<PAGE> 1
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NATIONWIDE ASSET ALLOCATION TRUST
ANNUAL REPORT
DECEMBER 31, 1999
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<PAGE> 2
NATIONWIDE ASSET ALLOCATION TRUST
ANNUAL REPORT
DECEMBER 31, 1999
TABLE OF CONTENTS
<TABLE>
<S> <C>
Report of Independent Accountants........................... 1
Statements of Investments:
Aggressive Portfolio................................... 2
Moderately Aggressive Portfolio........................ 3
Moderate Portfolio..................................... 4
Moderately Conservative Portfolio...................... 5
Conservative Portfolio................................. 6
Statements of Assets and Liabilities........................ 7
Statements of Operations.................................... 8
Statements of Changes in Net Assets......................... 9
Financial Highlights........................................ 12
Notes to Financial Statements............................... 15
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of the
Nationwide Asset Allocation Trust:
In our opinion, the accompanying statements of assets and liabilities, including
the statements of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Aggressive Portfolio, the
Moderately Aggressive Portfolio, the Moderate Portfolio, the Moderately
Conservative Portfolio and the Conservative Portfolio (separate portfolios
constituting the Nationwide Asset Allocation Trust, hereafter referred to as the
"Trust") at December 31, 1999, the results of each of their operations for the
year then ended and the changes in each of their net assets and the financial
highlights for the year then ended and the period January 20, 1998 (commencement
of operations) through December 31, 1998, in conformity with accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Trust's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at December
31, 1999 by correspondence with the custodian and the mutual funds in which the
Trust invests, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Columbus, Ohio
February 17, 2000
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 1
<PAGE> 4
NATIONWIDE ASSET ALLOCATION TRUST
AGGRESSIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (100.0%)
AGGRESSIVE GROWTH (40.3%)
100,374 Nationwide Separate Account
Trust -- Nationwide Small
Company Fund* $ 2,219,261
20,831 Oppenheimer Capital Appreciation
Fund Class A 1,116,752
16,970 Oppenheimer Discovery Fund Class
A 1,113,602
-----------
4,449,615
-----------
GROWTH (39.8%)
21,016 American Century Equity Growth
Fund 551,248
11,679 Dreyfus Appreciation Fund, Inc. 534,100
12,141 Federated Stock Trust 438,035
25,571 MAS Equity Portfolio Adviser
Class 442,373
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
GROWTH (CONTINUED)
59,662 Nationwide Separate Account
Trust -- Capital Appreciation
Fund* $ 1,533,904
9,045 Strong Schafer Value Fund 443,855
15,033 Warburg Pincus Capital
Appreciation Fund 441,073
-----------
4,384,588
-----------
GROWTH & INCOME (19.9%)
14,613 Nationwide Fund Class D* 438,384
136,791 Nationwide S&P 500 Index Fund
Local Fund Shares* 1,755,032
-----------
2,193,416
-----------
TOTAL INVESTMENTS $11,027,619
===========
(cost $9,389,385)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $9,518,910.
Portfolio holding percentages represent market value as a percentage of net
assets at December 31, 1999.
*Investment in affiliate.
See accompanying notes to financial statements.
2 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 5
NATIONWIDE ASSET ALLOCATION TRUST
MODERATELY AGGRESSIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (90.2%)
AGGRESSIVE GROWTH (30.5%)
70,215 Nationwide Separate Account
Trust -- Nationwide Small
Company Fund* $ 1,552,458
13,467 Oppenheimer Capital Appreciation
Fund Class A 721,967
12,675 Oppenheimer Discovery Fund Class
A 831,745
-----------
3,106,170
-----------
GROWTH (30.0%)
15,445 American Century Equity Growth
Fund 405,128
8,806 Dreyfus Appreciation Fund, Inc. 402,702
11,438 Federated Stock Trust 412,684
17,669 MAS Equity Portfolio Adviser
Class 305,677
39,293 Nationwide Separate Account
Trust -- Capital Appreciation
Fund* 1,010,206
4,107 Strong Schafer Value Fund 201,532
10,775 Warburg Pincus Capital
Appreciation Fund 316,125
-----------
3,054,054
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
GROWTH & INCOME (19.9%)
13,639 Nationwide Fund Class D* $ 409,173
125,784 Nationwide S&P 500 Index Fund
Local Fund Shares* 1,613,810
-----------
2,022,983
-----------
INCOME (9.8%)
104,106 Nationwide Separate Account
Trust -- Nationwide Income Fund* 999,419
-----------
TOTAL MUTUAL FUNDS 9,182,626
-----------
(cost $8,028,299)
- ---------
PRINCIPAL
- ---------
FIXED INCOME (9.8%)
$1,005,668 Nationwide Fixed Contract,
5.15%* 1,005,668
-----------
(cost $1,005,668)
TOTAL INVESTMENTS $10,188,294
===========
(cost $9,033,967)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $9,115,123.
Portfolio holding percentages represent market value as a percentage of net
assets at December 31, 1999.
The Nationwide Fixed Contract rate changes quarterly.
*Investment in affiliate.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 3
<PAGE> 6
NATIONWIDE ASSET ALLOCATION TRUST
MODERATE PORTFOLIO
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (90.2%)
AGGRESSIVE GROWTH (20.3%)
44,700 Nationwide Separate Account
Trust -- Nationwide Small
Company Fund* $ 988,310
9,247 Oppenheimer Capital Appreciation
Fund Class A 495,712
7,585 Oppenheimer Discovery Fund Class
A 497,753
-----------
1,981,775
-----------
GROWTH (20.2%)
10,899 American Century Equity Growth
Fund 285,878
4,155 Dreyfus Appreciation Fund, Inc. 190,005
5,290 Federated Stock Trust 190,855
11,319 MAS Equity Portfolio Adviser
Class 195,824
26,480 Nationwide Separate Account
Trust -- Capital Appreciation
Fund* 680,790
4,165 Strong Schafer Value Fund 204,371
7,453 Warburg Pincus Capital
Appreciation Fund 218,685
-----------
1,966,408
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
GROWTH & INCOME (29.9%)
19,524 Nationwide Fund Class D* $ 585,733
181,418 Nationwide S&P 500 Index Fund
Local Fund Shares* 2,327,589
-----------
2,913,322
-----------
INCOME (19.8%)
201,156 Nationwide Separate Account
Trust -- Nationwide Income Fund* 1,931,101
-----------
TOTAL MUTUAL FUNDS 8,792,606
-----------
(cost $7,904,597)
- ---------
PRINCIPAL
- ---------
FIXED INCOME (9.8%)
$ 962,566 Nationwide Fixed Contract,
5.15%* 962,566
-----------
(cost $962,566)
TOTAL INVESTMENTS $ 9,755,172
===========
(cost $8,867,163)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $8,919,293.
Portfolio holding percentages represent market value as a percentage of net
assets at December 31, 1999.
The Nationwide Fixed Contract rate changes quarterly.
*Investment in affiliate.
See accompanying notes to financial statements.
4 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 7
NATIONWIDE ASSET ALLOCATION TRUST
MODERATELY CONSERVATIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (80.0%)
AGGRESSIVE GROWTH (10.3%)
8,741 Nationwide Separate Account
Trust -- Nationwide Small
Company Fund* $ 193,253
1,431 Oppenheimer Capital Appreciation
Fund Class A 76,714
1,815 Oppenheimer Discovery Fund Class
A 119,095
-----------
389,062
-----------
GROWTH (10.1%)
2,907 American Century Equity Growth
Fund 76,256
846 Dreyfus Appreciation Fund, Inc. 38,672
1,082 Federated Stock Trust 39,045
2,259 MAS Equity Portfolio Adviser
Class 39,075
7,352 Nationwide Separate Account
Trust -- Capital Appreciation
Fund* 189,023
-----------
382,071
-----------
GROWTH & INCOME (29.9%)
7,629 Nationwide Fund Class D* 228,866
70,323 Nationwide S&P 500 Index Fund
Local Fund Shares* 902,243
-----------
1,131,109
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
INCOME (29.7%)
117,017 Nationwide Separate Account
Trust -- Nationwide Income Fund* $ 1,123,365
-----------
TOTAL MUTUAL FUNDS 3,025,607
-----------
(cost $2,866,847)
- ---------
PRINCIPAL
- ---------
FIXED INCOME (20.0%)
$ 758,981 Nationwide Fixed Contract,
5.15%* 758,981
-----------
(cost $758,981)
TOTAL INVESTMENTS $ 3,784,588
===========
(cost $3,625,828)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $3,646,607.
Portfolio holding percentages represent market value as a percentage of net
assets at December 31, 1999.
The Nationwide Fixed Contract rate changes quarterly.
*Investment in affiliate.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 5
<PAGE> 8
NATIONWIDE ASSET ALLOCATION TRUST
CONSERVATIVE PORTFOLIO
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MUTUAL FUNDS (76.1%)
GROWTH (10.4%)
1,389 American Century Equity Growth
Fund $ 36,436
756 Dreyfus Appreciation Fund, Inc. 34,568
993 Federated Stock Trust 35,841
1,905 MAS Equity Portfolio Adviser
Class 32,965
6,502 Nationwide Separate Account
Trust -- Capital Appreciation
Fund* 167,156
739 Strong Schafer Value Fund 36,279
-----------
343,245
-----------
GROWTH & INCOME (20.3%)
4,623 Nationwide Fund Class D* 138,692
41,339 Nationwide S&P 500 Index Fund
Local Fund Shares* 530,384
-----------
669,076
-----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
SHARES SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
INCOME (45.4%)
155,472 Nationwide Separate Account
Trust -- Nationwide Income Fund* $ 1,492,518
-----------
TOTAL MUTUAL FUNDS 2,504,839
-----------
(cost $2,533,615)
- ---------
PRINCIPAL
- ---------
FIXED INCOME (25.2%)
$ 831,259 Nationwide Fixed Contract,
5.15%* 831,259
-----------
(cost $831,259)
TOTAL INVESTMENTS $ 3,336,098
===========
(cost $3,364,875)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $3,401,493.
Portfolio holding percentages represent market value as a percentage of net
assets at December 31, 1999.
The Nationwide Fixed Contract rate changes quarterly.
*Investment in affiliate.
See accompanying notes to financial statements.
6 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 9
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<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 $9,389,385, $9,033,967,
$8,867,163, $3,625,828, and
$3,364,875, respectively) $11,027,619 $10,188,294 $9,755,172 $3,784,588 $3,336,098
Interest receivable -- 142 136 108 118
----------- ----------- ---------- ---------- ----------
Total assets 11,027,619 10,188,436 9,755,308 3,784,696 3,336,216
----------- ----------- ---------- ---------- ----------
LIABILITIES
Cash overdraft -- -- -- -- 42,852
Management fee payable 4,423 4,059 3,965 1,545 1,440
----------- ----------- ---------- ---------- ----------
Total liabilities 4,423 4,059 3,965 1,545 44,292
----------- ----------- ---------- ---------- ----------
NET ASSETS $11,023,196 $10,184,377 $9,751,343 $3,783,151 $3,291,924
=========== =========== ========== ========== ==========
REPRESENTED BY:
Capital $ 8,773,777 $ 8,568,327 $8,462,523 $3,462,942 $3,192,176
Net unrealized appreciation
(depreciation) on investments 1,638,234 1,154,327 888,009 158,760 (28,777)
Accumulated undistributed realized
gain on investments 425,295 305,270 276,263 123,487 95,892
Accumulated undistributed net
investment income 185,890 156,453 124,548 37,962 32,633
----------- ----------- ---------- ---------- ----------
NET ASSETS $11,023,196 $10,184,377 $9,751,343 $3,783,151 $3,291,924
=========== =========== ========== ========== ==========
Shares of beneficial interest
outstanding, (unlimited number of
shares authorized) 785,764 764,562 757,407 315,144 301,098
=========== =========== ========== ========== ==========
NET ASSET VALUE, offering and
redemption price per share $ 14.03 $ 13.32 $ 12.87 $ 12.00 $ 10.93
=========== =========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 7
<PAGE> 10
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATELY MODERATELY
AGGRESSIVE AGGRESSIVE MODERATE CONSERVATIVE CONSERVATIVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest $ -- $ 39,992 $ 40,982 $ 34,173 $ 46,047
Dividends 37,719 60,626 97,784 51,483 75,105
---------- ---------- ---------- -------- --------
Total income 37,719 100,618 138,766 85,656 121,152
---------- ---------- ---------- -------- --------
EXPENSES:
Management Fee 41,473 35,081 35,943 14,978 16,045
---------- ---------- ---------- -------- --------
NET INVESTMENT INCOME (LOSS) (3,754) 65,537 102,823 70,678 105,107
---------- ---------- ---------- -------- --------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 636,496 468,195 398,443 162,108 112,537
Net change in unrealized appreciation
(depreciation) on investments 1,428,865 981,409 668,125 74,393 (81,945)
---------- ---------- ---------- -------- --------
NET REALIZED AND UNREALIZED GAIN 2,065,361 1,449,604 1,066,568 236,501 30,592
---------- ---------- ---------- -------- --------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $2,061,607 $1,515,141 $1,169,391 $307,179 $135,699
========== ========== ========== ======== ========
</TABLE>
See accompanying notes to financial statements.
8 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 11
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE PORTFOLIO MODERATELY AGGRESSIVE PORTFOLIO
---------------------------------------- ----------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998(1) DECEMBER 31, 1999 DECEMBER 31, 1998(1)
----------------- -------------------- ----------------- --------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (3,754) $ 5,904 $ 65,537 $ 27,244
Net realized gain on investments 636,496 261,426 468,195 126,151
Net change in unrealized
appreciation of investments 1,428,865 209,369 981,409 172,918
----------- ---------- ----------- ----------
Net increase in net assets
resulting from operations 2,061,607 476,699 1,515,141 326,313
----------- ---------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (5,032) (853) (54,946) (15,070)
From net realized gain from
investment transactions (283,002) -- (155,388) --
----------- ---------- ----------- ----------
Decrease in net assets from
distributions to shareholders (288,034) (853) (210,334) (15,070)
----------- ---------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 4,042,247 6,869,107 5,268,161 4,969,052
Net asset value of shares issued
to shareholders from
reinvestment of distributions 288,034 853 210,334 15,070
Cost of shares redeemed (1,953,837) (472,627) (1,227,178) (667,112)
----------- ---------- ----------- ----------
Increase in net assets from
capital share transactions 2,376,444 6,397,333 4,251,317 4,317,010
----------- ---------- ----------- ----------
NET INCREASE IN NET ASSETS 4,150,017 6,873,179 5,556,124 4,628,253
NET ASSETS-BEGINNING OF PERIOD 6,873,179 -- 4,628,253 --
----------- ---------- ----------- ----------
NET ASSETS-END OF PERIOD $11,023,196 $6,873,179 $10,184,377 $4,628,253
=========== ========== =========== ==========
Undistributed net realized gain on
investments $ 425,295 $ 261,426 $ 305,270 $ 126,151
=========== ========== =========== ==========
Undistributed net investment income $ 185,890 $ 5,051 $ 156,453 $ 12,174
=========== ========== =========== ==========
SHARE ACTIVITY:
Shares sold 341,255 627,533 451,761 461,292
Reinvestment of distributions 25,580 75 18,623 1,444
Shares redeemed (164,463) (44,216) (105,288) (63,270)
----------- ---------- ----------- ----------
Net increase in number of shares 202,372 583,392 365,096 399,466
=========== ========== =========== ==========
</TABLE>
- ---------------
(1) For the period January 20, 1998 (commencement of operations) through
December 31, 1998.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 9
<PAGE> 12
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATE PORTFOLIO MODERATELY CONSERVATIVE PORTFOLIO
---------------------------------------- ----------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998(1) DECEMBER 31, 1999 DECEMBER 31, 1998(1)
----------------- -------------------- ----------------- --------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 102,823 $ 30,436 $ 70,678 $ 23,297
Net realized gain on investments 398,443 63,600 162,108 13,352
Net change in unrealized
appreciation of investments 668,125 219,884 74,393 84,367
----------- ---------- ----------- ----------
Net increase in net assets
resulting from operations 1,169,391 313,920 307,179 121,016
----------- ---------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (85,557) (15,743) (61,379) (12,988)
From net realized gain from
investment transactions (93,191) -- (33,619) --
----------- ---------- ----------- ----------
Decrease in net assets from
distributions to shareholders (178,748) (15,743) (94,998) (12,988)
----------- ---------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 5,368,173 4,516,176 2,767,849 2,404,492
Net asset value of shares issued
to shareholders from
reinvestment of distributions 178,748 15,743 94,998 12,988
Cost of shares redeemed (1,133,702) (482,615) (1,215,788) (601,597)
----------- ---------- ----------- ----------
Increase in net assets from
capital share transactions 4,413,219 4,049,304 1,647,059 1,815,883
----------- ---------- ----------- ----------
NET INCREASE IN NET ASSETS 5,403,862 4,347,481 1,859,240 1,923,911
NET ASSETS-BEGINNING OF PERIOD 4,347,481 -- 1,923,911 --
----------- ---------- ----------- ----------
NET ASSETS-END OF PERIOD $ 9,751,343 $4,347,481 $ 3,783,151 $1,923,911
=========== ========== =========== ==========
Undistributed net realized gain on
investments $ 276,263 $ 63,600 $ 123,487 $ 13,352
=========== ========== =========== ==========
Undistributed net investment income $ 124,548 $ 14,693 $ 37,962 $ 10,309
=========== ========== =========== ==========
SHARE ACTIVITY:
Shares sold 462,291 420,709 244,386 225,532
Reinvestment of distributions 15,629 1,530 8,459 1,251
Shares redeemed (96,631) (46,121) (107,530) (56,954)
----------- ---------- ----------- ----------
Net increase in number of shares 381,289 376,118 145,315 169,829
=========== ========== =========== ==========
</TABLE>
- ---------------
(1) For the period January 20, 1998 (commencement of operations) through
December 31, 1998.
See accompanying notes to financial statements.
10 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 13
NATIONWIDE ASSET ALLOCATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONSERVATIVE PORTFOLIO
----------------------------------------
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998(1)
----------------- --------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 105,107 $ 24,152
Net realized gain on investments 112,537 18,612
Net change in unrealized appreciation (depreciation) of
investments (81,945) 53,168
----------- -----------
Net increase in net assets resulting from operations 135,699 95,932
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (92,859) (11,175)
From net realized gain from investment transactions (27,849) --
----------- -----------
Decrease in net assets from distributions to
shareholders (120,708) (11,175)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 3,743,592 2,821,049
Net asset value of shares issued to shareholders from
reinvestment of distributions 120,708 11,175
Cost of shares redeemed (2,401,616) (1,102,732)
----------- -----------
Increase in net assets from capital share transactions 1,462,684 1,729,492
----------- -----------
NET INCREASE IN NET ASSETS 1,477,675 1,814,249
NET ASSETS-BEGINNING OF PERIOD 1,814,249 --
----------- -----------
NET ASSETS-END OF PERIOD $ 3,291,924 $ 1,814,249
=========== ===========
Undistributed net realized gain on investments $ 95,892 $ 18,612
=========== ===========
Undistributed net investment income $ 32,633 $ 12,977
=========== ===========
SHARE ACTIVITY:
Shares sold 344,677 268,867
Reinvestment of distributions 11,170 1,072
Shares redeemed (219,614) (105,074)
----------- -----------
Net increase in number of shares 136,233 164,865
=========== ===========
</TABLE>
- ---------------
(1) For the period January 20, 1998 (commencement of operations) through
December 31, 1998.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 11
<PAGE> 14
NATIONWIDE ASSET ALLOCATION TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE PORTFOLIO MODERATELY AGGRESSIVE PORTFOLIO
---------------------------------------- ----------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998(1) DECEMBER 31, 1999 DECEMBER 31, 1998(1)
----------------- -------------------- ----------------- --------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ 11.78 $10.00 $ 11.59 $10.00
------- ------ ------- ------
Net investment income (loss) (0.01) 0.01 0.09 0.10
Net realized gain and
unrealized appreciation 2.74 1.78 2.07 1.56
------- ------ ------- ------
Total from investment
operations 2.73 1.79 2.16 1.66
------- ------ ------- ------
Distributions from net
investment income (0.01) (0.01) (0.09) (0.07)
Distributions from net
realized gains (0.47) -- (0.34) --
------- ------ ------- ------
Total distributions (0.48) (0.01) (0.43) (0.07)
------- ------ ------- ------
Net increase in net asset
value 2.25 1.78 1.73 1.59
------- ------ ------- ------
NET ASSET VALUE -- END OF PERIOD $ 14.03 $11.78 $ 13.32 $11.59
======= ====== ======= ======
Total return* 24.19% 17.85% 19.34% 16.61%
Ratios and supplemental data:
Net assets end of period
(000's) $11,023 $6,873 $10,184 $4,628
Ratio of expense to average
net assets* 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income
(loss) to average net
assets * (0.05)% 0.16% 0.93% 1.16%
Portfolio Turnover* 29.81% 38.42% 25.88% 52.63%
</TABLE>
- ---------------
* Ratios are annualized for periods of less than one year. Total return and
portfolio turnover are not annualized.
(1) For the period January 20, 1998 (commencement of operations) through
December 31, 1998.
See accompanying notes to financial statements.
12 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 15
NATIONWIDE ASSET ALLOCATION TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODERATE PORTFOLIO MODERATELY CONSERVATIVE PORTFOLIO
---------------------------------------- ----------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998(1) DECEMBER 31, 1999 DECEMBER 31, 1998(1)
----------------- -------------------- ----------------- --------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $11.56 $10.00 $11.33 $10.00
------ ------ ------ ------
Net investment income 0.14 0.14 0.24 0.22
Net realized gain and
unrealized appreciation 1.53 1.53 0.84 1.27
------ ------ ------ ------
Total from investment
operations 1.67 1.67 1.08 1.49
------ ------ ------ ------
Distributions from net
investment income (0.14) (0.11) (0.24) (0.16)
Distributions from net
realized gains (0.22) -- (0.17) --
------ ------ ------ ------
Total distributions (0.36) (0.11) (0.41) (0.16)
------ ------ ------ ------
Net increase in net asset
value 1.31 1.56 0.67 1.33
------ ------ ------ ------
NET ASSET VALUE -- END OF PERIOD $12.87 $11.56 $12.00 $11.33
====== ====== ====== ======
Total return* 14.89% 16.74% 9.80% 14.97%
Ratios and supplemental data:
Net assets end of period
(000's) $9,751 $4,347 $3,783 $1,924
Ratio of expense to average
net assets* 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income
to average net assets * 1.43% 1.83% 2.36% 2.79%
Portfolio Turnover* 25.63% 55.92% 50.16% 104.85%
</TABLE>
- ---------------
* Ratios are annualized for periods of less than one year. Total return and
portfolio turnover are not annualized.
(1) For the period January 20, 1998 (commencement of operations) through
December 31, 1998.
See accompanying notes to financial statements.
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 13
<PAGE> 16
NATIONWIDE ASSET ALLOCATION TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONSERVATIVE PORTFOLIO
-----------------------------------------
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998(1)
----------------- --------------------
<S> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $11.00 $10.00
------ ------
Net investment income 0.33 0.30
Net realized gain and unrealized appreciation 0.07 0.92
------ ------
Total from investment operations 0.40 1.22
------ ------
Distributions from net investment income (0.32) (0.22)
Distributions from net realized gains (0.15) --
------ ------
Total distributions (0.47) (0.22)
------ ------
Net increase (decrease) in net asset value (0.07) 1.00
------ ------
NET ASSET VALUE -- END OF PERIOD $10.93 $11.00
====== ======
Total return* 3.77% 12.33%
Ratios and supplemental data:
Net assets end of period (000's) $3,292 $1,814
Ratio of expense to average net assets* 0.50% 0.50%
Ratio of net investment income to average net assets* 3.27% 3.60%
Portfolio Turnover* 84.11% 165.15%
</TABLE>
- ---------------
* Ratios are annualized for periods of less than one year. Total return and
portfolio turnover are not annualized.
(1) For the period January 20, 1998 (commencement of operations) through
December 31, 1998.
See accompanying notes to financial statements.
14 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 17
NATIONWIDE ASSET ALLOCATION TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION
Nationwide Asset Allocation Trust (the "Trust") is an open-end management
investment company organized under the laws of the State of Ohio as a business
trust by a Declaration of Trust dated as of September 9, 1997. The Trust
currently offers shares in five separate nondiversified funds (collectively the
"Life Design Series" or each, a "Portfolio"), each of which is a separately
managed portfolio with its own investment objectives and policies. These
Portfolios are the Aggressive Portfolio, the Moderately Aggressive Portfolio,
the Moderate 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 each Portfolio 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") advised by Villanova Mutual Fund Capital
Trust ("VMF"), an affiliate of Villanova SA Capital Trust, the investment
adviser to the Trust, and funds offered by other leading mutual fund providers.
Percentages of the Portfolios' investments in Underlying Funds advised by VMF
are summarized as follows:
<TABLE>
<S> <C>
Aggressive Portfolio........................................ 53.9%
Moderately Aggressive Portfolio............................. 54.8%
Moderate Portfolio.......................................... 66.8%
Moderately Conservative Portfolio........................... 69.7%
Conservative Portfolio...................................... 70.7%
</TABLE>
Percentages represent market value as a percentage of net assets at December 31,
1999.
In addition, each of the portfolios (except the Aggressive Portfolio) will
invest in the Nationwide Fixed Contract. The Nationwide Fixed Contract is a
fixed interest contract issued and guaranteed by Nationwide Life Insurance
Company.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Trust's significant accounting policies:
a) SECURITIES VALUATION -- Shares of 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 generally 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 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 net purchase or
redemption.
b) SHARE VALUATION -- The net asset value per share of each Portfolio is
calculated daily by dividing the total value of the 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.
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 15
<PAGE> 18
NATIONWIDE ASSET ALLOCATION TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
c) SECURITY TRANSACTIONS -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis. Dividend
and capital gain income is recorded on the ex-dividend date. Interest income
for the Fixed Contract is accrued daily and reinvested the following day.
d) FEDERAL INCOME TAXES -- Each Portfolio'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 the Underlying Funds 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 federal income
tax regulations, which may differ from generally accepted accounting
principles. These "book/tax" differences are considered either permanent or
temporary in nature. To the extent that these differences are permanent in
nature, such amounts are reclassified within the capital accounts based on
their nature for federal income tax purposes; temporary differences do not
require reclassification. Dividends and distributions that exceed net
investment income and net realized gains for financial reporting purposes but
not for tax purposes are reported as dividends in excess of net investment
income and net realized gains. To the extent distributions exceed current and
accumulated earnings and profits for federal income tax purposes, they are
reported as distributions of paid-in-capital.
Accordingly, as of December 31, 1999, the capital accounts have been adjusted
by the following amounts:
<TABLE>
<CAPTION>
UNDISTRIBUTED
NET INVESTMENT UNDISTRIBUTED
INCOME NET REALIZED GAIN
-------------- -----------------
<S> <C> <C>
Aggressive Portfolio............................. $189,625 $(189,625)
Moderately Aggressive Portfolio.................. 133,688 (133,688)
Moderate Portfolio............................... 92,589 (92,589)
Moderately Conservative Portfolio................ 18,354 (18,354)
Conservative Portfolio........................... 7,408 (7,408)
</TABLE>
g) ESTIMATES -- 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 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 3 -- RELATED PARTY TRANSACTIONS
On September 1, 1999, Villanova SA Capital Trust ("VSA") replaced Nationwide
Advisory Services, Inc. (NAS), an affiliated company, as the Portfolios'
investment adviser and administrator. Under the terms of the Investment Advisory
and Administration Agreement, VSA oversees the investment of the assets for the
Portfolios and supervises their daily business affairs. Each of the Portfolios
incurs a management fee of 0.50% of its average daily net assets. Under the
Investment Advisory and Administration Agreement with the Trust, VSA will bear
all expenses of each Portfolio, other than the management fee and any
extraordinary expenses.
16 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
<PAGE> 19
NATIONWIDE ASSET ALLOCATION TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
Nationwide Investors Services, Inc. ("NIS"), a subsidiary of VSA, serves as
transfer and dividend disbursing agent for the Portfolios. NIS is compensated by
VSA under the agreement noted above.
Nationwide Life Insurance Company is the underwriter of the Nationwide Fixed
Contract.
As stated above, on September 1, 1999, NAS was replaced by VSA as an investment
advisor and administrator. Management fees paid by the Portfolios prior to that
date were paid to NAS. After September 1, 1999, management fees were paid to
VSA. The information provided in this report relates to the total management
fees paid by the Portfolios for the year ended December 31, 1999.
Also on September 1, 1999, VSA entered into an agreement with BISYS Fund
Services, Ohio, Inc., to provide sub-administration and sub-transfer agent
services to each of the Portfolios.
The following interest earned, dividend income, and capital gain distributions
are for the year ended December 31, 1999. Dividend income and capital gain
distributions are from Nationwide Mutual Funds and Nationwide Separate Account
Trust Funds (collectively, "Nationwide Funds").
<TABLE>
<CAPTION>
CAPITAL GAIN
INTEREST DIVIDEND DISTRIBUTIONS
EARNED ON THE INCOME FROM FROM
NATIONWIDE NATIONWIDE NATIONWIDE
FIXED CONTRACT FUNDS FUNDS
-------------- ----------- -------------
<S> <C> <C> <C>
Aggressive Portfolio.................... $ -- $22,976 $215,632
Moderately Aggressive Portfolio......... 39,992 50,883 154,222
Moderate Portfolio...................... 40,982 91,164 124,429
Moderately Conservative Portfolio....... 34,173 50,419 36,505
Conservative Portfolio.................. 46,047 73,858 22,735
</TABLE>
NOTE 4 -- 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. There were no outstanding loans throughout
the year.
NOTE 5 -- INVESTMENT TRANSACTIONS
Purchases and sales of registered investment companies for the year ended
December 31, 1999 are summarized as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------- ----------
<S> <C> <C>
Aggressive Portfolio.................................. $5,091,710 $2,481,483
Moderately Aggressive Portfolio....................... 5,568,304 1,641,853
Moderate Portfolio.................................... 5,719,306 1,657,893
Moderately Conservative Portfolio..................... 2,502,335 1,199,668
Conservative Portfolio................................ 3,131,199 1,994,094
</TABLE>
NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT 17
<PAGE> 20
NATIONWIDE ASSET ALLOCATION TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments at December 31, 1999,
based on cost for federal income tax purposes, was as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------ -------------- --------------
<S> <C> <C> <C>
Aggressive Portfolio.................. $1,689,925 $(181,216) $1,508,709
Moderately Aggressive Portfolio....... 1,236,954 (163,783) 1,073,171
Moderate Portfolio.................... 1,008,995 (173,116) 835,879
Moderately Conservative Portfolio..... 206,645 (68,664) 137,981
Conservative Portfolio................ 21,770 (87,165) (65,395)
</TABLE>
NOTE 6 -- FEDERAL TAX INFORMATION (UNAUDITED):
The accompanying table below details distributions from long-term capital gains
for the following Portfolios for the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Aggressive Portfolio........................................ $175,059
Moderately Aggressive Portfolio............................. 93,002
Moderate Portfolio.......................................... 58,541
Moderately Conservative Portfolio........................... 14,161
Conservative Portfolio...................................... 8,846
</TABLE>
18 NATIONWIDE ASSET ALLOCATION TRUST ANNUAL REPORT
