------------- Fannie Mae 190,000 12,991,250 - -------------------------------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The)(1) 15,200 1,098,200 - -------------------------------------------------------------------------------------------------------------------------------- Housing Development Finance Corp. Ltd.(1) 22,290 1,142,263 - -------------------------------------------------------------------------------------------------------------------------------- ICICI Ltd., GDR(2) 702,700 7,290,512 - -------------------------------------------------------------------------------------------------------------------------------- ICICI Ltd., GDR 6,000 62,250 - -------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 15,300 1,568,250 - -------------------------------------------------------------------------------------------------------------------------------- Nichiei Co. Ltd. 98,000 8,582,559 ------------- 59,960,224 - -------------------------------------------------------------------------------------------------------------------------------- Insurance--3.0% Allied Zurich plc 931,300 11,707,365 - -------------------------------------------------------------------------------------------------------------------------------- American International Group, Inc. 45,550 5,332,197 - -------------------------------------------------------------------------------------------------------------------------------- AXA SA 87,300 10,650,568 - -------------------------------------------------------------------------------------------------------------------------------- Chubb Corp. 140,000 9,730,000 ------------- 37,420,130 6 Oppenheimer Global Securities Fund/VA Statement of Investments (Unaudited) (Continued) Market Value Shares Note 1 ================================================================================================================================ Healthcare--12.8% - -------------------------------------------------------------------------------------------------------------------------------- Healthcare/Drugs--9.9% Amgen, Inc.(1) 147,100 $ 8,954,713 - -------------------------------------------------------------------------------------------------------------------------------- Eisai Co. Ltd. 704,000 13,872,218 - -------------------------------------------------------------------------------------------------------------------------------- Elan Corp. plc, ADR(1) 450,600 12,504,150 - -------------------------------------------------------------------------------------------------------------------------------- Fresenius AG, Preference 126,399 22,159,827 - -------------------------------------------------------------------------------------------------------------------------------- Genset, Sponsored ADR(1) 800,000 12,500,000 - -------------------------------------------------------------------------------------------------------------------------------- Genzyme Corp. (General Division)(1) 177,400 8,603,900 - -------------------------------------------------------------------------------------------------------------------------------- Genzyme Surgical Products(1) 31,756 139,925 - -------------------------------------------------------------------------------------------------------------------------------- Gilead Sciences, Inc.(1) 172,700 9,023,575 - -------------------------------------------------------------------------------------------------------------------------------- Glaxo Wellcome plc, Sponsored ADR 140,000 7,927,500 - -------------------------------------------------------------------------------------------------------------------------------- Millennium Pharmaceuticals, Inc.(1) 193,900 6,980,400 - -------------------------------------------------------------------------------------------------------------------------------- Pliva d.d., Sponsored GDR(2) 810,300 12,195,015 - -------------------------------------------------------------------------------------------------------------------------------- Taisho Pharmaceutical Co. 210,000 6,940,075 ------------- 121,801,298 - -------------------------------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--2.9% Affymetrix, Inc.(1) 186,500 9,208,438 - -------------------------------------------------------------------------------------------------------------------------------- Bard (C.R.), Inc. 51,900 2,481,469 - -------------------------------------------------------------------------------------------------------------------------------- Cardinal Health, Inc. 92,000 5,899,500 - -------------------------------------------------------------------------------------------------------------------------------- Hoya Corp. 83,000 4,683,642 - -------------------------------------------------------------------------------------------------------------------------------- Quintiles Transnational Corp.(1) 317,600 13,339,200 ------------- 35,612,249 ================================================================================================================================ Technology--27.6% - -------------------------------------------------------------------------------------------------------------------------------- Computer Hardware--4.0% International Business Machines Corp. 169,500 21,907,875 - -------------------------------------------------------------------------------------------------------------------------------- Sun Microsystems, Inc.(1) 400,300 27,570,663 ------------- 49,478,538 - -------------------------------------------------------------------------------------------------------------------------------- Computer Services--1.5% Cap Gemini SA 115,600 18,168,397 - -------------------------------------------------------------------------------------------------------------------------------- Computer Software--2.6% Cadence Design Systems, Inc.(1) 640,900 8,171,475 - -------------------------------------------------------------------------------------------------------------------------------- Getronics NV 339,700 13,067,069 - -------------------------------------------------------------------------------------------------------------------------------- Lernout & Hauspie Speech Products NV(1) 313,100 11,095,481 ------------- 32,334,025 - -------------------------------------------------------------------------------------------------------------------------------- Communications Equipment--13.9% Alcatel(1) 47,400 6,672,442 - -------------------------------------------------------------------------------------------------------------------------------- Cisco Systems, Inc.(1) 264,950 17,072,716 - -------------------------------------------------------------------------------------------------------------------------------- Nokia Corp., A Shares, Sponsored ADR 125,100 11,454,469 - -------------------------------------------------------------------------------------------------------------------------------- QUALCOMM, Inc.(1) 780,200 111,958,700 - -------------------------------------------------------------------------------------------------------------------------------- Scientific-Atlanta, Inc. 661,400 23,810,400 ------------- 170,968,727 Oppenheimer Global Securities Fund/VA 7 Statement of Investments (Unaudited) (Continued) Market Value Shares Note 1 - -------------------------------------------------------------------------------------------------------------------------------- Electronics--5.6% Advanced Micro Devices, Inc.(1) 250,000 $ 4,515,625 - -------------------------------------------------------------------------------------------------------------------------------- Koninklijke (Royal) Philips Electronics N.V. 202,400 19,964,999 - -------------------------------------------------------------------------------------------------------------------------------- National Semiconductor Corp.(1) 1,176,100 29,770,031 - -------------------------------------------------------------------------------------------------------------------------------- STMicroelectronics NV, NY Shares 217,000 15,054,375 ------------- 69,305,030 ================================================================================================================================ Utilities--0.9% - -------------------------------------------------------------------------------------------------------------------------------- Electric Utilities--0.9% Vivendi (Ex-Generale des Eaux) 130,909 10,604,483 ------------- Total Common Stocks (Cost $960,433,709) 1,221,791,368 Units ================================================================================================================================ Rights, Warrants and Certificates--0.0% - -------------------------------------------------------------------------------------------------------------------------------- Olivetti SpA Rts., Exp. 7/99 2,484,100 334,313 - -------------------------------------------------------------------------------------------------------------------------------- PT Pan Indonesia Bank Wts., Exp. 6/00 423,810 42,783 - -------------------------------------------------------------------------------------------------------------------------------- SK Telecom Co. Ltd. ADR Rts., Exp. 7/99 519 -- ------------- Total Rights, Warrants and Certificates (Cost $0) 377,096 Principal Amount ================================================================================================================================ Repurchase Agreements--1.6% - -------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 4.80%, dated 6/30/99, to be repurchased at $19,902,653 on 7/1/99, collateralized by U.S. Treasury Nts., 5.50%-8%, 11/30/99-7/15/06, with a value of $16,799,604, U.S. Treasury Bonds, 6%-9.25%, 2/15/16-2/15/26, with a value of $3,517,974 (Cost $19,900,000) $19,900,000 19,900,000 - -------------------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $980,333,709) 100.7% 1,242,068,464 - -------------------------------------------------------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (0.7) (8,885,594) ----------- -------------- Net Assets 100.0% $1,233,182,870 =========== ==============
8 Oppenheimer Global Securities Fund/VA Statement of Investments (Unaudited) (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 $ 482,071,575 38.8% - -------------------------------------------------------------------------------------------------------------------------------- France 163,063,330 13.1 - -------------------------------------------------------------------------------------------------------------------------------- Great Britain 119,480,572 9.6 - -------------------------------------------------------------------------------------------------------------------------------- Germany 118,275,912 9.5 - -------------------------------------------------------------------------------------------------------------------------------- Japan 67,293,691 5.4 - -------------------------------------------------------------------------------------------------------------------------------- Italy 34,276,835 2.8 - -------------------------------------------------------------------------------------------------------------------------------- The Netherlands 33,032,067 2.7 - -------------------------------------------------------------------------------------------------------------------------------- Brazil 27,608,145 2.2 - -------------------------------------------------------------------------------------------------------------------------------- Mexico 21,895,545 1.8 - -------------------------------------------------------------------------------------------------------------------------------- Singapore 20,435,357 1.7 - -------------------------------------------------------------------------------------------------------------------------------- Switzerland 18,110,510 1.5 - -------------------------------------------------------------------------------------------------------------------------------- India 16,702,650 1.3 - -------------------------------------------------------------------------------------------------------------------------------- Argentina 16,585,815 1.3 - -------------------------------------------------------------------------------------------------------------------------------- Australia 13,240,900 1.1 - -------------------------------------------------------------------------------------------------------------------------------- Ireland 12,504,150 1.0 - -------------------------------------------------------------------------------------------------------------------------------- Croatia 12,195,015 1.0 - -------------------------------------------------------------------------------------------------------------------------------- Finland 11,454,469 0.9 - -------------------------------------------------------------------------------------------------------------------------------- Belgium 11,095,481 0.9 - -------------------------------------------------------------------------------------------------------------------------------- Greece 10,479,164 0.8 - -------------------------------------------------------------------------------------------------------------------------------- Sweden 9,188,044 0.7 - -------------------------------------------------------------------------------------------------------------------------------- Canada 7,692,318 0.6 - -------------------------------------------------------------------------------------------------------------------------------- Hong Kong 5,629,874 0.5 - -------------------------------------------------------------------------------------------------------------------------------- Portugal 4,935,054 0.4 - -------------------------------------------------------------------------------------------------------------------------------- Korea, Republic of (South) 3,087,584 0.2 - -------------------------------------------------------------------------------------------------------------------------------- Lebanon 987,250 0.1 - -------------------------------------------------------------------------------------------------------------------------------- Peru 704,375 0.1 - -------------------------------------------------------------------------------------------------------------------------------- Indonesia 42,782 0.0 -------------- ------ Total $1,242,068,464 100.0% ============== ======
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 $46,762,246 or 3.79% of the Fund's net assets as of June 30, 1999. See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 9 Statement of Assets and Liabilities June 30, 1999 (Unaudited) ===================================================================================================== Assets Investments, at value (cost $980,333,709)--see accompanying statement $1,242,068,464 - ----------------------------------------------------------------------------------------------------- Cash--foreign currencies (cost $1,139,388) 1,139,388 - ----------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency exchange contracts--Note 5 2,349,915 - ----------------------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends 2,333,113 Shares of beneficial interest sold 1,496,365 Investments sold 1,106,314 Other 5,610 -------------- Total assets 1,250,499,169 ===================================================================================================== Liabilities Bank overdraft 44,957 - ----------------------------------------------------------------------------------------------------- Unrealized depreciation on foreign currency exchange contracts--Note 5 3,506,131 - ----------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 11,580,603 Shares of beneficial interest redeemed 2,103,832 Custodian fees 53,711 Shareholder reports 13,607 Other 13,458 -------------- Total liabilities 17,316,299 ===================================================================================================== Net Assets $1,233,182,870 ============== ===================================================================================================== Composition of Net Assets Paid-in capital $ 883,144,439 - ----------------------------------------------------------------------------------------------------- Undistributed net investment income 3,010,462 - ----------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 86,515,530 - ----------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 260,512,439 -------------- Net assets--applicable to 51,394,306 shares of beneficial interest outstanding $1,233,182,870 ============== ===================================================================================================== Net Asset Value, Redemption Price Per Share and Offering Price Per Share $23.99
See accompanying Notes to Financial Statements. 10 Oppenheimer Global Securities Fund/VA Statement of Operations For the Six Months Ended June 30, 1999 (Unaudited) ====================================================================================== Investment Income Dividends (net of foreign withholding taxes of $428,608) $ 8,220,336 - -------------------------------------------------------------------------------------- Interest 532,215 ------------ Total income 8,752,551 ====================================================================================== Expenses Management fees--Note 4 3,857,626 - -------------------------------------------------------------------------------------- Custodian fees and expenses 133,347 - -------------------------------------------------------------------------------------- Legal, auditing and other professional fees 14,925 - -------------------------------------------------------------------------------------- Trustees' compensation 4,072 - -------------------------------------------------------------------------------------- Insurance expenses 3,253 - -------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 1,047 - -------------------------------------------------------------------------------------- Other 26,790 ------------ Total expenses 4,041,060 Less expenses paid indirectly--Note 1 (3,947) ------------ Net expenses 4,037,113 ====================================================================================== Net Investment Income 4,715,438 ====================================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments 98,979,853 Foreign currency transactions (10,310,611) ------------ Net realized gain 88,669,242 - -------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on: Investments 99,820,091 Translation of assets and liabilities denominated in foreign currencies (42,378,665) ------------ Net change 57,441,426 ------------ Net realized and unrealized gain 146,110,668 ====================================================================================== Net Increase in Net Assets Resulting from Operations $150,826,106 ============
See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 11 Statements of Changes in Net Assets
Six Months Ended Year Ended June 30, 1999 December 31, (Unaudited) 1998 ==================================================================================================== Operations Net investment income $ 4,715,438 $ 12,887,134 - ---------------------------------------------------------------------------------------------------- Net realized gain 88,669,242 36,962,992 - ---------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 57,441,426 86,460,026 --------------- --------------- Net increase in net assets resulting from operations 150,826,106 136,310,152 ==================================================================================================== Dividends and Distributions to Shareholders Dividends from net investment income (13,297,182) (21,307,082) - ---------------------------------------------------------------------------------------------------- Distributions from net realized gain (37,262,160) (80,203,951) ==================================================================================================== Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions--Note 2 (2,113,028) 141,119,795 ==================================================================================================== Net Assets Total increase 98,153,736 175,918,914 - ---------------------------------------------------------------------------------------------------- Beginning of period 1,135,029,134 959,110,220 --------------- --------------- End of period (including undistributed net investment income of $3,010,462 and $11,592,206, respectively) $ 1,233,182,870 $ 1,135,029,134 =============== ===============
See accompanying Notes to Financial Statements. 12 Oppenheimer Global Securities Fund/VA Financial Highlights
Six Months Ended June 30, 1999 Year Ended December 31, (Unaudited) 1998 1997 1996 1995 1994 ===================================================================================================================== Per Share Operating Data Net asset value, beginning of period $22.07 $21.37 $17.67 $15.00 $15.09 $16.30 - --------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .10 .24 .25 .15 .12 .04 Net realized and unrealized gain (loss) 2.83 2.64 3.68 2.52 .19 (.96) - --------------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 2.93 2.88 3.93 2.67 .31 (.92) - --------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.27) (.46) (.23) -- -- (.04) Distributions from net realized gain (.74) (1.72) -- -- (.40) (.25) - --------------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.01) (2.18) (.23) -- (.40) (.29) - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $23.99 $22.07 $21.37 $17.67 $15.00 $15.09 ====== ====== ====== ====== ====== ====== ===================================================================================================================== Total Return, at Net Asset Value(1) 13.80% 14.11% 22.42% 17.80% 2.24% (5.72)% ===================================================================================================================== Ratios/Supplemental Data Net assets, end of period (in millions) $1,233 $1,135 $959 $582 $361 $298 - --------------------------------------------------------------------------------------------------------------------- Average net assets (in millions) $1,157 $1,055 $802 $467 $332 $215 - --------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(2) Net investment income 0.82% 1.22% 1.51% 1.09% 0.86% 0.54% Expenses(3) 0.70% 0.74% 0.76% 0.81% 0.89% 0.91% - --------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(4) 34% 81% 67% 90% 131% 70%
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. Beginning in fiscal 1995, the expense ratio reflects the effect of expenses paid indirectly by the Fund. Prior year expense ratios have not been adjusted. 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 June 30, 1999, were $391,062,241 and $434,947,928, respectively. Oppenheimer Global Securities Fund/VA 13 Notes to Financial Statements (Unaudited) ================================================================================ 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 operated under the name Oppenheimer Global Securities Fund through April 30, 1999. 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 Trust'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. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- Distributions to Shareholders. Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. - -------------------------------------------------------------------------------- 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. 14 Oppenheimer Global Securities Fund/VA Notes to Financial Statements (Unaudited) (Continued) ================================================================================ 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. Foreign dividend income is often recorded on the payable 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:
Six Months Ended June 30, 1999 Year Ended December 31, 1998 ------------------------------ -------------------------------- Shares Amount Shares Amount - ------------------------------------------------------------------------------------------------------------------------------- Sold 4,066,790 $ 92,504,611 11,735,029 $ 248,354,528 Dividends and distributions reinvested 2,349,412 50,559,342 4,877,993 101,511,033 Redeemed (6,451,089) (145,176,981) (10,067,775) (208,745,766) ---------- ------------ ----------- ------------- Net increase (decrease) (34,887) $ (2,113,028) 6,545,247 $ 141,119,795 ========== ============ =========== =============
================================================================================ 3. Unrealized Gains and Losses on Securities As of June 30, 1999, net unrealized appreciation on investments of $261,734,755 was composed of gross appreciation of $308,639,974, and gross depreciation of $46,905,219. ================================================================================ 4. Management Fees and Other Transactions with Affiliates 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 six months ended June 30, 1999 was 0.67% of average annual net assets. 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 at cost. Oppenheimer Global Securities Fund/VA 15 Notes to Financial Statements (Unaudited) (Continued) ================================================================================ 5. Foreign Currency Contracts A foreign currency exchange 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 exchange contracts for operational purposes and to seek to protect against adverse exchange rate fluctuation. 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 June 30, 1999, the Fund had outstanding futures contracts as follows:
Expiration Contract Valuation as of Unrealized Unrealized Contract Description Dates Amounts (000s) June 30, 1999 Appreciation Depreciation - ------------------------------------------------------------------------------------------------------------------------ Contracts to Purchase - --------------------- Euro (EUR) 7/1/99 1,519 EUR $ 1,566,096 $ -- $ 8,393 Euro (EUR) 8/11/99 67,764 EUR 70,071,854 -- 3,482,469 ---------- ---------- -- 3,490,862 ---------- ---------- Contracts to Sell - ----------------- British Pound Sterling (GBP) 8/11/99 45,160 GBP 71,204,408 2,349,915 -- Japanese Yen (JPY) 9/8/99 4,745,200 JPY 39,651,086 -- 15,269 ---------- ---------- 2,349,915 15,269 ---------- ---------- Total Unrealized Appreciation and Depreciation $2,349,915 $3,506,131 ========== ==========
16 Oppenheimer Global Securities Fund/VA Oppenheimer Global Securities Fund/VA A Series of Oppenheimer Variable Account Funds ========================================================================================== Officers and Trustees James C. Swain, Chairman and Chief Executive Officer Bridget A. Macaskill, President Robert G. Avis, Trustee William A. Baker, 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, Vice President and 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. The financial statements included herein have been taken from the records of the Fund without examination of the independent auditors. 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.
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