<PAGE> 1
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NATIONWIDE ASSET ALLOCATION TRUST
SEMI-ANNUAL REPORT
JUNE 30, 1998
(UNAUDITED)
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<PAGE> 2
NATIONWIDE ASSET ALLOCATION TRUST
SEMI-ANNUAL REPORT
JUNE 30, 1998
(UNAUDITED)
TABLE OF CONTENTS
<TABLE>
<S> <C>
Statements of Investments:
Aggressive Portfolio................................... 1
Moderately Aggressive Portfolio........................ 2
Moderate Portfolio..................................... 3
Moderately Conservative Portfolio...................... 4
Conservative Portfolio................................. 5
Statements of Assets and Liabilities........................ 6
Statements of Operations.................................... 7
Statements of Changes in Net Assets......................... 8
Financial Highlights........................................ 10
Notes to Financial Statements............................... 12
</TABLE>
<PAGE> 3
NATIONWIDE ASSET ALLOCATION TRUST
AGGRESSIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (100.0%)
AGGRESSIVE GROWTH (40.1%)
53,334 Nationwide Separate Account
Trust Small Company Fund $ 897,074
10,957 Oppenheimer Capital Appreciation
Fund Class A 446,827
8,826 Oppenheimer Discovery Fund Class
A 450,587
-----------
1,794,488
-----------
GROWTH & INCOME (19.9%)
30,078 Federated Max-Cap Fund 710,442
5,777 Nationwide Fund Class D 178,796
-----------
889,238
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
GROWTH (40.0%)
10,026 American Century Equity Growth
Fund $ 219,580
5,726 Dreyfus Appreciation Fund, Inc. 224,221
4,538 Federated Stock Trust 179,967
7,384 MAS Equity Portfolio Adviser
Class 176,631
24,975 Nationwide Separate Account
Trust Capital Appreciation Fund 629,127
2,655 Strong Schafer Value Fund 175,365
8,462 Warburg Pincus Capital
Appreciation Fund 180,672
-----------
1,785,563
-----------
TOTAL INVESTMENTS
(cost $4,339,531) $ 4,469,289
===========
</TABLE>
- --------------------------------------------------------------------------------
Cost also represents cost for federal income tax purposes.
Portfolio holding percentages represent market value as a percentage of net
assets at June 30, 1998.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT 1
<PAGE> 4
NATIONWIDE ASSET ALLOCATION TRUST
MODERATELY AGGRESSIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (90.0%)
AGGRESSIVE GROWTH (30.2%)
22,236 Nationwide Separate Account $ 374,002
Trust Small Company Fund
4,211 Oppenheimer Capital Appreciation 171,715
Fund Class A
3,835 Oppenheimer Discovery Fund 195,790
Class A
-----------
741,507
-----------
GROWTH & INCOME (19.9%)
16,552 Federated Max-Cap Fund 390,953
3,176 Nationwide Fund Class D 98,304
-----------
489,257
-----------
GROWTH (29.9%)
4,473 American Century Equity Growth 97,952
Fund
2,493 Dreyfus Appreciation Fund, Inc. 97,619
2,585 Federated Stock Trust 102,522
3,005 MAS Equity Portfolio Adviser 71,872
Class
9,690 Nationwide Separate Account 244,091
Trust Capital Appreciation Fund
724 Strong Schafer Value Fund 47,860
3,456 Warburg Pincus Capital 73,786
Appreciation Fund
-----------
735,702
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
INCOME (10.0%)
24,431 Nationwide Separate Account $ 245,775
Trust Income Fund
-----------
TOTAL MUTUAL FUNDS
2,212,241
(cost $2,150,366)
-----------
FIXED INCOME (10.0%)
245,537 Nationwide Fixed Contract
245,537
(cost $245,537)
-----------
TOTAL INVESTMENTS
$ 2,457,778
(cost $2,395,903)
===========
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $2,395,907.
Portfolio holding percentages represent market value as a percentage of net
assets at June 30, 1998.
See accompanying notes to financial statements.
2 NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT
<PAGE> 5
NATIONWIDE ASSET ALLOCATION TRUST
MODERATE PORTFOLIO
STATEMENT OF INVESTMENTS -- JUNE 30,1998 (UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (90.0%)
AGGRESSIVE GROWTH (20.2%)
8,880 Nationwide Separate Account
Trust Small Company Fund $ 149,359
1,804 Oppenheimer Capital
Appreciation Fund Class A 73,585
1,428 Oppenheimer Discovery Fund
Class A 72,918
-----------
295,862
-----------
GROWTH & INCOME (29.8%)
14,752 Federated Max-Cap Fund 348,433
2,903 Nationwide Fund Class D 89,846
-----------
438,279
-----------
GROWTH (20.0%)
2,160 American Century Equity Growth
Fund 47,313
719 Dreyfus Appreciation Fund,
Inc. 28,151
751 Federated Stock Trust 29,770
1,202 MAS Equity Portfolio Adviser
Class 28,751
4,060 Nationwide Separate Account
Trust Capital Appreciation
Fund 102,270
427 Strong Schafer Value Fund 28,178
1,377 Warburg Pincus Capital
Appreciation Fund 29,402
-----------
293,835
-----------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------
SHARES SECURITY VALUE
- --------------------------------------------------------
<C> <S> <C>
INCOME (20.0%)
29,267 Nationwide Separate Account
Trust Income Fund $ 294,423
-----------
TOTAL MUTUAL FUNDS
(cost $1,308,186) 1,322,399
-----------
FIXED INCOME (10.0%)
146,889 Nationwide Fixed Contract
(cost $146,889) 146,889
-----------
TOTAL INVESTMENTS
(cost $1,455,075) $ 1,469,288
===========
</TABLE>
- --------------------------------------------------------------------------------
Cost also represents cost for federal income tax purposes.
Portfolio holding percentages represent market value as a percentage of net
assets at June 30, 1998.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT 3
<PAGE> 6
NATIONWIDE ASSET ALLOCATION TRUST
MODERATELY CONSERVATIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (80.0%)
AGGRESSIVE GROWTH (10.1%)
2,506 Nationwide Separate Account $ 42,152
Trust Small Company Fund
326 Oppenheimer Capital Appreciation 13,274
Fund Class A
400 Oppenheimer Discovery Fund Class 20,445
A
-----------
75,871
-----------
GROWTH & INCOME (29.9%)
7,719 Federated Max-Cap Fund 182,322
1,346 Nationwide Fund Class D 41,654
-----------
223,976
-----------
GROWTH (10.0%)
624 American Century Equity Growth 13,664
Fund
165 Dreyfus Appreciation Fund, Inc. 6,472
174 Federated Stock Trust 6,884
274 MAS Equity Portfolio Adviser 6,552
Class
1,649 Nationwide Separate Account 41,542
Trust Capital Appreciation Fund
-----------
75,114
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
INCOME (30.0%)
22,318 Nationwide Separate Account $ 224,518
Trust Income Fund
-----------
TOTAL MUTUAL FUNDS
599,479
(cost $593,820)
-----------
FIXED INCOME (19.9%)
148,839 Nationwide Fixed Contract
148,839
(cost $148,839)
-----------
TOTAL INVESTMENTS
$ 748,318
(cost $742,659)
===========
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $742,831.
Portfolio holding percentages represent market value as a percentage of net
assets at June 30, 1998.
See accompanying notes to financial statements.
4 NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT
<PAGE> 7
NATIONWIDE ASSET ALLOCATION TRUST
CONSERVATIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (75.0%)
GROWTH & INCOME (20.0%)
3,114 Federated Max-Cap Fund $ 73,562
586 Nationwide Fund Class D 18,143
-----------
91,705
-----------
GROWTH (10.0%)
220 American Century Equity Growth 4,820
Fund
115 Dreyfus Appreciation Fund, Inc. 4,516
154 Federated Stock Trust 6,091
147 MAS Equity Portfolio Adviser 3,507
Class
884 Nationwide Separate Account 22,277
Trust Capital Appreciation Fund
76 Strong Schafer Value Fund 5,027
-----------
46,238
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
INCOME (45.0%)
20,608 Nationwide Separate Account $ 207,315
Trust Income Fund
-----------
TOTAL MUTUAL FUNDS
345,258
(cost $342,455)
-----------
FIXED INCOME (25.0%)
114,965 Nationwide Fixed Contract
114,965
(cost $114,965)
-----------
TOTAL INVESTMENTS
$ 460,223
(cost $457,420)
===========
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $458,139.
Portfolio holding percentages represent market value as a percentage of net
assets at June 30, 1998.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT 5
<PAGE> 8
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATELY MODERATELY
AGGRESSIVE AGGRESSIVE MODERATE CONSERVATIVE CONSERVATIVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value
(cost $4,339,531, $2,395,903,
$1,455,075, $742,659, $457,420,
respectively) $4,469,289 $2,457,778 $1,469,288 $748,318 $ 460,223
Interest and dividends receivable 167 246 176 129 89
Receivable for fund shares sold 15,397 4,917 2,845 885 15,040
---------- ---------- ---------- -------- ----------
Total assets 4,484,853 2,462,941 1,472,309 749,332 475,352
---------- ---------- ---------- -------- ----------
LIABILITIES
Payable for investment securities
purchased 15,563 5,123 2,998 105 15,111
Accrued management fees 1,694 951 566 265 196
---------- ---------- ---------- -------- ----------
Total liabilities 17,257 6,074 3,564 370 15,307
---------- ---------- ---------- -------- ----------
NET ASSETS $4,467,596 $2,456,867 $1,468,745 $748,962 $ 460,045
========== ========== ========== ======== ==========
REPRESENTED BY:
Capital $4,314,766 $2,372,415 $1,441,223 $734,986 $ 446,820
Net unrealized appreciation on
investments 129,758 61,875 14,213 5,659 2,802
Undistributed net realized gain on
investments 17,051 13,967 5,721 3,166 5,922
Undistributed net investment income 6,021 8,610 7,588 5,151 4,501
---------- ---------- ---------- -------- ----------
NET ASSETS $4,467,596 $2,456,867 $1,468,745 $748,962 $ 460,045
========== ========== ========== ======== ==========
Shares outstanding (unlimited number of
shares authorized) 388,553 218,139 131,702 68,660 43,250
========== ========== ========== ======== ==========
NET ASSET VALUE, offering and redemption
price per share $ 11.50 $ 11.26 $ 11.15 $ 10.91 $ 10.64
========== ========== ========== ======== ==========
</TABLE>
See accompanying notes to financial statements.
6 NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT
<PAGE> 9
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF OPERATIONS
JANUARY 20, 1998, (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATELY MODERATELY
AGGRESSIVE AGGRESSIVE MODERATE CONSERVATIVE CONSERVATIVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest $ -- $ 3,578 $ 1,669 $ 1,601 $ 2,035
Dividends 12,073 10,492 8,112 4,932 4,506
-------- ------- ------- ------- -------
Total income 12,073 14,070 9,781 6,533 6,541
-------- ------- ------- ------- -------
EXPENSES:
Management fees 5,199 3,077 1,436 688 705
-------- ------- ------- ------- -------
NET INVESTMENT INCOME $ 6,874 $10,993 $ 8,345 $ 5,845 $ 5,836
======== ======= ======= ======= =======
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on investments $ 17,051 $13,967 $ 5,721 $ 3,166 $ 5,922
Net change in unrealized appreciation on
investments 129,758 61,875 14,213 5,659 2,802
-------- ------- ------- ------- -------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS 146,809 75,842 19,934 8,825 8,724
-------- ------- ------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $153,683 $86,835 $28,279 $14,670 $14,560
======== ======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT 7
<PAGE> 10
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATELY
AGGRESSIVE PORTFOLIO AGGRESSIVE PORTFOLIO
------------------------ ------------------------
PERIOD FROM PERIOD FROM
JANUARY 20, 1998 JANUARY 20, 1998
(COMMENCEMENT OF (COMMENCEMENT OF
OPERATIONS) THROUGH OPERATIONS) THROUGH
JUNE 30, 1998 JUNE 30, 1998
------------------------ ------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 6,874 $ 10,993
Net realized gain on investments 17,051 13,967
Net change in unrealized appreciation on
investments 129,758 61,875
---------- ----------
Net increase in net assets resulting from
operations 153,683 86,835
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME (853) (2,383)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 4,431,974 2,514,947
Net asset value of shares issued to shareholders
from reinvestment of dividends 853 2,383
Cost of shares redeemed (118,061) (144,915)
---------- ----------
Increase in net assets from capital share
transactions 4,314,766 2,372,415
---------- ----------
NET INCREASE IN NET ASSETS 4,467,596 2,456,867
---------- ----------
NET ASSETS -- BEGINNING OF PERIOD -- --
---------- ----------
NET ASSETS -- END OF PERIOD $4,467,596 $2,456,867
========== ==========
Undistributed net realized gain on investments $ 17,051 $ 13,967
========== ==========
Undistributed net investment income $ 6,021 $ 8,610
========== ==========
SHARE ACTIVITY:
Shares sold 399,086 230,995
Reinvestment of distributions 75 214
Shares redeemed (10,608) (13,070)
---------- ----------
Net increase in number of shares 388,553 218,139
========== ==========
</TABLE>
See accompanying notes to financial statements.
8 NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT
<PAGE> 11
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATELY CONSERVATIVE
MODERATE PORTFOLIO PORTFOLIO CONSERVATIVE PORTFOLIO
--------------------- ------------------------- -------------------------
<S> <C> <C> <C>
PERIOD FROM PERIOD FROM PERIOD FROM
JANUARY 20,1998 JANUARY 20, 1998 JANUARY 20, 1998
(COMMENCEMENT OF (COMMENCEMENT OF (COMMENCEMENT OF
OPERATIONS) THROUGH OPERATIONS) THROUGH OPERATIONS) THROUGH
JUNE 30, 1998 JUNE 30, 1998 JUNE 30, 1998
---------- ---------- ---------
<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 8,345 $ 5,845 $ 5,836
Net realized gain on
investments 5,721 3,166 5,922
Net change in unrealized
appreciation on investments 14,213 5,659 2,802
---------- ---------- ---------
Net increase in net assets
resulting from operations 28,279 14,670 14,560
---------- ---------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME (757) (694) (1,335)
---------- ---------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of
shares 1,533,309 844,711 984,789
Net asset value of shares
issued to shareholders from
reinvestment of dividends 757 694 1,335
Cost of shares redeemed (92,843) (110,419) (539,304)
---------- ---------- ---------
Increase in net assets from
capital share transactions 1,441,223 734,986 446,820
---------- ---------- ---------
NET INCREASE IN NET ASSETS 1,468,745 748,962 460,045
---------- ---------- ---------
NET ASSETS -- BEGINNING OF PERIOD -- -- --
---------- ---------- ---------
NET ASSETS -- END OF PERIOD $1,468,745 $ 748,962 $ 460,045
========== ========== =========
Undistributed net realized gain
on investments $ 5,721 $ 3,166 $ 5,922
========== ========== =========
Undistributed net investment
income $ 7,588 $ 5,151 $ 4,501
========== ========== =========
SHARE ACTIVITY:
Shares sold 140,175 78,911 94,683
Reinvestment of distributions 69 65 128
Shares redeemed (8,542) (10,316) (51,561)
---------- ---------- ---------
Net increase in number of shares 131,702 68,660 43,250
========== ========== =========
</TABLE>
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT 9
<PAGE> 12
NATIONWIDE ASSET ALLOCATION TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATELY
AGGRESSIVE PORTFOLIO AGGRESSIVE PORTFOLIO
-------------------- --------------------
PERIOD FROM PERIOD FROM
JANUARY 20, 1998 JANUARY 20, 1998
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS)
THROUGH JUNE 30, THROUGH JUNE 30,
1998 1998
-------------------- --------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $10.00 $10.00
Net investment income 0.02 0.06
Net realized and unrealized appreciation 1.49 1.22
------ ------
Total from investment operations 1.51 1.28
------ ------
Distributions from net investment income (0.01) (0.02)
------ ------
Net increase in net asset value 1.50 1.26
------ ------
NET ASSET VALUE -- END OF PERIOD $11.50 $11.26
====== ======
Total Return* 15.05% 12.80%
Ratios and supplemental data:*
Net Assets, end of period (000) $4,468 $2,457
Ratio of expenses to average net assets 0.50% 0.50%
Ratio of net investment income to average net assets 0.66% 1.78%
Portfolio turnover 10.84% 14.31%
</TABLE>
- ------------------------------------------------------
* Ratios are annualized for periods of less than one year. Total return and
portfolio turnover are not annualized.
See accompanying notes to financial statements.
10 NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT
<PAGE> 13
NATIONWIDE ASSET ALLOCATION TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATELY
MODERATE PORTFOLIO CONSERVATIVE PORTFOLIO CONSERVATIVE PORTFOLIO
------------------ ---------------------- ----------------------
PERIOD FROM PERIOD FROM PERIOD FROM
JANUARY 20, 1998 JANUARY 20, 1998 JANUARY 20, 1998
(COMMENCEMENT (COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS) OF OPERATIONS)
THROUGH JUNE 30, THROUGH JUNE 30, THROUGH JUNE 30,
1998 1998 1998
------------------ ---------------------- ----------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE --
BEGINNING OF PERIOD $10.00 $10.00 $ 10.00
Net investment income 0.09 0.12 0.16
Net realized and unrealized
appreciation 1.09 0.83 0.54
------ ------ -------
Total from investment operations 1.18 0.95 0.70
------ ------ -------
Distributions from net investment
income (0.03) (0.04) (0.06)
------ ------ -------
Net increase in net asset value 1.15 0.91 0.64
------ ------ -------
NET ASSET VALUE -- END OF PERIOD $11.15 $10.91 $ 10.64
====== ====== =======
Total Return* 11.80% 9.51% 7.01%
Ratios and supplemental data:*
Net Assets, end of period (000) $1,469 $ 749 $ 460
Ratio of expenses to average net
assets 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 2.91% 4.25% 4.14%
Portfolio turnover 16.56% 33.91% 162.29%
</TABLE>
- ------------------------------------------------------
* Ratios are annualized for periods of less than one year. Total return and
portfolio turnover are not annualized.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT 11
<PAGE> 14
NATIONWIDE ASSET ALLOCATION TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Nationwide Asset Allocation Trust (the "Trust") is an open-end management
investment company organized under the laws of the State of Ohio, by a
Declaration of Trust, dated September 9, 1997. The Trust currently offers shares
in five separate nondiversified funds (each known as a "Nationwide
Professionally Managed Portfolio" or a "Portfolio"), each of which is a
separately managed non-diversified portfolio with its own investment objectives
and policies. These Portfolios are The Aggressive Portfolio, The Moderately
Aggressive Portfolio, The Conservative Portfolio, The Moderately Conservative
Portfolio, and The Conservative Portfolio. The Trust was capitalized on January
6, 1998, when The Nationwide Life Company purchased the initial shares of the
fund at $10.00 per share, and operations commenced on January 20, 1998. The
shares of each Portfolio are sold only to life insurance company separate
accounts to fund the benefits of variable annuity contracts or life insurance
policies.
Each Portfolio is constructed as a "fund of funds" which means that it pursues
its investment objective primarily by allocating its investments among other
mutual funds (the "Underlying Funds") offered by Nationwide Advisory Services,
Inc. ("NAS") and other leading mutual fund providers.
The following is a summary of the Trust's significant accounting policies:
a) SECURITIES VALUATION -- Shares of open-end management investment companies
(underlying funds) in which the Portfolios invest are valued at their
respective net asset values as determined under the Investment Company Act of
1940. The securities in the underlying funds are valued as of the close of
business of the regular session of trading on the New York Stock exchange
(currently 4:00 p.m., Eastern time). Underlying funds value securities in
their portfolios for which market quotations are readily available at their
current market value (generally the last reported sale price) and all other
securities and assets at fair value pursuant to methods established in good
faith by the Board of Trustees or Directors of the underlying mutual fund.
The Nationwide fixed contract is valued at par value each day. The par value
is calculated each day by the summation of the following factors: prior day's
par value, prior day's interest accrued (par multiplied by guaranteed fixed
rate), and current day purchase (redemption).
b) SHARE VALUATION -- The net asset value per share of each Portfolio is
calculated daily by dividing the total value of that Portfolio's assets, less
liabilities, by the number of shares outstanding, rounded to the nearest
cent. The offering and redemption price per share of each Portfolio are equal
to the net asset value per share.
c) SECURITY TRANSACTIONS -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis.
d) FEDERAL INCOME TAXES -- The Trust's policy is to comply with the requirements
of the Internal Revenue Code that are applicable to regulated investment
companies and to distribute all its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Each Portfolio is
treated as a separate taxable entity.
e) INVESTMENT INCOME -- Dividend income is recorded on the ex-dividend date. For
financial reporting purposes, the Portfolios record distributions of
short-term and long-term capital gains made by mutual funds in which the
Portfolios invest as realized gains.
f) DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders arising from
each Portfolio's net investment income and net realized capital gains, if
any, are distributed at least once each year. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
12 NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT
<PAGE> 15
NATIONWIDE ASSET ALLOCATION TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
g) ESTIMATES -- The preparation of financial statements in conformity with
generally accepted accounting principle requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 2 -- RELATED PARTY TRANSACTIONS
NAS, an affiliated company, serves as the Portfolios' investment adviser. Under
the terms of the investment advisory agreement, NAS oversees the investment of
the assets for the Portfolios and supervises its daily business affairs. Each of
the Portfolios will incur a management fee of 0.50% of average daily net assets.
Under the Investment Advisory Agreement with each Portfolio, NAS will bear all
expenses of each Portfolio other than the management fee and any extraordinary
expenses.
Nationwide Investors Services, Inc. ("NISI") acts as transfer and dividend
disbursing agent for the Portfolios. NISI is a wholly owned subsidiary of NAS.
Nationwide Life Insurance Company is the underwriter of the Nationwide Fixed
Contract.
NAS is a subsidiary of Nationwide Life Insurance Company.
NOTE 3 -- BANK LOANS
The Trust has an unsecured bank line of credit of $10 million. Borrowing under
this arrangement bears interest at the federal funds rate plus 0.50%. No
compensating balances are required.
NOTE 4 -- INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding fixed income securities) for the
six months ended June 30, 1998 are summarized as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------- --------
<S> <C> <C>
Aggressive Portfolio..................................... $4,599,170 $259,639
Moderately Aggressive Portfolio.......................... 2,328,311 177,945
Moderate Portfolio....................................... 1,409,076 100,890
Moderately Conservative Portfolio........................ 682,771 88,951
Conservative Portfolio................................... 749,767 407,312
</TABLE>
Net unrealized appreciation (depreciation) on investments at June 30, 1998,
based on cost for federal income tax purposes, was as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION (DEPRECIATION) APPRECIATION
------------ -------------- --------------
<S> <C> <C> <C>
Aggressive Portfolio..................... $142,971 $(13,213) $129,758
Moderately Aggressive Portfolio.......... 66,428 (4,557) 61,871
Moderate Portfolio....................... 20,960 (6,747) 14,213
Moderately Conservative Portfolio........ 6,880 (1,393) 5,487
Conservative Portfolio................... 2,361 (278) 2,083
</TABLE>
NATIONWIDE ASSET ALLOCATION TRUST SEMI-ANNUAL REPORT 13
