<PAGE> 1
[PICTURE]
Annual Report 99
Nationwide Family of Funds
Nationwide
Family of Funds
<PAGE> 2
Message to Shareholders October 31, 1999
[PICTURE]
Left:
Dimon R. McFerson
Right:
Joseph J. Gasper
Seated:
Paul J. Hondros
Solid asset management expertise and quality investment choices are
among the key reasons that investors choose the Nationwide Family of Funds. In
1999, we expanded our ability to deliver both.
Amidst continued strong momentum in our mutual fund asset management
business and growing demands from investors for mutual funds and other financial
products, Nationwide Financial announced, in February 1999, the formation of a
new asset management company, Villanova Capital.
Villanova Capital combines the solid mutual fund investment management
capabilities previously available through Nationwide Advisory Services with the
stable value investment expertise provided by another Nationwide Financial
Company, Morley Financial Services, Inc. These two organizations come together
to form a $22 billion asset management stronghold, uniquely positioned for
future growth.
We expect to achieve that future growth through selected acquisitions
of small- to mid-sized institutional investment firms. In addition, we
anticipate hiring key portfolio managers with strong performance records.
Finally, we have already made significant progress in building a leadership team
that includes business and industry experts from top U.S. financial
organizations.
Our shareholders, in turn, can expect to see increased portfolio
management capabilities, expanded investment choice, and technologically
innovative tools and support services.
YEAR IN REVIEW
Stock mutual funds in the Nationwide Family finished the 12-month
period ended October 31, 1999, trailing their respective benchmarks. These
disappointing returns came amidst continued momentum in the stock market, which
was bolstered by an improved global economic outlook. U.S. equities, as measured
by the unmanaged Wilshire 5000 Index (a widely followed indicator of broad stock
market trends), surged +26.9%. The unmanaged S&P 500 Index (an indicator of
trends among large "blue-chip" stocks) climbed +25.7%.
Select stocks held by our equity funds turned in spectacular
performances. However, their strong individual showings did not outweigh an
across-the-board tendency by our managers to avoid unproven technology issues.
In an environment in which a few "hot" technology stocks (particularly
internet companies that, in many cases, have no reportable earnings) have
dominated the market, our equity managers have chosen to tune out the "hype,"
focusing instead on companies with sustainable competitive performance records.
This was a conscious decision that we believe will benefit our investors in the
long run.
In the bond market, a precipitous rise in interest rates resulted in
the weakest performance witnessed by investors since 1994. For the 12 months
ended October 31, 1999, the Lehman Brothers Aggregate Bond Index (a widely
followed indicator of broad bond market trends) inched up just +0.53%.
Fixed income funds in the Nationwide Family stayed within tight range
(150 basis points) of their benchmarks. However, both the funds and their
respective benchmarks produced negative absolute returns.
PORTFOLIO MANAGEMENT
As we start the new fiscal year, we will keep a strong focus on
investment quality. Our tenured team of fund managers will continue to seek
competitive performance in all asset categories--emphasizing the importance of
delivering what we promise to investors. We intend to stay true to each fund's
stated objective and strategy, focusing our efforts on achieving above-market
performance without subjecting our investors to unnecessary risks.
Our existing team of managers has built a solid foundation upon which
we will continue to build our investment management capabilities. For example,
Chuck Bath, 14-year manager of our flagship Nationwide Fund, has achieved his
solid long-term performance record without straying from his strategy of
buying--and holding--high-quality companies with proven track records.
INVESTMENT CHOICE
Investors desire choice. They also demand solutions. Over the past 12
months, we have focused on delivering both. The Prestige Advisor Series,
introduced in November 1998, offers investors the opportunity to choose from
among five mutual
<PAGE> 3
funds: three U.S. stock funds, an international stock fund, and a balanced fund.
Each of these funds is sub-advised by a nationally recognized institutional
money manager that was selected and is monitored by Villanova Capital. In 2000,
we plan to further expand our menu to include specialty portfolios offering
exposure to specific market sectors or industries--in the U.S. and abroad.
We're also committed to expanding our market reach. Two of our funds,
our flagship Nationwide Fund and the Nationwide Growth Fund, are now available
through advisors that use fund supermarkets sponsored by Fidelity Investments
Institutional Brokerage Group, TD Waterhouse Institutional Services, and Charles
Schwab Institutional OneSource. We expect to continue to expand our external
distribution capabilities to make it even easier and more convenient for
investors to gain access to our funds.
INNOVATIVE TOOLS AND SERVICES
As we enhance our asset management capabilities and product offerings,
we recognize the importance of communicating our progress to our investors as
well as to the Nationwide representatives and other financial advisors who guide
them in making sound investment decisions. We understand the value of clear,
candid information that is easy to access and regularly updated. Our goal is to
make it easy for advisors and investors to learn about our products and how they
fit within an overall financial plan.
As we move into 2000, our investors can expect to see innovative tools
designed to provide them with compelling examinations of investment topics,
including global economic trends, market and industry sectors, and portfolio
management strategies. These tools will be easily accessible via our website
(www.nationwidefunds.com) or by calling us toll-free.
THE YEAR AHEAD
Villanova Capital enters the year 2000 as a new organization poised for
growth--in our investment management capabilities, in our product offerings, and
in the tools that we provide to our investors and their advisors. As we look
ahead, we are not starting on a new mission. Rather, we are continuing to build
on the solid investment management franchise that has delivered strong returns
to our investors for decades.
/s/Dimon R. McFerson
- ------------------------------------
Dimon R. McFerson
Chairman
Chief Executive Officer
Nationwide Insurance
/s/Jospeh J. Gasper
- ------------------------------------
Joseph J. Gasper
President
Chief Operating Officer
Nationwide Financial
/s/Paul J. Hondros
- ------------------------------------
Paul J. Hondros
President
Chief Executive Officer
Villanova Capital
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1 Message to 21 Long-Term U.S. 35 Statement of Changes
Shareholders Government Bond Fund in Net Assets
2 Fund Highlights 23 Intermediate U.S. 39 Financial Highlights
Government Bond Fund
6 Mid Cap Growth Fund 47 Notes to Financial
25 Money Market Fund Statements
8 Growth Fund
29 Statement of Assets 59 Independent Auditors'
10 Nationwide Fund and Liabilities Report
13 Bond Fund 32 Statement of 61 Trustees and
Operations Officers
16 Tax-Free Income Fund
</TABLE>
<PAGE> 4
NATIONWIDE(R) STOCK FUND HIGHLIGHTS
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MID CAP GROWTH FUND
FUND PERFORMANCE-CLASS D SHARES
$10,000 Lump Sum Investment
Value of initial Value of reinvested
investment distributions
1989 $ 9,550 $ 9,550
1990 $ 7,882 $ 8,071
1991 $10,926 $11,838
1992 $11,354 $12,480
1993 $12,913 $14,300
1994 $13,769 $15,290
1995 $16,558 $18,587
1996 $17,742 $22,195
1997 $20,841 $27,446
1998 $16,047 $28,848
1999 $17,943 $32,688
The value of a long-term investment in the Mid Cap Growth Fund is illustrated in
the chart above. Over a 10-year period ended October 31, 1999, a net investment
of $10,000 would have earned an average annual compound total return of 12.57%
(including sales charge). The chart above illustrates the growth of this
investment to $32,688. Investment return and principal value will fluctuate, and
when redeemed, shares may be worth more or less than original cost. Past
performance is no guarantee of future results.
TOP FIVE HOLDINGS BY ISSUER
(Composition Subject to Change)
VALUE PORTFOLIO%
- ----------------------------------------------------
Advent Software, Inc. $1,070,225 8.90%
- ----------------------------------------------------
Capital One Financial $ 556,500 4.63%
- ----------------------------------------------------
BMC Software Inc. $ 513,500 4.27%
- ----------------------------------------------------
Concord EFS, Inc. $ 460,063 3.83%
- ----------------------------------------------------
Quaker Oats Co. $ 455,000 3.78%
- ----------------------------------------------------
GROWTH FUND
FUND PERFORMANCE- CLASS D SHARES
$10,000 Lump Sum Investment
Value of initial Value of reinvested
investment distributions
1989 $ 9,550 $ 9,550
1990 $ 7,636 $ 8,203
1991 $ 9,956 $11,758
1992 $10,341 $12,574
1993 $11,589 $14,606
1994 $11,807 $15,443
1995 $13,753 $18,688
1996 $13,878 $14,590
1997 $16,978 $27,741
1998 $16,666 $32,162
1999 $19,100 $37,651
The value of a long-term investment in the Growth Fund is illustrated in the
chart above. Over a 10-year period ended October 31, 1999, a net investment of
$10,000 would have earned an average annual compound total return of 14.18%
(including sales charge). The chart above illustrates the growth of this
investment to $37,651. Investment return and principal value will fluctuate, and
when redeemed, shares may be worth more or less than original cost. Past
performance is no guarantee of future results.
TOP FIVE HOLDINGS BY ISSUER
(Composition Subject to Change)
VALUE PORTFOLIO%
- --------------------------------------------------
MCI Worldcom, Inc. $68,650,000 6.67%
- --------------------------------------------------
EMC Corp. Mass $65,349,600 6.35%
- --------------------------------------------------
BMC Software Inc. $57,768,750 5.62%
- --------------------------------------------------
Merck & Co., Inc. $47,737,500 4.64%
- --------------------------------------------------
AXA Financial, Inc. $47,388,375 4.61%
- --------------------------------------------------
2 NATIONWIDE
<PAGE> 5
NATIONWIDE(R) STOCK AND BOND FUND HIGHLIGHTS
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NATIONWIDE FUND
FUND PERFORMANCE- CLASS D SHARES
$10,000 Lump Sum Investment
Value of initial Value of reinvested
investment distributions
1989 $ 9,550 $ 9,550
1990 $ 7,907 $ 8,879
1991 $10,121 $12,117
1992 $10,468 $13,169
1993 $10,622 $13,979
1994 $10,346 $14,661
1995 $11,135 $17,481
1996 $13,099 $22,045
1997 $17,053 $30,902
1998 $19,421 $38,852
1999 $20,923 $42,841
The value of a long-term investment in the Nationwide Fund is illustrated in the
chart above. Over a 10-year period ended October 31, 1999, a net investment of
$10,000 would have earned an average annual compound total return of 15.66%
(including sales charge). The chart above illustrates the growth of this
investment to $42,841. Investment return and principal value will fluctuate, and
when redeemed, shares may be worth more or less than original cost. Past
performance is no guarantee of future results.
TOP FIVE HOLDINGS BY ISSUER
(Composition Subject to Change)
VALUE PORTFOLIO%
- -------------------------------------------------------
Warner-Lambert Co. $208,933,163 8.22%
- -------------------------------------------------------
Schering-Plough Corp. $160,795,800 6.32%
- -------------------------------------------------------
Wells Fargo Co. $120,788,625 4.75%
- -------------------------------------------------------
Mellon Financial Corp. $119,330,287 4.69%
- -------------------------------------------------------
Black & Decker Corp. $ 94,488,200 3.72%
- -------------------------------------------------------
BOND FUND
FUND PERFORMANCE- CLASS D SHARES
$10,000 Lump Sum Investment
Value of initial Value of reinvested
investment distributions
1989 $ 9,550 $ 9,550
1990 $ 9,163 $10,109
1991 $ 9,642 $11,633
1992 $ 9,764 $12,895
1993 $10,263 $14,650
1994 $ 8,623 $13,212
1995 $ 9,683 $15,909
1996 $ 9,519 $16,712
1997 $ 9,672 $18,104
1998 $ 9,947 $19,754
1999 $ 9,265 $19,509
The value of a long-term investment in the Bond Fund is illustrated in the chart
above. Over a 10-year period ended October 31, 1999, a net investment of $10,000
would have earned an average annual compound total return of 6.91% (including
sales charge). The chart above illustrates the growth of this investment to
$19,509. Investment return and principal value will fluctuate, and when
redeemed, shares may be worth more or less than original cost. Past performance
is no guarantee of future results.
TOP FIVE HOLDINGS BY ISSUER
(Composition Subject to Change)
VALUE PORTFOLIO%
- --------------------------------------------------------------------------------
U. S. Treasury Bond, 8.125%, 08/15/19 $13,544,838 10.40%
- --------------------------------------------------------------------------------
AMBAC Inc. 9.375%, 08/01/11 $ 4,680,600 3.59%
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Armstrong World Industries, Inc. 9.75%, 04/15/08 $ 4,581,488 3.52%
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Becton Dickson, 8.70%, 01/15/25 $ 4,226,300 3.24%
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English China Clays Del. Inc. 7.375%, 10/1/02 $ 4,070,848 3.12%
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NATIONWIDE 3
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NATIONWIDE(R) BOND FUND HIGHLIGHTS
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TAX-FREE INCOME FUND
FUND PERFORMANCE CLASS D SHARES
$10,000 Lump Sum Investment
Value of initial Value of reinvested
investment distributions
1989 $ 9,550 $ 9,550
1990 $ 9,418 $10,055
1991 $ 9,924 $11,253
1992 $10,056 $12,061
1993 $11,078 $14,107
1994 $ 9,510 $12,874
1995 $10,339 $14,761
1996 $10,359 $15,544
1997 $10,632 $16,745
1998 $10,784 $17,933
1999 $ 9,894 $17,357
The value of a long-term investment in the Tax-Free Income Fund is illustrated
in the chart above. Over a 10-year period ended October 31, 1999, a net
investment of $10,000 would have earned an average annual compound total return
of 5.67% (including sales charge). The chart above illustrates the growth of
this investment to $17,357. Investment return and principal value will
fluctuate, and when redeemed, shares may be worth more or less than original
cost. Past performance is no guarantee of future results.
TOP FIVE HOLDINGS BY STATE
(Composition Subject to Change)
VALUE PORTFOLIO%
- ----------------------------------------------
Texas $38,223,317 16.45%
Illinois $19,068,752 8.21%
Alabama $17,711,248 7.62%
South Carolina $16,947,954 7.29%
North Carolina $16,880,383 7.26%
LONG-TERM U.S. GOVERNMENT
BOND FUND
FUND PERFORMANCE- CLASS D SHARES
$10,000 Lump Sum Investment
Value of initial Value of reinvested
investment distributions
1989 $ 9,550 $ 9,550
1990 $ 9,293 $10,211
1991 $ 9,917 $11,870
1992 $10,091 $13,167
1993 $10,376 $14,584
1994 $ 9,284 $13,891
1995 $10,155 $16,208
1996 $10,018 $17,020
1997 $10,266 $18,524
1998 $10,798 $20,590
1999 $ 9,981 $20,098
The value of a long-term investment in the Long-Term U.S. Government Bond Fund
is illustrated in the chart above. Over a 10-year period ended October 31, 1999,
a net investment of $10,000 would have earned an average annual compound total
return of 7.23% (including sales charge). The chart above illustrates the growth
of this investment to $20,098. Investment return and principal value will
fluctuate, and when redeemed, shares may be worth more or less than original
cost. Past performance is no guarantee of future results.
TOP FIVE HOLDINGS BY TYPE
(Composition Subject to Change)
VALUE PORTFOLIO%
- ----------------------------------------------------
FHLMC $12,937,397 35.90%
- ----------------------------------------------------
FNMA $ 9,768,859 27.11%
- ----------------------------------------------------
U.S. Treasury $ 8,816,090 24.47%
- ----------------------------------------------------
Repurchase Agreement $ 2,200,000 6.11%
- ----------------------------------------------------
Resolution Funding $ 1,994,540 5.54%
- ----------------------------------------------------
4 NATIONWIDE
<PAGE> 7
NATIONWIDE(R) BOND AND MONEY MARKET FUND HIGHLIGHTS
- --------------------------------------------------------------------------------
INTERMEDIATE U.S. GOVERNMENT
BOND FUND
FUND PERFORMANCE- CLASS D SHARES
$10,000 Lump Sum Investment
Value of initial Value of reinvested
investment distributions
1992 $ 9,627 $10,041
1993 $ 9,907 $11,060
1994 $ 8,903 $10,596
1995 $ 9,772 $12,341
1996 $ 9,695 $12,992
1997 $ 9,956 $14,143
1998 $10,207 $15,421
1999 $ 9,550 $15,278
The value of a long-term investment in the Intermediate U.S. Government Bond
Fund is illustrated in the chart above. A net investment of $10,000 made on
2/10/92 (the Fund's inception date) would have earned an average annual compound
total return of 5.54% (including sales charge). The chart above illustrates the
growth of this investment to $15,278. Investment return and principal value will
fluctuate, and when redeemed, shares may be worth more or less than original
cost. Past performance is no guarantee of future results.
TOP FIVE HOLDINGS BY TYPE
(Composition Subject to Change)
VALUE PORTFOLIO%
- ----------------------------------------------------
U.S. Treasury $34,558,429 33.55%
- ----------------------------------------------------
FHLMC $29,570,642 28.71%
- ----------------------------------------------------
FNMA $15,614,583 15.16%
- ----------------------------------------------------
FHLB $ 8,693,597 8.44%
- ----------------------------------------------------
Repurchase Agreement $ 7,921,000 7.69%
- ----------------------------------------------------
MONEY MARKET FUND
FUND PERFORMANCE- PRIME SHARES
30-Day Yield Trend
Money Market
CPI Fund yields
10/98 0 % 4.79%
11/98 0.24% 4.72%
12/98 0.18% 4.70%
1/99 0.12% 4.60%
2/99 0.12% 4.40%
3/99 0.06% 4.37%
4/99 0.18% 4.35%
5/99 0.73% 4.33%
6/99 0 % 4.36%
7/99 0 % 4.40%
8/99 0.03% 4.51%
9/99 0.03% 4.67%
10/99 0.48% 4.83%
The chart above shows the Money Market Fund's yield trend for the period ended
October 31, 1999, as compared to the Consumer Price Index (CPI) over the same
period. The Money Market Fund 30-day current yield at 10/31/99 was 4.83%, the
seven-day current yield was 4.94% and the seven-day effective yield was 5.06%.
Past performance is no guarantee of future results.
TOP FIVE HOLDINGS BY ISSUER
(Composition Subject to Change)
VALUE PORTFOLIO%
- --------------------------------------------------------------
General Electric Capital Corp. $57,293,438 4.19%
- --------------------------------------------------------------
American Express Credit Corp. $56,854,770 4.16%
- --------------------------------------------------------------
General Motors Acceptance Corp. $55,765,826 4.08%
- --------------------------------------------------------------
CIT Group $54,951,063 4.02%
- --------------------------------------------------------------
Merrill Lynch & Co. $54,104,140 3.96%
- --------------------------------------------------------------
NATIONWIDE 5
<PAGE> 8
NATIONWIDE(R) MUTUAL FUNDS
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MID CAP GROWTH FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide Mid Cap Growth Fund (Class D) for
the 12-month period ended October 31, 1999, was 13.31%*, compared to 21.07% for
the S&P MidCap 400 Index.
During the fall of 1998, investors took pains to reduce or avoid risk
in their portfolios, leading to large declines in financial and technology
stocks. As the fiscal year began last November, the Federal Reserve was
preparing its third interest rate decrease. This liquidity boost served to shore
up investor confidence, and the stock market took off.
One trend that has solidly emerged over the past 12 months, despite
subsequent interest rate increases, is the investor's greater appetite for risk.
The dramatic increases in technology stocks, particularly internet issues that
in many cases have never earned a profit, are evidence of this trend. Increased
risk-tolerance can also be seen through the extraordinary price performance of
many initial public offerings. Such offerings have proven to be a difficult way
to earn money over the long term, but the short-term performances have been
nothing short of astonishing.
The Mid Cap Growth Fund benefited from certain of the above trends
during the year. Our largest holding, Advent Software, gained more than 150%
over the 12-month period. Advent makes investment management software to
automate and integrate operations for asset managers. After a decline last fall
with other technology stocks, Advent rocketed back with stellar sales growth and
exciting new product momentum. Despite paring back our position for
diversification purposes, the stock remained nearly 9% of the portfolio. Other
names that delivered excellent returns included many of the
semiconductor-related companies, such as Microchip Technology, KLA-Tencor and
Cognex. Each of these stocks rose between 90%-150% during the year following
their declines during the fall of 1998.
One sector that was particularly challenging for the Mid Cap Growth
Fund was health care. Among the companies that disappointed were Covance and
Quintiles, both contract research organizations. Both stocks were sold after
price drops that followed disappointing revenue and earnings news. Manor Care
was also a disappointment. This nursing home operator faced challenges in the
new Medicare reimbursement regulations. While these challenges impacted their
operations significantly in 1999, I believe the company is adjusting and will be
able to return to the growth track in coming years.
I plan to continue looking for high-quality growth companies for the
portfolio. This emphasis on quality may mean that investors in the Fund pass up
some of the more speculative types of gains that appear to be occurring in the
market. However, this strategy is intended to reduce some volatility if
investors' appetites for risk decrease dramatically.
CHRISTOPHER A. WELCH, CFA
* PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
Fund Value $12,027,154
PORTFOLIO COMPOSITION
(Subject to Change)
Short-Term Debt 7.5%
Common Stock 92.6%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN +
(For Years Ended October 31, 1999)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(3)
- --------------------------------------------------------------------------------
1 12.98% 6.48% 12.33% 7.33% 13.31% 8.21%
5 16.42% 15.05% 16.12% 15.90% 16.41% 15.34%
10 13.10% 12.43% 12.95% 12.95% 13.09% 12.57%
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns represent performance achieved prior to the creation of the
class (5/11/98), excluding the effect of the 0.25% (Class A) or 1.00% (Class
B) 12b-1 fee. Had Class A or B been in existence for the time periods
presented, the Fund's performance for such classes would have been lower as
a result of the additional expenses.
** These returns do not reflect the effects of a sales charge.
1 A 5.75% front-end sales charge was deducted.
2 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
3 A 4.50% front-end sales charge was deducted.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE - CLASS D SHARES
Fund S&P 400 CPI
- -----------------------------------------------
1989 $ 9,550 $10,000 $10,000
1990 $ 8,071 $ 8,660 $10,637
1991 $11,838 $13,952 $10,940
1992 $12,480 $15,460 $11,299
1993 $14,300 $18,952 $11,610
1994 $15,290 $19,402 $11,920
1995 $18,587 $23,518 $12,247
1996 $22,195 $27,598 $12,614
1997 $27,446 $36,614 $12,876
1998 $28,848 $39,071 $13,068
1999 $32,688 $47,305 $13,402
Comparative performance of $10,000 invested in the Mid Cap Growth Fund, the S&P
MidCap 400 Index (S&P 400)* and the Consumer Price Index (CPI)** over a 10-year
period ended 10/31/99. Unlike our Fund, these indices do not reflect any fees,
expenses or sales charges.
* The S&P MidCap 400 Index is an unmanaged index of 400 stocks of medium
sized U.S. companies. The stocks are chosen for their market size liquidity
and industry group representation.
** The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
6 NATIONWIDE
<PAGE> 9
STATEMENT OF INVESTMENTS NATIONWIDE(R) MID CAP GROWTH FUND
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (92.6%)
- --------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES (1.3%)
7,000 Herman Miller, Inc. $ 151,813
-----------
- --------------------------------------------------------------
CAPITAL GOODS (1.4%)
5,200 Millipore Corp.. 165,750
-----------
- --------------------------------------------------------------
CHEMICALS (0.9%)
4,000 Sigma-Aldrich Corp. 114,000
-----------
- --------------------------------------------------------------
COMPUTER EQUIPMENT (1.5%)
8,000 American Power Conversion Corp.* 179,500
-----------
- --------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (17.9%)
17,800 Advent Software, Inc.* 1,070,225
8,000 BMC Software, Inc.* 513,500
24,500 Gartner Group, Inc. Class A 238,875
1,041 Gartner Group, Inc. Class B* 9,759
10,000 SPSS, Inc.* 177,500
6,000 Sungard Data Systems, Inc.* 146,625
-----------
2,156,484
-----------
- --------------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (1.0%)
3,000 Martin Marietta Materials, Inc. 116,812
-----------
- --------------------------------------------------------------
CONSUMER DURABLES (2.9%)
8,000 Black & Decker Corp. 344,000
-----------
- --------------------------------------------------------------
CONSUMER NON-CYCLICAL (1.2%)
4,000 Newell Rubbermaid, Inc. 138,500
-----------
- --------------------------------------------------------------
DENTAL (1.2%)
6,000 Dentsply International, Inc. 139,125
-----------
- --------------------------------------------------------------
DRUGS (8.3%)
4,000 Allergan, Inc. 429,500
2,200 Eli Lilly & Co. 151,525
8,500 Schering-Plough Corp. 420,750
-----------
1,001,775
-----------
- --------------------------------------------------------------
ELECTRONICS (6.4%)
2,900 KLA-TENCOR CORP.* 229,644
2,000 Linear Technology Corp. 139,875
6,000 Microchip Technology, Inc.* 399,750
-----------
769,269
-----------
- --------------------------------------------------------------
FINANCIAL / BANKS (5.9%)
4,950 Huntington Bancshares, Inc. 146,644
18,000 North Fork Bancorp, Inc. 372,375
6,000 Silicon Valley Bancshares* 195,750
-----------
714,769
-----------
- --------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (4.6%)
10,500 Capital One Financial Corp. 556,500
-----------
- --------------------------------------------------------------
FOOD & RELATED (5.9%)
6,500 Quaker Oats Co. 455,000
20,000 Whitman Corp. 260,000
-----------
715,000
-----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------
HEALTH CARE (6.6%)
5,000 Biomet, Inc. $ 150,625
16,000 Manor Care, Inc.* 252,000
20,000 Omnicare, Inc. 185,000
7,500 Quest Diagnostics, Inc.* 210,000
-----------
797,625
-----------
- --------------------------------------------------------------
MACHINERY & CAPITAL GOODS (5.9%)
11,000 Cognex Corp.* 329,312
7,000 Zebra Technologies Corp.* 380,625
-----------
709,937
-----------
- --------------------------------------------------------------
OIL / DOMESTIC (2.6%)
10,000 Anadarko Petroleum Corp. 308,125
-----------
- --------------------------------------------------------------
RETAIL (1.9%)
8,750 Dollar General Corp. 230,781
-----------
- --------------------------------------------------------------
SERVICES (13.1%)
17,000 Ceridian Corp.* 372,937
17,000 Concord EFS, Inc.* 460,063
12,000 Equifax, Inc. 324,000
8,000 IMS Health, Inc. 232,000
8,000 Sterling Commerce, Inc.* 187,500
-----------
1,576,500
-----------
- --------------------------------------------------------------
TELECOMMUNICATIONS (2.1%)
3,000 MCI WorldCom, Inc.* 257,438
-----------
TOTAL COMMON STOCK (cost $8,333,740) 11,143,703
-----------
SHORT-TERM DEBT (7.5%)
- --------------------------------------------------------------
$ 332,000 Johnson Controls, Inc., 5.37%, 11/01/99
(cost $332,000) 332,000
250,000 Merrill Lynch & Co., 5.23%, 11/01/99
(cost $250,000) 250,000
315,000 Sysco Corp., 5.35%, 11/01/99
(cost $315,000) 315,000
-----------
TOTAL SHORT-TERM DEBT (cost $897,000) 897,000
-----------
TOTAL INVESTMENTS (cost $9,230,740) $12,040,703
===========
- ------------------------------------------------------
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NATIONWIDE 7
<PAGE> 10
NATIONWIDE(R) MUTUAL FUNDS
- --------------------------------------------------------------------------------
GROWTH FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide Growth Fund (Class D) for the 12-month
period ended October 31, 1999, was 17.07%*, compared to a return of 25.67% for
the S&P 500 Index.
During the 1999 fiscal year, the best performing stocks in the Growth Fund
tended to be technology companies. Microsoft, Intel, MCI Worldcom, and BMC
software all provided returns in excess of the S&P 500 during the period. Intel,
Home Depot and Bed Bath and Beyond were added to the Fund during a period of
weakness that developed in growth stocks during the summer. All were strong
performers for the entire 12-month period. Also, while financial stocks have
been weak for most of 1999, two of the Fund's large holdings, Axa Financial and
American International Group, had competitive returns when considering the
entire 12-month period.
The main sources of weakness in the Fund came from two areas. The first was
in drug stocks, which performed poorly all year, both due to fear of rising
interest rates, and fear of possible federal health care reform. However, the
drug stocks in our portfolio have strong future product development, prominent
franchising position, and patent protection. The other area of weakness came
from a handful of stocks that suffered earnings disappointments and subsequent
severe price declines. In some cases, such as with Newell and Covance, these
disappointments casted doubt on the long-term fundamental outlooks of the
companies. In those instances, the Fund sold the stock. In other instances-for
example, Avon, Ceridian, and Cardinal Health-it still looks as though the
long-term fundamentals are intact and the short-term market reaction has been
too extreme, and we have held those positions.
The Fund's strategy continues to concentrate on adding high-quality growth
stocks and selling issues that are less well positioned. These buys have been
predominantly in the large-cap area, with some additions in mid cap when
opportunities have arisen. It is discouraging that some of the recent additions
under this strategy, such as Ceridian and Cardinal Health, had short-term
earnings disappointments. However, these additions were made with long-term
results in mind, and as long as the fundamentals remain sound, this strategy
should prove effective.
JOHN M. SCHAFFNER, MBA, CFA
* PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
FUND VALUE $1,028,550,825
PORTFOLIO COMPOSITION
(Subject to Change)
U.S. Government Obligation 1.1%
Common Stock 98.7%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN +
(For Years Ended October 31, 1999)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(3)
- -----------------------------------------------------------------------------
1 16.85% 10.13% 16.12% 11.12% 17.07% 11.80%
- -----------------------------------------------------------------------------
5 19.47% 18.06% 19.26% 19.06% 19.51% 18.42%
- -----------------------------------------------------------------------------
10 14.68% 14.01% 14.58% 14.58% 14.70% 14.18%
- -----------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns represent performance achieved prior to the creation of the
class (5/11/98), excluding the effect of the 0.25% (Class A) or 1.00%
(Class B) 12b-1 fee. Had Class A or B been in existence for the time
periods presented, the Fund's performance for such classes would have been
lower as a result of the additional expenses.
** These returns do not reflect the effects of a sales charge.
1 A 5.75% front-end sales charge was deducted.
2 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
3 A 4.50% front-end sales charge was deducted.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE - CLASS D SHARES
Fund S&P 500 CPI
- ----------------------------------------
1989 $ 9,550 $10,000 $10,000
1990 $ 8,202 $ 9,252 $10,637
1991 $11,758 $12,351 $10,940
1992 $12,574 $13,581 $11,299
1993 $14,606 $15,610 $11,610
1994 $15,443 $16,214 $11,920
1995 $18,688 $20,501 $12,247
1996 $20,998 $25,440 $12,614
1997 $27,741 $33,610 $12,876
1998 $32,162 $41,001 $13,068
1999 $37,651 $51,526 $13,402
Comparative performance of $10,000 invested in the Growth Fund, the S&P 500* and
the Consumer Price Index (CPI)** over a 10-year period ended 10/31/99. Unlike
our Fund, these indices do not reflect any fees, expenses or sales charges.
* The S&P 500 is a capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy through changes in the
aggregate market value of these 500 stocks, which represent all major
industries.
** The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
8 NATIONWIDE
<PAGE> 11
STATEMENT OF INVESTMENTS NATIONWIDE(R) GROWTH FUND
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (98.7%)
- ---------------------------------------------------------------------
BEVERAGES / SOFT DRINK (1.2%)
350,000 PepsiCo, Inc. $ 12,140,625
--------------
- ---------------------------------------------------------------------
BROADCAST MEDIA / CABLE TELEVISION (4.7%)
600,000 Comcast Corp. Class A 22,800,000
600,000 Comcast Corp. Special Class A 25,275,000
--------------
48,075,000
--------------
- ---------------------------------------------------------------------
COMPUTER EQUIPMENT (9.0%)
895,200 EMC Corp.* 65,349,600
100,000 Hewlett-Packard Co. 7,406,250
200,000 International Business Machines Corp. 19,675,000
--------------
92,430,850
--------------
- ---------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (19.6%)
800,000 Automatic Data Processing, Inc. 38,550,000
900,000 BMC Software, Inc.* 57,768,750
250,000 Electronic Arts, Inc.* 20,203,125
600,000 First Data Corp. 27,412,500
2,137,100 Gartner Group, Inc. Class A 20,836,725
400,000 Microsoft Corp.* 37,025,000
--------------
201,796,100
--------------
- ---------------------------------------------------------------------
CONSUMER NON-CYCLICAL (2.5%)
800,000 Avon Products, Inc. 25,800,000
--------------
- ---------------------------------------------------------------------
DISTRIBUTION (0.3%)
500,000 Bergen Brunswig Corp. Class A 3,562,500
--------------
- ---------------------------------------------------------------------
DRUGS (16.9%)
300,000 Allergan, Inc. 32,212,500
325,000 Glaxo Wellcome PLC ADR 19,459,375
600,000 Merck & Co., Inc. 47,737,500
480,000 Pfizer, Inc. 18,960,000
640,000 Schering-Plough Corp. 31,680,000
300,000 Warner-Lambert Co. 23,943,750
--------------
173,993,125
--------------
- ---------------------------------------------------------------------
ELECTRONICS (1.7%)
200,000 Intel Corp. 15,487,500
189,000 Woodhead Industries, Inc. 1,830,938
--------------
17,318,438
--------------
- ---------------------------------------------------------------------
ENTERTAINMENT (2.6%)
999,750 Walt Disney Co. (The) 26,368,406
--------------
- ---------------------------------------------------------------------
FINANCIAL / BANKS (1.4%)
400,000 Mellon Financial Corp. 14,775,000
--------------
- ---------------------------------------------------------------------
FOOD & RELATED (2.8%)
300,000 Quaker Oats Co. 21,000,000
300,000 Sara Lee Corp. 8,118,750
--------------
29,118,750
--------------
- ---------------------------------------------------------------------
HEALTH CARE (4.7%)
200,000 Biomet, Inc. 6,025,000
500,000 Cardinal Health, Inc. 21,562,500
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- ---------------------------------------------------------------------
HEALTH CARE (CONTINUED)
200,000 Johnson & Johnson Co. $ 20,950,000
--------------
48,537,500
--------------
- ---------------------------------------------------------------------
INSURANCE (9.0%)
300,000 Allstate Corp. 8,625,000
350,156 American International Group, Inc. 36,044,183
1,478,000 AXA Financial, Inc. 47,388,375
--------------
92,057,558
--------------
- ---------------------------------------------------------------------
MACHINERY & CAPITAL GOODS (2.5%)
337,500 Lindsay Manufacturing Co. 6,855,469
354,000 Zebra Technologies Corp.* 19,248,750
--------------
26,104,219
--------------
- ---------------------------------------------------------------------
RETAIL (4.5%)
700,000 Bed, Bath and Beyond, Inc.* 23,318,750
300,000 Home Depot, Inc. 22,650,000
--------------
45,968,750
--------------
- ---------------------------------------------------------------------
SERVICES (8.6%)
1,200,000 Ceridian Corp.* 26,325,000
115,000 Cintas Corp. 6,928,750
350,000 IMS Health, Inc. 10,150,000
767,100 Paychex, Inc. 30,204,562
55,300 ProBusiness Services, Inc.* 1,389,413
575,000 Sterling Commerce, Inc.* 13,476,563
--------------
88,474,288
--------------
- ---------------------------------------------------------------------
TELECOMMUNICATIONS (6.7%)
800,000 MCI WorldCom, Inc.* 68,650,000
--------------
OTAL COMMON STOCK (cost $668,940,721) 1,015,171,109
--------------
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT SHORT-TERM OBLIGATIONS (1.1%)
- ---------------------------------------------------------------------
$ 1,531,000 Federal Home Loan Bank 5.16%, 11/01/99
(cost $1,531,000) 1,531,000
10,170,000 Federal Mortgage Corp. 5.24%, 11/30/99
(cost $10,127,071) 10,127,071
--------------
TOTAL U.S. GOVERNMENT SHORT-TERM OBLIGATIONS
(cost $11,658,071) 11,658,071
--------------
TOTAL INVESTMENTS (cost $680,598,792) $1,026,829,180
==============
- -----------------------------------------------------------------
* DENOTES A NON-INCOME PRODUCING SECURITY.
Cost also represents cost for Federal income tax purposes.
Portfolio holding percentages represent market value as a percentage of net
assets.
See accompanying notes to financial statements.
NATIONWIDE 9
<PAGE> 12
NATIONWIDE(R) MUTUAL FUNDS
- --------------------------------------------------------------------------------
NATIONWIDE FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide Fund (Class D) for the 12-month
period ended October 31, 1999, was 10.27%*, compared to 25.67% for the S&P 500
Index.
The Nationwide Fund underperformed the S&P 500 due to the relatively
weak performance of both pharmaceutical and financial stocks. These areas were
hurt during the year due to increasing earnings growth in other sectors of the
market as well as rising interest rates.
Warner-Lambert and Schering-Plough, the Fund's two largest holdings,
continue to achieve impressive, steady growth from their drug portfolios. I am
confident this consistent growth will continue in the future, and therefore I am
comfortable with these large positions. Also, in early November (after fiscal
year end), Warner-Lambert announced a definitive agreement to merge with
American Home Products ("AHP"). Within hours of that announcement, Pfizer made
an unsolicited bid for Warner-Lambert. Both AHP and Pfizer are holdings in the
Fund, and I am optimistic that either scenario will be beneficial for both
companies going forward. It is also likely that these announcements will lead to
other positive combinations within the pharmaceutical industry.
Other large positions in the Fund are Wells Fargo and Mellon Bank.
These two unique financial service franchises are well positioned to continue to
outperform their industry peers. Although the financial services sector has been
weak, the passage of the new financial services legislation along with a
leveling-off of interest rates should once again allow these stocks to lead the
market.
World class consumer products companies Black & Decker and Quaker Oats
have shown consistent sales and earnings growth over the past couple of years
but continue to lag the overall market due to a general lack of interest in
consumer products companies.
The largest new holding in the portfolio is Pharmacia & Upjohn. This
company was formed a few years ago through the merger of Pharmacia AB and The
Upjohn Corp. After a few challenging years and a couple of significant
management changes, this company now appears well positioned for consistent
growth over the next three to five years. Although the company's new drug
pipeline contains no blockbusters, it does look quite promising with two
potential new drugs addressing sizable market opportunities.
The Fund's outstanding performer during the year was Tiffany & Co. The
stock more than tripled from its lows last October and is now roughly 3% of the
Fund's assets. I feel the company possesses a superior franchise with a
favorable long-term outlook.
As I have been doing during recent years, I continue to concentrate
portfolio holdings in high-quality names. The market has not differentiated
significantly between such quality companies and higher-risk businesses. I
continue to feel that the market is not sufficiently weighing the risks inherent
in many technology industries. This has become most evident in the internet
sector where many companies with completely unproven business models command
incredibly high, premium valuations. I intend to avoid these situations and
concentrate on high-quality companies with proven track records that are selling
at reasonable prices.
CHARLES S. BATH, MBA, CFA
* PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
Fund Value $2,542,710,321
PORTFOLIO COMPOSITION
(Subject to Change)
Short-Term Debt 2.6%
Covertible Bonds 0.1%
Common Stock 97.3%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN +
(For Years Ended October 31, 1999)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(3)
- -----------------------------------------------------------------------------
1 10.05% 3.72% 9.22% 4.22% 10.27% 5.31%
- -----------------------------------------------------------------------------
5 23.89% 22.43% 23.56% 23.39% 23.92% 22.78%
- -----------------------------------------------------------------------------
10 16.18% 15.49% 16.03% 16.03% 16.19% 15.66%
- -----------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns represent performance achieved prior to the creation of the
class (5/11/98), excluding the effect of the 0.25% (Class A) or 1.00%
(Class B) 12b-1 fee. Had Class A or B been in existence for the time period
presented, the Fund's performance for such classes would have been lower as
a result of the additional expenses.
** These returns do not reflect the effects of a sales charge.
1 A 5.75% front-end sales charge was deducted.
2 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
3 A 4.50% front-end sales charge was deducted.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE - CLASS D SHARES
Fund S&P 500 CPI
- --------------------------------------------
1989 $ 9,550 $10,000 $10,000
1990 $ 8,879 $ 9,252 $10,637
1991 $12,117 $12,351 $10,940
1992 $13,169 $13,581 $11,299
1993 $13,979 $15,610 $11,610
1994 $14,661 $16,214 $11,920
1995 $17,481 $20,501 $12,247
1996 $22,045 $25,440 $12,614
1997 $30,902 $33,610 $12,876
1998 $38,851 $41,001 $13,068
1999 $42,841 $51,526 $13,402
Comparative performance of $10,000 invested in the Nationwide Fund, the S&P 500*
and the Consumer Price Index (CPI)** over a 10-year period ended 10/31/99.
Unlike our Fund, these indices do not reflect any fees, expenses or sales
charges.
* The S&P 500 is a capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy through changes in the
aggregate market value of these 500 stocks which represent all major
industries.
** The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
10 NATIONWIDE
<PAGE> 13
STATEMENT OF INVESTMENTS NATIONWIDE(R) FUND
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (97.3%)
- -----------------------------------------------------------------------------
BEVERAGES / ALCOHOLIC (1.0%)
361,100 Anheuser-Busch Cos., Inc. $ 25,931,494
-------------
- -----------------------------------------------------------------------------
BEVERAGES / SOFT DRINK (1.4%)
1,050,200 PepsiCo, Inc. 36,428,812
-------------
- -----------------------------------------------------------------------------
CAPITAL GOODS (1.4%)
544,400 Millipore Corp. 17,352,750
806,893 Pall Corp. 17,701,215
-------------
35,053,965
-------------
- -----------------------------------------------------------------------------
CHEMICALS (2.1%)
1,005,200 Georgia Gulf Corp. 21,674,625
335,400 OM Group, Inc. 12,577,500
473,458 Rohm & Haas Co. 18,109,769
-------------
52,361,894
-------------
- -----------------------------------------------------------------------------
COMPUTER EQUIPMENT (2.0%)
507,700 International Business Machines Corp 49,944,988
-------------
- -----------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (0.1%)
59,726 Gartner Group, Inc. Class A 582,329
-------------
- -----------------------------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (3.5%)
460,400 Martin Marietta Materials, Inc. 17,926,825
1,117,200 Masco Corp. 34,074,600
906,600 Vulcan Materials Co. 37,453,913
-------------
89,455,338
-------------
- -----------------------------------------------------------------------------
CONSUMER DURABLES (4.8%)
2,197,400 Black & Decker Corp. 94,488,200
693,700 Maytag Corp. 27,791,356
-------------
122,279,556
-------------
- -----------------------------------------------------------------------------
CONSUMER NON-CYCLICAL (0.8%)
200,000 Procter & Gamble Co. 20,975,000
-------------
- -----------------------------------------------------------------------------
DRUGS (22.6%)
440,900 Allergan, Inc. 47,341,637
781,100 ALZA Corp.* 33,440,844
332,800 American Home Products Corp. 17,388,800
787,800 Pfizer, Inc. 31,118,100
1,404,600 Pharmacia & Upjohn, Inc. 75,760,612
3,248,400 Schering-Plough Corp. 160,795,800
2,617,800 Warner-Lambert Co. 208,933,163
-------------
574,778,956
-------------
- -----------------------------------------------------------------------------
ENTERTAINMENT (0.8%)
806,795 Walt Disney Co. (The) 21,279,218
-------------
- -----------------------------------------------------------------------------
FINANCIAL / BANKS (13.4%)
509,600 Bank of New York Co., Inc. 21,339,500
1,804,708 Bank One Corp. 67,789,344
3,230,600 Mellon Financial Corp. 119,330,287
480,200 Pacific Century Financial Corp. 10,954,563
2,523,000 Wells Fargo Co. 120,788,625
-------------
340,202,319
-------------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -----------------------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (5.1%)
1,498,084 Associates First Capital Corp. $ 54,680,066
2,108,600 MBNA Corp. 58,250,075
224,900 Merrill Lynch & Co., Inc. 17,654,650
-------------
130,584,791
-------------
- -----------------------------------------------------------------------------
FOOD & RELATED (6.0%)
527,400 Philip Morris Cos., Inc. 13,283,887
1,266,000 Quaker Oats Co. 88,620,000
1,617,800 Ralston-Ralston Purina Group 50,859,588
-------------
152,763,475
-------------
- -----------------------------------------------------------------------------
HEALTH CARE (3.4%)
192,000 Abbott Laboratories 7,752,000
1,544,400 Manor Care, Inc.* 24,324,300
729,700 Quest Diagnostics, Inc.* 20,431,600
1,211,300 St. Jude Medical, Inc.* 33,159,337
-------------
85,667,237
-------------
- -----------------------------------------------------------------------------
INSURANCE (4.5%)
514,117 American International Group, Inc. 52,921,919
1,031,500 Horace Mann Educators Corp. 29,075,406
150,850 MBIA, Inc. 8,607,878
750,732 UNUM Corp. 24,727,235
-------------
115,332,438
-------------
- -----------------------------------------------------------------------------
LEISURE PRODUCTS (1.9%)
2,116,700 Brunswick Corp. 47,890,337
-------------
- -----------------------------------------------------------------------------
MACHINERY & CAPITAL GOODS (1.3%)
472,400 Transportation Technologies Industries, Inc.* 6,967,900
844,400 Trinity Industries, Inc. 25,173,675
-------------
32,141,575
-------------
- -----------------------------------------------------------------------------
MORTGAGE / ASSET BACKED OBLIGATIONS (2.3%)
838,600 Fannie Mae 59,330,950
-------------
- -----------------------------------------------------------------------------
MOTOR VEHICLES (1.8%)
857,900 Ford Motor Co. 47,077,263
-------------
- -----------------------------------------------------------------------------
OIL / INTERNATIONAL (2.2%)
917,400 Texaco, Inc. 56,305,425
-------------
- -----------------------------------------------------------------------------
PRINTING & PUBLISHING (5.6%)
747,700 E.W. Scripps Co. Class A 34,534,394
315,800 Gannett Co., Inc. 24,356,075
1,532,400 New York Times Co. (The) Class A 61,679,100
40,700 Washington Post Co. Class B 21,654,944
-------------
142,224,513
-------------
- -----------------------------------------------------------------------------
RESTAURANTS (1.8%)
1,116,800 McDonald's Corp. 46,068,000
-------------
- -----------------------------------------------------------------------------
RETAIL (4.5%)
1,279,000 Tiffany & Co. 76,100,500
650,600 Wal-Mart Stores, Inc. 37,165,525
-------------
113,266,025
-------------
NATIONWIDE 11
<PAGE> 14
STATEMENT OF INVESTMENTS NATIONWIDE(R) FUND (CONTINUED)
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------------
SERVICES (1.6%)
586,400 Dun & Bradstreet Corp. (The) $ 17,225,500
241,600 Equifax, Inc. 6,523,200
603,600 IMS Health, Inc. 17,504,400
--------------
41,253,100
--------------
- -------------------------------------------------------------------
TELECOMMUNICATIONS (1.4%)
422,688 Alltel Corp. 35,188,776
--------------
TOTAL COMMON STOCK (cost $1,481,027,224) 2,474,367,774
--------------
PRINCIPAL SECURITY VALUE
CONVERTIBLE BONDS (0.1%)
- -------------------------------------------------------------------
$ 7,826,000 Consorcio G Grupo Dina, (a) 8.00%,
08/08/04 (cost $7,434,365) 3,785,827
--------------
SHORT-TERM DEBT (2.6%)
- -------------------------------------------------------------------
20,000,000 Associates First Capital Corp.,
5.25%, 11/02/99 19,997,083
18,558,000 GE Capital Corp., 5.20%, 11/01/99 18,558,000
21,893,000 Merrill Lynch & Co., 5.31%, 11/03/99 21,886,542
5,012,000 Merrill Lynch & Co., 5.32%, 11/04/99 5,009,778
--------------
TOTAL SHORT-TERM DEBT (cost $65,451,403) 65,451,403
--------------
TOTAL INVESTMENTS (cost $1,553,912,992) $2,543,605,004
==============
- ---------------------------------------------------------------
* Denotes a non-income producing security.
Cost also represents cost for Federal income tax purposes.
Portfolio holding percentages represent market value as a percentage of net
assets.
(a) Denominated in U.S. Dollars.
See accompanying notes to financial statements.
12 NAITIONWIDE
<PAGE> 15
NATIONWIDE(R) MUTUAL FUNDSBOND FUND
- --------------------------------------------------------------------------------
BOND FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide Bond Fund (Class D) for the
12-month period ended October 31, 1999, was -1.24%*, compared to -0.66% return
for the Lehman Brothers Government/Corporate Bond Index.
These poor returns were caused by sharply higher interest rates as the
U.S. economy's continued strength led to an improving world economy. Despite
negative absolute returns, performance for the fund was competitive with the
benchmark over the trailing 12 months. The 30-year Treasury is now yielding
6.16%, up from 5.15% a year ago, while the two-year Treasury has increased to
5.78% from just 4.12%.
Last year the Federal Reserve aggressively eased interest rates to head
off a liquidity crisis from pulling the U.S. into a recession, stabilize U.S.
markets, and block potential worldwide economic problems. Almost everyone
believed significant slowing of the economy was the best case for 1999. Instead,
economic growth actually accelerated in the U.S., and the widening trade deficit
has pulled the world economy along. Growth has averaged more than 4%, and even
Japan seems on the road to recovery. Many economists now believe multiple
increases in the funds rate, to 6% or higher, are likely some time in 2000.
With corporate bond spreads at the widest levels of the decade a year
ago, I would have expected corporates to have performed exceptionally well as
the economy steamed ahead and profit growth was superb. But they did not.
Corporate spreads tightened for about six months, but when the Federal Reserve
moved to a tightening bias, they reversed course and began widening. As year
2000 concerns mounted, fears of heavy corporate supply further pushed spreads
all the way back to the levels of last year.
I believe the combination of interest rates near their highs of the
last few years and spreads at the widest of the decade has set the bond market
and the Nationwide Bond Fund up for good returns next year almost regardless of
what happens. If the Federal Reserve is successful in slowing the economy,
interest rates will decline. But a recession is unlikely with the rest of the
world on the mend. If the economy does not slow, rates will probably drift
higher, but not nearly to the same extent as last year. Therefore, the bond
market is already priced for a couple of tightening moves. With an improving
world economy, corporate profits should remain strong and spreads are likely to
tighten, especially once we get into the new year and Y2K fears are behind us.
DOUGLAS E. KITCHEN, CFA
* PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
FUND VALUE $130,299,176
PORTFOLIO COMPOSITION
(Subject to Change)
U.S. Government
Obligations 10.9%
Short-Term 2.3%
Canadian Bonds 0.8%
Corporate Bonds 85.1%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN +
(For Years Ended October 31, 1999)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(1)
- ------------------------------------------------------------------------------
1 -1.58% -6.01% -2.07% -6.72% -1.24% -5.68%
- ------------------------------------------------------------------------------
5 7.98% 6.99% 7.82% 7.52% 8.11% 7.11%
- ------------------------------------------------------------------------------
10 7.34% 6.85% 7.26% 7.26% 7.40% 6.91%
- ------------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns represent performance achieved prior to the creation of the
class (5/11/98), excluding the effect of the 0.25% (Class A) or 0.85% (Class
B) 12b-1 fee. Had Class A or B been in existence for the time periods
presented, the Fund's performance for such classes would have been lower as a
result of the additional expenses.
** These returns do not reflect the effects of a sales charge.
1 A 4.50% front-end sales charge was deducted.
2 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE - CLASS D SHARES
Fund LBG/CBI CPI
- --------------------------------------------------
1989 $ 9,550 $10,000 $10,000
1990 $10,109 $10,550 $10,637
1991 $11,633 $12,172 $10,940
1992 $12,895 $13,451 $11,299
1993 $14,650 $15,289 $11,610
1994 $13,212 $14,580 $11,920
1995 $15,909 $16,935 $12,247
1996 $16,712 $17,845 $12,614
1997 $18,104 $19,417 $12,876
1998 $19,754 $21,413 $13,068
1999 $19,509 $21,271 $13,402
Comparative performance of $10,000 invested in the Bond Fund, the Lehman
Brothers Government/Corporate Bond Index (LBG/CBI)* and the Consumer Price Index
(CPI)** over a 10-year period ended 10/31/99. Unlike our Fund, these indices do
not reflect any fees, expenses or sales charges.
* The LBG/CBI consists of U.S. government and corporate bonds with maturities
of one year or more and outstanding par value of at least $100 million. All
returns are market value-weighted inclusive of accrued interest.
** The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
NATIONWIDE 13
<PAGE> 16
STATEMENT OF INVESTMENTS NATIONWIDE(R) BOND FUND
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
CANADIAN BONDS (0.8%)
- --------------------------------------------------------------------------
$1,000,000 Quebec (Province of), 8.625%, 01/19/05
(cost $1,068,699) $1,071,430
----------
CORPORATE BONDS (85.1%)
- --------------------------------------------------------------------------
AEROSPACE (1.8%)
2,500,000 Lockheed Corp., 7.875%, 03/15/23 2,390,052
----------
- --------------------------------------------------------------------------
AIRLINES (1.3%)
1,500,000 American Airlines, Inc., 10.33%, 03/04/05 1,690,795
----------
- --------------------------------------------------------------------------
CHEMICALS (4.7%)
2,500,000 Hercules, Inc., 6.60%, 08/01/27 2,333,822
2,000,000 Praxair, Inc., 6.625%, 10/15/07 1,902,190
2,000,000 Witco Corp., 6.125%, 02/01/06 1,823,590
----------
6,059,602
----------
- --------------------------------------------------------------------------
COMMUNICATION EQUIPMENT (1.5%)
2,000,000 Motorola, Inc., 6.50%, 09/01/25 1,953,022
----------
- --------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (2.2%)
3,000,000 Computer Associates International, Inc.,
6.375%, 04/15/05 2,827,869
----------
- --------------------------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (5.8%)
4,000,000 Armstrong World Industries, Inc.,
9.75%, 04/15/08 4,581,488
3,000,000 Hanson Overseas, 6.75%, 09/15/05 2,929,686
----------
7,511,174
----------
- --------------------------------------------------------------------------
CONSUMER DURABLE (0.9%)
1,030,000 Whirlpool Corp., 9.10%, 02/01/08 1,124,200
----------
- --------------------------------------------------------------------------
CONSUMER NON-CYCLICAL (2.3%)
3,000,000 Kimberly Clark Corp., 7.875%, 02/01/23 2,983,917
----------
- --------------------------------------------------------------------------
CONTAINERS (1.5%)
2,000,000 Bemis Co., Inc., 6.70%, 07/01/05 1,974,786
----------
- --------------------------------------------------------------------------
ELECTRONICS (1.5%)
2,000,000 Avnet, Inc., 6.45%, 08/15/03 1,983,124
----------
- --------------------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (3.1%)
3,000,000 Finova Capital Corp., 6.15%, 03/31/03 2,902,827
1,000,000 Lehman Brothers Holdings, Inc.,
11.625%, 05/15/05 1,186,387
----------
4,089,214
----------
- --------------------------------------------------------------------------
FOOD & RELATED (1.4%)
2,000,000 Dole Foods Co., 6.375%, 10/01/05 1,885,984
----------
- --------------------------------------------------------------------------
HEALTH CARE (4.9%)
4,000,000 Becton, Dickinson & Co., 8.70%, 01/15/25 4,226,300
2,000,000 Kaiser Foundation Hospitals, 9.55%, 07/15/05 2,222,668
----------
6,448,968
----------
PRINCIPAL SECURITY VALUE
CORPORATE BONDS (CONTINUED)
- --------------------------------------------------------------------------
HOTELS / MOTELS (3.7%)
$ 3,000,000 Hilton Hotels Corp., 7.375%, 06/01/02 $ 2,944,566
2,000,000 Marriot International, Inc., 6.875%, 11/15/05 1,910,556
-----------
4,855,122
-----------
- --------------------------------------------------------------------------
INSURANCE (5.2%)
4,000,000 AMBAC, Inc., 9.375%, 08/01/11 4,680,600
2,000,000 Equitable of Iowa Cos., 8.50%, 02/15/05 2,105,518
-----------
6,786,118
-----------
- --------------------------------------------------------------------------
LEISURE PRODUCTS (3.8%)
3,000,000 Bass America, Inc., 8.125%, 03/31/02 3,078,765
2,000,000 Rank Group Finance, 6.75%, 11/30/04 1,864,620
-----------
4,943,385
-----------
- --------------------------------------------------------------------------
MACHINERY & CAPITAL GOODS (4.2%)
2,500,000 Atlas Copco AB, 7.75%, 09/01/09 2,465,485
1,000,000 Clark Equipment Co., 8.00%, 05/01/23 1,010,238
2,000,000 Worthington Industries, Inc.,
7.125%, 05/15/06 1,944,236
-----------
5,419,959
-----------
- --------------------------------------------------------------------------
MISCELLANEOUS (7.9%)
2,000,000 CSR America, Inc., 6.875%, 07/21/05 1,932,018
4,000,000 English China Clays Delaware, Inc.,
7.375%, 10/01/02 4,070,848
3,000,000 Mayne Nickless Ltd., 6.25%, 02/01/06 2,870,856
1,500,000 USEC, Inc., 6.625%, 01/20/06 1,421,669
-----------
10,295,391
-----------
- --------------------------------------------------------------------------
NATURAL GAS (4.6%)
2,000,000 Consolidated Natural Gas Co.,
7.375%, 04/01/05 2,011,966
2,000,000 K.N. Energy, Inc., 6.67%, 11/01/27 1,948,520
2,000,000 ONEOK, Inc., 7.75%, 08/15/06 2,018,776
-----------
5,979,262
-----------
- --------------------------------------------------------------------------
OIL & GAS / EXPLORATION & PRODUCTION (0.8%)
1,000,000 Texaco Capital, Inc., 7.75%, 02/15/33 990,158
-----------
- --------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (5.0%)
1,500,000 International Paper Co., 8.125%, 06/15/24 1,500,209
3,000,000 ITT Rayonier, Inc., 7.50%, 10/15/02 3,060,075
2,000,000 Willamette Industries, Inc., 7.35%, 07/01/26 2,009,818
-----------
6,570,102
-----------
- --------------------------------------------------------------------------
POLLUTION CONTROL (2.7%)
4,000,000 Waste Management, Inc., 8.75%, 05/01/18 3,523,100
-----------
- --------------------------------------------------------------------------
RAILROADS (1.5%)
2,000,000 CSX Corp., 7.25%, 05/01/27 2,007,594
-----------
- --------------------------------------------------------------------------
RETAIL (4.6%)
1,000,000 Dayton Hudson Co., 8.50% 12/01/22 1,031,493
3,000,000 May Department Stores Co., 8.30%, 07/15/26 3,032,970
2,000,000 Penney (J.C.) Co., Inc., 7.40%, 04/01/37 1,962,870
-----------
6,027,333
-----------
14 NATIONWIDE
<PAGE> 17
STATEMENT OF INVESTMENTS NATIONWIDE(R) BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
CORPORATE BONDS (CONTINUED)
- --------------------------------------------------------------------------
SERVICES (0.7%)
$ 1,000,000 Service Corp. International,
6.30%, 03/15/03 $ 858,825
------------
- --------------------------------------------------------------------------
TELECOMMUNICATIONS (2.4%)
3,000,000 Rochester Telephone Corp.,
8.77%, 04/16/01 3,088,653
------------
- --------------------------------------------------------------------------
TEXTILES / APPAREL MANUFACTURING (0.9%)
1,075,000 VF Corp., 9.25%, 05/01/22 1,168,401
------------
- --------------------------------------------------------------------------
UTILITIES / ELECTRIC (4.2%)
3,000,000 Montana Power Co., 7.00%, 03/01/05 2,974,203
2,500,000 Northwestern Corp., 7.10%, 08/01/05 2,501,623
------------
5,475,826
------------
TOTAL CORPORATE BONDS (cost $114,543,235) 110,911,936
------------
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT OBLIGATIONS (10.9%)
- --------------------------------------------------------------------------
GOVERNMENT-SPONSORED MORTGAGE-BACKED OBLIGATIONS (0.5%)
116,198 FHLMC-GNMA 29X, 6.75%, 02/25/23 109,794
232,396 FHLMC-GNMA 29Z, 6.75%, 04/25/24 205,693
353,987 FNMA REMIC Series15-G, 7.00%,
04/25/20 354,935
------------
TOTAL GOVERNMENT-SPONSORED MORTGAGE-BACKED
OBLIGATIONS (COST $682,621) 670,422
------------
- --------------------------------------------------------------------------
GOVERNMENT-TREASURY (10.4%)
11,500,000 U.S. Treasury Bond, 8.125%, 08/15/19
(cost $13,569,306) 13,544,838
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(cost $682,621) 14,215,260
------------
SHORT-TERM DEBT (2.3%)
- --------------------------------------------------------------------------
2,926,000 Sysco Corp., 5.35%, 11/01/99
(cost $2,926,000) 2,926,000
------------
TOTAL INVESTMENTS (cost $132,789,861) $129,124,626
============
- --------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
REMIC Real Estate Mortgage Investment Conduit
COST FOR FEDERAL INCOME TAX PURPOSES: $133,022,398.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NATIONWIDE 15
<PAGE> 18
NATIONWIDE(R) MUTUAL FUNDS
- --------------------------------------------------------------------------------
TAX-FREE INCOME FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide Tax-Free Income Fund (Class D) for
the 12-month period ended October 31, 1999 was -3.21%*, compared to -1.78% for
the Lehman Brothers Municipal Bond Index.
Yields were higher across the yield curve and the bond markets in
general produced negative returns. By maintaining a longer duration than the
index over the past year, the Fund underperformed the index as interest rates
trended higher. Rising interest rates coupled with weakened demand from its two
major institutional purchasers, property and casualty insurance companies and
municipal bond mutual funds, created a volatile period for the municipal bond
market.
Municipal bond demand was strongest from individuals, while the demand
from the institutional buyers was relatively anemic. The fixed income markets
had a continuing positive tone in the aftermath of the Federal Reserve's
announcement that it was reassuming a neutral policy stance after having
increased rates 25 basis points in June and again in August. However,
institutional selling pressure began to pick up during the month of August, as
the property and casualty insurance companies began to seek higher returns from
taxable bonds. Since the profitability results were uniformly disappointing for
property and casualty companies, demand for municipal bonds remained soft.
Municipal bond mutual funds also witnessed weakened demand from individuals
since April, when they began to seek higher returns through direct purchase of
municipal bonds. This also resulted in increased fund redemption. Bond funds
used this weakened environment to lock in losses through tax swapping. In this
instance, funds focused on swapping out of bonds with short calls and lower
coupons into new issues with strong call protection. As September rolled around,
the market continued to struggle in the face of heavier new issue supply and
continued reduced demand from the key institutional sectors. However, at the end
of October, the markets received positive economic data that calmed inflationary
fears and reflected slower growth in the economy. As a result, investors began
to return to the municipal bond market and prices began to increase.
Municipal bond investors should continue with caution as we expect to
see reduced demand from investors until municipal bonds become cheap enough to
represent relative value as an investment option. Municipal bonds generally
become compelling as an asset class when their price as a percentage of
Treasuries is more than 95% on the long end of the yield curve. Historically,
investors who purchase municipal bonds when this relationship occurs are
rewarded in the future. Fund management will maintain a long-term view, continue
to monitor market developments and make appropriate adjustments in portfolio
holdings as needed. The Nationwide Tax-Free Income Fund has a duration of 8.0
years, while the benchmark, the Lehman Brothers Municipal Bond Index, has a
duration of 7.2 years.
ALPHA L. BENSON, MBA
* PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS
REINVESTED.
FUND VALUE $232,399,211
PORTFOLIO COMPOSITION
(Subject to Change)
Other assets less liabilities 0.6%
Municipal Securities 99.4%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN +
(For Years Ended October 31, 1999)
CLASS A* CLASS B* CLASS D
YEARS w/O SC** w/SC(1) w/O SC** w/SC(2) w/O SC** w/SC(1)
- ---------------------------------------------------------------
1 -3.26% -7.61% -4.02% -8.61% -3.21% -7.56%
- ---------------------------------------------------------------
5 6.10% 5.13% 5.90% 5.58% 6.16% 5.19%
- ---------------------------------------------------------------
10 6.13% 5.64% 6.03% 6.03% 6.16% 5.67%
- ---------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns represent performance achieved prior to the creation of
the class (5/11/98), excluding the effect of the 0.25% (Class A) or
0.85% (Class B) 12b-1 fee. Had Class A or B been in existence for the
time periods presented, the Fund's performance for such classes would
have been lower as a result of the additional expenses.
**These returns do not reflect the effects of a sales charge.
(1) A 4.50% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted.
The CDSC declines to 0% after 6 years.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE - CLASS D SHARES
Fund LBMBI CPI
1989 $ 9,550 $ 10,000 $ 10,000
1990 $ 10,055 $ 10,742 $ 10,637
1991 $ 11,253 $ 12,050 $ 10,940
1992 $ 12,061 $ 13,062 $ 11,299
1993 $ 14,107 $ 14,900 $ 11,610
1994 $ 12,874 $ 14,250 $ 11,920
1995 $ 14,761 $ 16,366 $ 12,247
1996 $ 15,544 $ 17,299 $ 12,614
1997 $ 16,745 $ 18,759 $ 12,876
1998 $ 20,264 $ 13,068
1999 $ 19,904 $ 13,402
Comparative performance of $10,000 invested in the Tax-Free Income Fund, the
Lehman Brothers Municipal Bond Index (LBMBI)* and the Consumer Price Index
(CPI)** over a 10-year period ended 10/31/99. Unlike our Fund, these indices do
not reflect any fees, expenses or sales charges.
* The LBMBI consists of investment-grade tax-exempt bonds and includes
securities with at least one year to maturity and at least $100
million in par value outstanding.
**The CPI represents changes in prices of a basket of goods and
services purchased for consumption by urban households.
16 NATIONWIDE
<PAGE> 19
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (99.4%)
- ----------------------------------------------------------------------------
ALABAMA (7.6%)
$ 2,715,000 Alabama Housing Finance Authority
Single-Family Mortgage Revenue Bonds,
(Collateralized Home Mortgage Revenue
Bond Program), Series 1996-D,
6.00%, 2016 $ 2,741,987
2,000,000 Birmingham, Alabama General
Obligation Unlimited Tax Refunding
Revenue Bonds, Series 1992-B,
6.25%, 2016 2,063,320
1,100,000 Birmingham, Alabama General
Obligation Unlimited Tax Parking
Warrants, Series 1995-A,
5.90%, 2018 1,105,907
2,480,000 Birmingham, Alabama Water
Works & Sewer Board Refunding
Revenue Bonds, Series 1992,
6.125%, 2012 2,605,934
3,500,000 Birmingham, Alabama Water & Sewer
Revenue Warrants, Series 1998-A,
4.75%, 2029 2,794,925
2,500,000 Huntsville, Alabama General Obligation
Limited Tax Warrants, Series 1992-A,
6.00%, 2012 2,570,575
3,000,000 Jefferson County, Alabama Sewer
Capital Improvement Revenue Warrants,
Series A, 5.125%, 2029 2,584,620
1,500,000 Jefferson County, Alabama Sewer Capital
Improvement Revenue Warrants, Series A,
5.00%, 2033 1,243,980
------------
17,711,248
------------
- ----------------------------------------------------------------------------
ARIZONA (1.9%)
1,800,000 Mesa, Arizona Industrial Development
Authority Revenue Bonds, (Discovery
Health Systems), Series A, 5.625%, 2029 1,700,424
2,500,000 Salt River Project Agricultural
Improvement & Power District, Arizona
Electric System Revenue Bonds,
Series 1992-C, 6.20%, 2012 2,618,600
-----------
4,319,024
-----------
- ----------------------------------------------------------------------------
COLORADO (2.0%)
340,000 Colorado Housing Finance Authority
Single-Family Housing Revenue Refunding
Bonds, Series 1991-A, 7.15%, 2014 352,835
3,000,000 Denver, Colorado City & County Airport
Revenue Bonds, Series B, 5.00%, 2025 2,561,460
1,900,000 Denver, Colorado City & County Airport
Revenue Bonds, Series D, 5.50%, 2025 1,766,145
-----------
4,680,440
-----------
- ----------------------------------------------------------------------------
CONNECTICUT (1.9%)
4,115,000 Connecticut Housing Finance Authority
Housing Mortgage Finance Program
Bonds, Series 1992-B, 6.70%, 2012 4,336,305
-----------
- ----------------------------------------------------------------------------
DISTRICT OF COLUMBIA (1.0%)
2,500,000 District of Columbia General Obligation Unlimited
Bonds, Series A, 5.50%, 2029 2,211,625
-----------
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
- ----------------------------------------------------------------------------
Florida (1.5%)
$ 2,400,000 Jacksonville, Florida Electric Authority Bulk
Power Revenue Bonds, (Scherer 4 Project),
Issue 1, Series 1991-A, 7.00%, 2012 $ 2,502,362
1,000,000 Jacksonville, Florida Health Facilities
Authority Hospital Revenue Bonds,
(Charity Obligation Group), Series C,
5.375%, 2023 929,580
-----------
3,431,942
-----------
- ----------------------------------------------------------------------------
GEORGIA (2.5%)
1,000,000 Georgia Local Government Certificates of
Participation Grantor Trust, Series 1998-A,
4.75%, 2028 815,980
2,750,000 Georgia Municipal Electric Authority Power
Revenue Bonds, Series 1991-V,
6.60%, 2018 2,880,515
660,000 Georgia Residential Financial Authority, Home
Ownership Mortgage Revenue Bonds,
Series A, 7.50%, 2017 686,037
1,500,000 Georgia Private Colleges & Universities
Authority, Revenue Refunding Bonds,
(Mercer University Project), Series A,
5.25%, 2025 1,322,460
-----------
5,704,992
-----------
- ----------------------------------------------------------------------------
ILLINOIS (8.2%)
3,050,000 Chicago Park District, Illinois General Obligation
Unlimited Tax Park Bonds, Series 1996,
5.60%, 2021 2,845,436
1,000,000 Cook County, Illinois Capital Improvement
General Obligation Unlimited Bonds,
Series A, 5.00%, 2028 823,020
1,750,000 Illinois Developmental Finance Authority
Revenue Bonds, (Adventist Health
Systems / Sunbelt Obligation),
5.50%, 2020 1,493,433
3,000,000 Illinois Developmental Finance Authority
Revenue Bonds, (Adventist Health
Systems / Sunbelt Obligation),
5.65%, 2024 2,567,970
2,185,000 Illinois Educational Facility Authority
Revenue Bonds, (Loyola University),
Series 1991-A, 7.125%, 2021 2,324,578
1,000,000 Illinois Housing Development Authority,
Homeowner Mortgage Revenue Bonds,
Series 1994-A-1, 6.45%, 2017 1,022,040
2,500,000 Illinois State Building, Illinois Sales Tax
Revenue Bonds, Series V, 6.375%, 2017 2,640,875
3,000,000 Illinois State General Obligation Unlimited
Tax Bonds, Series 1994, 5.80%, 2019 2,934,540
1,500,000 Metropolitan Pier & Exposition Authority,
Illinois Dedicated State Tax Revenue Bonds,
(McCormick Place Expansion Project),
5.50%, 2024 1,388,520
1,000,000 Palatine, Illinois Corporate Purpose General
Obligation Unlimited Tax Bonds, Series 1985,
9.90%, 2016 1,028,340
-----------
19,068,752
-----------
NATIONWIDE 17
<PAGE> 20
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
- ----------------------------------------------------------------------------
INDIANA (3.0%)
$ 5,335,000 Indiana State Toll Road Commission East-West
Toll Road Revenue Bonds, Series 1980,
9.00%, 2015 $ 7,059,858
------------
- ----------------------------------------------------------------------------
KANSAS (0.7%)
1,500,000 Wichita, Kansas Hospital Revenue Refunding
Bonds, (Facilities Improvements Series XI),
6.75%, 2019* 1,540,395
------------
- ----------------------------------------------------------------------------
KENTUCKY (1.5%)
3,250,000 Jefferson County, Kentucky Jewish Hospital
Healthcare Services Health Facilities
Revenue Bonds, (Jewish Hospital, Inc.),
Series 1995, 6.50%, 2015 3,397,063
------------
- ----------------------------------------------------------------------------
MASSACHUSETTS (1.7%)
2,525,000 Massachusetts State General Obligation
Unlimited Tax Bonds, (Consolidated Loan),
Series 1992-B, 6.50%, 2013 2,677,258
1,700,000 Massachusetts State Health and Educational
Facilities Authority, Southcoast Health
Systems Revenue Bonds,
Series A, 4.75%, 2027 1,354,696
------------
4,031,954
------------
- ----------------------------------------------------------------------------
MICHIGAN (4.5%)
1,625,000 Cheboygan, Michigan Area Schools Unrefunded
Balance General Obligation Unlimited
Bonds, 5.60%, 2021 1,543,149
3,500,000 Michigan State General Obligation Unlimited
Tax Bonds, (Environmental Protection
Program), Series 1992, 6.25%, 2012 3,736,215
1,000,000 Michigan State Hospital Finance Authority
Refunding Revenue Bonds, (Henry Ford
Health), Series A, 5.25%, 2020 860,600
1,500,000 Michigan State Hospital Finance Authority
Refunding Revenue Bonds, (Henry Ford Health),
Series A, 6.00%, 2024 1,405,965
2,000,000 Michigan State Hospital Finance Authority
Revenue Bonds, (Ascension Health Credit),
Series A, 5.75%, 2018* 1,952,240
1,150,000 University of Michigan Higher Education
Housing Revenue Bonds, Series 1996-A,
5.125%, 2015 1,076,193
------------
10,574,362
------------
- ----------------------------------------------------------------------------
MINNESOTA (2.2%)
1,880,000 Minnesota Housing Finance Agency Rental Housing
Revenue Bonds, Series 1995-D,
5.90%, 2015 1,889,400
3,095,000 Minnesota State Housing Finance Agency
Single-Family Mortgage Revenue Bonds,
Series 1994-K, 6.40%, 2015 3,165,937
------------
5,055,337
------------
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
- ----------------------------------------------------------------------------
MISSOURI (0.9%)
$ 2,000,000 Missouri State Environmental Improvement &
Energy Resources Authority Water Pollution
Control Revenue Bonds, 6.55%, 2014 $ 2,108,680
------------
- ----------------------------------------------------------------------------
NEBRASKA (2.3%)
5,000,000 Nebraska Public Power District, Power Supply
System Revenue Bonds, Series 1993,
6.125%, 2015 5,317,350
------------
- ----------------------------------------------------------------------------
NEW HAMPSHIRE (0.6%)
1,500,000 New Hampshire State Turnpike Systems
Revenue Refunding Bonds, 5.34%, 2020 1,437,210
------------
- ----------------------------------------------------------------------------
NEW JERSEY (0.9%)
1,000,000 New Jersey State Transportation Trust Fund
Authority, Transportation Systems Revenue
Bonds, Series A, 5.75%, 2017 982,380
1,000,000 New Jersey Turnpike Authority, Turnpike
Revenue Bonds, Series 1991-C,
6.50%, 2016 1,054,450
------------
2,036,830
------------
- ----------------------------------------------------------------------------
NEW MEXICO (1.0%)
2,500,000 Bernalillo County, New Mexico Gross Receipts
Tax Revenue Bonds, 5.25%, 2026 2,260,225
------------
- ----------------------------------------------------------------------------
NEW YORK (0.4%)
1,000,000 New York Local Government Assistance
Corporation Revenue Refunding Bonds,
Series 1993-E, 6.00%, 2014 1,022,690
------------
- ----------------------------------------------------------------------------
NORTH CAROLINA (7.3%)
425,000 Charlotte-Mecklenburg Hospital Authority,
North Carolina Health Care Systems Revenue
Bond, Series 1992, 6.25%, 2020 424,422
1,000,000 Cummberland County, North Carolina
Hospital Facilities Revenue Bonds,
(Cummberland County Hospital
Systems, Inc.), 5.25%, 2019 878,430
1,460,000 North Carolina Housing Finance Agency
Multi-Family Revenue Refunding Bonds,
Series H, 5.95%, 2021 1,462,759
2,185,000 North Carolina Housing Finance Agency
Single-Family Revenue Bonds, Series GG,
5.90%, 2013 2,202,218
1,940,000 North Carolina Housing Finance Agency
Single-Family Revenue Bonds, Series AA,
6.25%, 2017 1,971,409
1,291,000 North Carolina Housing Finance Agency
Single-Family Revenue Bonds, Series J,
7.40%, 2022 1,320,306
1,070,000 North Carolina Housing Finance Agency
Single-Family Revenue Bonds, Series N,
7.40%, 2028 1,103,416
2,500,000 North Carolina Medical Care Commission
Hospital Revenue Bonds, (Firsthealth of
the Carolinas), 4.75%, 2026 1,978,550
18 NATIONWIDE
<PAGE> 21
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
- ----------------------------------------------------------------------------
NORTH CAROLINA (continued)
$ 4,300,000 North Carolina Medical Care Commission
Hospital Revenue Bonds, (Gaston Health
Care), 5.00%, 2029 $ 3,487,773
2,000,000 North Carolina Medical Care Commission
Hospital Revenue Refunding Bonds,
(North Carolina Baptist Hospitals Project),
Series 1992 A, 6.375%, 2014 2,051,100
------------
16,880,383
------------
- ----------------------------------------------------------------------------
OHIO (1.8%)
1,100,000 Franklin County, Ohio Hospital Refunding &
Improvement Revenue Bonds,
(The Children's Hospital Project),
Series 1996-A, 5.75%, 2020 1,028,698
1,000,000 Hamilton, Ohio City School District General
Obligation Bonds, Series A, 5.50%, 2019 944,130
2,000,000 Ohio Turnpike Commission, Turnpike Revenue
Bonds, Series 1996-A, 5.70%, 2017 2,118,320
------------
4,091,148
------------
- ----------------------------------------------------------------------------
PENNSYLVANIA (3.4%)
1,500,000 Pennsylvania Housing Finance Agency Rental
Housing Refunding Revenue Bonds,
Issue 1992, 6.25%, 2007 1,550,790
4,055,000 Pennsylvania Housing Finance Agency Rental
Housing Refunding Revenue Bonds,
Issue 1992, 6.40%, 2012 4,208,603
2,000,000 Pennsylvania State Turnpike Commission, Oil
Franchise Tax Revenue Bonds, Series A,
6.00%, 2014 2,150,580
------------
7,909,973
------------
- ----------------------------------------------------------------------------
SOUTH CAROLINA (7.3%)
4,980,000 Charleston, South Carolina Waterworks &
Sewer System Refunding & Capital
Improvement Revenue Bonds,
Series 1991, 6.00%, 2018 5,072,230
2,610,000 Greenville, South Carolina Hospital
Facilities, Hospital Systems Revenue Bonds,
Series B, 5.25%, 2017 2,349,391
3,075,000 South Carolina State Housing Finance &
Development Authority Homeownership
Mortgage Purchase Bonds,
Series 1994-A, 6.375%, 2016 3,196,278
1,500,000 South Carolina State Housing Finance &
Development Authority Multi-Family
Development Revenue Refunding Bonds,
Series 1992-A, 6.875%, 2023 1,566,075
1,000,000 South Carolina State Public Service Authority,
Revenue Bonds, Series A, 5.50%, 2022 936,650
3,000,000 South Carolina Transportation Infrastructure
Revenue Bonds, Series A, 5.375%, 2024 2,758,860
1,000,000 Spartanburg, South Carolina Water System
Revenue Bonds, Series 1996, 6.10%, 2021 1,068,470
------------
16,947,954
------------
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
- ----------------------------------------------------------------------------
TENNESSEE (2.1%)
$ 1,125,000 Nashville & Davidson County, Tennessee
Health & Educational Facilities Revenue
Bonds, (Meharry Medical College HEW
Collateralized), Series 1979,
7.875%, 2004 $ 1,206,551
4,200,000 Shelby County, Tennessee Health
Educational & Housing Facilities Board
Revenue Bonds, (St. Judes Childrens
Research), 5.375%, 2024 3,764,376
------------
4,970,927
------------
- ----------------------------------------------------------------------------
TEXAS (16.4%)
2,325,000 Beaumont Independent School District, Texas
General Obligation Unlimited Tax School
Building Bonds, Series 1996, 5.00%, 2016 2,100,312
1,300,000 Collin County, Texas Permanent Improvement
General Obligation Limited Tax Bond,
Series A, 5.50%, 2019 1,237,392
2,000,000 Comal Independent School District, Texas
General Obligation Unlimited Tax
School Building and Refunding Bonds,
5.625%, 2019 1,917,900
2,300,000 Fort Bend Independent School District, Texas,
General Obligation Unlimited Tax Bonds,
Series 1996, 5.00%, 2018 2,289,052
1,350,000 Fort Worth, Texas General Obligation Limited
Tax Bonds, 5.625%, 2017 1,319,692
1,000,000 Gulf Coast Waste Disposal Authority,
Texwaste Disposal Revenue Bonds, (Valero
Energy Corp. Project), 5.70%, 2032 870,600
5,325,000 Harris County, Texas Health Facilities
Development Corporation Revenue
School Health Care Systems,
Series B, 5.75%, 2027 5,146,186
2,500,000 Houston Independent School District, Texas
General Obligation Limited Tax School
House Refunding Bonds, Series 1997,
5.375%, 2017 2,369,100
7,000,000 Houston Independent School District, Texas
General Obligation Limited Tax School
House Refunding Bonds,
Series A, 4.75%, 2026 5,698,000
1,000,000 Houston, Texas Water & Sewer Junior Lien
Revenue Refunding Bonds, Series 1991-C,
6.375%, 2017 1,037,800
1,245,000 Lower Colorado River Authority, Texas Junior
Lien Refunding Revenue Bonds, Escrowed
Series 1992, 6.00%, 2017 1,281,117
515,000 Lower Colorado River Authority, Texas Junior
Lien Refunding Revenue Bonds,
Unrefunded Series 1992, 6.00%, 2017 531,562
650,000 Lower Colorado River Authority, Texas Junior
Lien Refunding Revenue Bonds,
Unrefunded Series 1992, 6.00%, 2017 653,198
1,250,000 Port Corpus Christi, Texas, Industrial
Development Corporation Revenue
Refunding Bonds, (Valero Energy Corp.),
Series 1998-A, 5.45%, 2027 1,071,488
NATIONWIDE 19
<PAGE> 22
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND (CONTINUED)
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
- ----------------------------------------------------------------------------
TEXAS (continued)
$ 2,000,000 Texas A&M University System Board
of Regents, Revenue Financing System
Bonds, Series 1996, 5.375%, 2014 $ 1,926,140
1,810,000 Texas State Water Development Board State
Revolving Fund Senior Lien Revenue Bonds,
Program Series 1997 A, 5.25%, 2019 1,644,132
1,000,000 Texas State Water Development Board State
Revolving Fund Senior Lien Revenue Bonds,
Series B, 5.00%, 2019 871,460
2,415,000 Texas State Water Development, General
Obligation Limited Tax Bonds, Series 1994,
6.90%, 2017 2,561,542
760,000 Texas State Water Development, General
Obligation Limited Tax Bonds, Series 1994,
6.90%, 2017 829,616
2,655,000 Weatherford Independent School District,
Texas, General Obligation Unlimited Tax
School Building and Refunding Bonds,
Series 1994, 6.50%, 2015 2,867,028
------------
38,223,317
------------
- ----------------------------------------------------------------------------
UTAH (0.4%)
1,000,000 Utah State Housing Finance Agency
Multi-Family Housing Revenue Refunding
Bonds, (Cottonwoods Apartment Project),
Issue 1995, 6.30%, 2015 1,019,380
------------
- ----------------------------------------------------------------------------
VIRGINIA (6.9%)
940,000 Fairfax County, Virginia Water Authority
Water Refunding Revenue Bonds,
Series 1992, 6.00%, 2022 944,803
1,545,000 Henrico County, Virginia Water and Sewer
System Refunding Revenue Bonds,
Series 1994, 5.875%, 2014 1,641,562
1,205,000 Henrico County, Virginia Water and Sewer
System Refunding Revenue Bonds,
Series 1994, 5.875%, 2014 1,224,605
1,000,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue Bonds,
Series B-2, 6.50%, 2010 1,027,340
1,080,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue Bonds,
Series 1995-D-1, 5.95%, 2013 1,083,132
2,900,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue Bonds,
Subseries C-7, 6.30%, 2015 2,938,019
1,000,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue Bonds,
Series 1995-B-3, 6.35%, 2015 1,016,500
1,930,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue Bonds,
Series 1995-B-3, 6.35%, 2016 1,961,845
2,000,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue Bonds,
Series 1992-A, 7.10%, 2022 2,046,660
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
- ----------------------------------------------------------------------------
VIRGINIA (CONTINUED)
$ 2,000,000 Virginia Public School Authority School
Financing Revenue Bonds, (1991 Resolution),
Series 1994-A, 6.20%, 2013 $ 2,087,880
------------
15,972,346
------------
- ----------------------------------------------------------------------------
WASHINGTON (5.1%)
6,405,000 Central Pugent Sound, Washington Regional
Transit Authority Sales Tax & Motor Bonds,
4.75%, 2028 5,158,267
4,000,000 Seattle, Washington Water System Revenue
Bonds, 5.375%, 2029 3,610,880
3,500,000 Washington State Motor Vehicle Fuel Tax
General Obligation Unlimited Tax Bonds,
Series 1997-D, 5.375%, 2022 3,201,065
------------
11,970,212
------------
- ----------------------------------------------------------------------------
WISCONSIN (2.4%)
1,000,000 Wisconsin Housing and Economic Development
Authority, Home Ownership Revenue Bonds,
Series A, 5.65%, 2010 1,011,890
2,000,000 Wisconsin State General Obligation Unlimited
Tax Bonds, Series 1992-A, 6.30%, 2011 2,087,880
2,500,000 Wisconsin State Transportation Revenue
Bonds, Series A, 5.50% 2012 2,585,850
------------
5,685,620
------------
TOTAL MUNICIPAL SECURITIES (COST $232,961,669) $230,977,542
============
- ----------------------------------------------------------------------------
Cost for Federal income tax purposes: $233,026,827.
*Denotes when-issued security.
Portfolio holding percentages represent market value as a percentage of net
assets.
See accompanying notes to financial statements.
Distribution of investments, as a percentage of total investment in securities
at value, is as follows:
- ----------------------------------------------------------------------------
INDUSTRY PERCENT % MKT. VALUE
County/City School Districts 8.0% $18,784,541
Education 4.8% 11,036,077
Electric Utilities 6.2% 14,255,475
Hospitals 14.2% 32,698,347
Housing 19.4% 44,881,161
Miscellaneous 7.4% 17,091,709
Political Subdivision - Cities/Counties 5.5% 12,675,231
States, Territories and Possessions 7.8% 18,028,116
Transportation 13.8% 31,845,005
Water, Sewer and Combined Utilities 12.9% 29,681,880
------ ------------
100.0% $230,977,542
====== ============
20 NATIONWIDE
<PAGE> 23
NATIONWIDE(R) MUTUAL FUNDS
- --------------------------------------------------------------------------------
LONG-TERM U.S. GOVERNMENT
BOND FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide Long-Term U.S. Government Bond Fund
(Class D) for the 12 month period ended October 31, 1999, was -2.39%*, compared
to -1.20% for the Merrill Lynch Government Master Index.
The last 12 months have been difficult for bond investors. By
maintaining a longer duration than the index over the past year, the Fund
performed the index as interest rates trended higher. The Federal Reserve's
decision to tighten was initially characterized as reversing the 1998 easing
policy to contain the Asian crisis. Further tightening was done to prevent
potential inflation as the U.S. economy continued to exhibit strength. Yields on
long-term Treasuries have risen by 1.00%-1.50% over the period.
The rising interest rate environment has obscured the fundamental value
available in the U.S. Government market. From a historical perspective, the
current yields available are attractive. For example, 10-year Agency bonds can
be purchased at an additional yield of 0.70% above Treasuries, which is nearly
double the level at which identical bonds could be purchased in July 1998.
Although it has been a difficult period for long-term investors, the
correction appears close to ending. Even if the Federal Reserve was to raise
rates one or two more times, the long end of the yield can perform well since
inflation expectations would diminish. The Fund maintains its exposure in this
longer maturity part of the yield curve market with nearly 50% of assets
invested here.
When I become convinced the correction in interest rates is over, I
plan to deploy the remaining cash reserves and sell the short duration
mortgage-backed positions in favor of intermediate positions. The combination of
these moves should allow for shareholders to benefit from future decreases in
interest rates.
The Fund continues to be invested in sectors of the Government Agency
and mortgage-backed markets perceived to be undervalued. Approximately 20% of
portfolio assets are invested in the mortgage-backed market, 49% is invested in
Government Agencies, and 25% in U.S. Treasuries.
GARY R. HUNT, MBA, CFA
* Performance without sales charge and assuming all distributions
reinvested.
FUND VALUE $36,033,145
PORTFOLIO COMPOSITION
(Subject to Change)
Repurchase Agreement 6.1%
U.S. Government Obligations 93.0%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN
(For Periods Ended October 31, 1999)
CLASS A* CLASS B* CLASS D
YEARS w/O SC** w/SC(1) w/O SC** w/SC(2) w/O SC** w/SC(1)
- ----------------------------------------------------------------------------
1 -2.63% -7.01% -3.15% -7.77% -2.39% -6.78%
- ----------------------------------------------------------------------------
5 7.59% 6.61% 7.40% 7.09% 7.67% 6.68%
- ----------------------------------------------------------------------------
10 7.69% 7.19% 7.59% 7.59% 7.72% 7.23%
- ----------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns represent performance achieved prior to the creation
of the class (5/11/98), excluding the effect of the 0.25% (Class A)
or 0.85% (Class B) 12b-1 fee. Had Class A or B been in existence
for the time periods presented, the Fund's performance for such
classes would have been lower as a result of the additional
expenses.
** These returns do not reflect the effects of a sales charge.
(1) A 4.50% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted.
The CDSC declines to 0% after 6 years.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE - CLASS D SHARES
FUND MLGMI CPI
1989 $ 9,550 $10,000 $10,000
1990 $10,211 $10,594 $10,637
1991 $11,870 $12,145 $10,940
1992 $13,167 $13,401 $11,299
1993 $14,584 $15,144 $11,610
1994 $13,891 $14,489 $11,920
1995 $16,208 $16,722 $12,247
1996 $17,020 $17,565 $12,614
1997 $18,524 $19,089 $12,876
1998 $20,590 $21,253 $13,068
1999 $20,098 $20,999 $13,402
Comparative performance of $10,000 invested in the Long-Term U.S. Government
Bond Fund, the Merrill Lynch Government Master Index (MLGMI)* and the Consumer
Price Index (CPI)** over a 10-year period ended 10/31/99. Unlike our Fund, these
indices do not reflect any fees, expenses or sales charges.
* The MLGMI consists of U.S. Treasury notes and bonds with one or more
years remaining to final maturity and at least $1 billion in face
value outstanding, and US. agencies with one or more years remaining
to final maturity and at least $100 million in face value
outstanding.
**The CPI represents changes in prices of a basket of goods and
services purchased for consumption by urban households.
NATIONWIDE 21
<PAGE> 24
STATEMENT OF INVESTMENTS NATIONWIDE LONG-TERM U.S. GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT SPONSORED AND AGENCY
OBLIGATIONS (93.0%)
- ----------------------------------------------------------------------------
GOVERNMENT - MORTGAGE-BACKED (68.5%)
$ 4,000,000 FHLMC, 6.80%, 08/22/05 $ 4,052,104
2,000,000 FHLMC, 6.75%, 05/30/06 2,016,456
2,000,000 FHLMC, 6.22%, 03/18/08 1,899,330
5,000,000 Resolution Funding STRIPS,
0.00%, 07/15/13 1,994,540
2,000,000 FHLMC REMIC Series 1313-G,
7.25%, 06/15/07 2,017,946
1,093,291 FHLMC REMIC Series 31-E,
7.55%, 05/15/20 1,101,163
2,000,000 FHLMC REMIC Series 2122-QR,
6.25%, 01/15/28 1,850,398
1,971,560 FNMA Pool 380488, 6.10%, 07/01/08 1,854,315
1,983,396 FNMA Pool 381019, 6.27%, 12/01/08 1,913,136
1,834,292 FNMA Pool 381146, 6.04%, 01/01/09 1,714,470
1,971,611 FNMA Pool 380311, 6.30%, 05/01/13 1,877,983
2,373,270 FNMA REMIC Series 126-VB,
8.00%, 07/25/02 2,408,955
------------
TOTAL GOVERNMENT - MORTGAGE-BACKED
(cost $24,965,875) 24,700,796
------------
- ----------------------------------------------------------------------------
GOVERNMENT - TREASURY (24.5%)
2,000,000 U.S. Treasury Note, 10.00%, 05/15/10 2,338,124
5,500,000 U.S. Treasury Bond, 8.125%, 08/15/19 6,477,966
------------
TOTAL GOVERNMENT - TREASURY 8,816,090
(cost $9,066,327) ------------
TOTAL U.S. GOVERNMENT SPONSORED AND
AGENCY OBLIGATIONS
(cost $34,042,202) 33,516,886
------------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (6.1%)
- ----------------------------------------------------------------------------
$ 2,200,000 Fifth Third Bank 5.06%, 11/01/99,
Collateralized by $2,244,000 FHLMC Gold
Pool #E00570, 6.00%, 09/01/13, market
value $2,200,000 (cost $2,200,000) $ 2,200,000
------------
TOTAL INVESTMENTS (cost $36,242,202) $ 35,716,886
============
- ----------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Association
REMIC Real Estate Mortgage Investment Conduit
STRIPS Separate Trading of Registered Interest and Principal
Securities
COST ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 NATIONWIDE
<PAGE> 25
NATIONWIDE(R) MUTUAL FUNDS
- --------------------------------------------------------------------------------
INTERMEDIATE U.S. GOVERNMENT
BOND FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide Intermediate U.S. Government Bond
Fund (Class D) for the 12 month period ended October 31, 1999, was -0.93%*,
compared to -1.20% for the Merrill Lynch Government Master Index.
The last 12 months have been difficult for bond investors. By
maintaining a shorter duration than the index over the past year, the Fund
outperformed the index as interest rates trended higher. The Federal Reserve's
decision to tighten was initially characterized as reversing the 1998 easing
policy to contain the Asian crisis. Further tightening was done to prevent
potential inflation as the U.S. economy continued to exhibit strength. Bonds
have been especially hard hit across the entire yield curve and intermediate
bonds were not spared, as the five-year Treasury yields have risen nearly 1.75%
over the period.
The rising interest rate environment has obscured the fundamental
value available in the U.S. Government market. From a historical perspective,
the current yields available are attractive. For example, 10-year Agency bonds
can be purchased at a yield of 0.70% above Treasuries, which is nearly double
the level the identical bonds could be purchased in July 1998.
During the past year I have focused on improving the overall quality
of the portfolio. Mortgage holdings with better risk/reward profiles have been
added, and I have swapped into larger Agency issues to improve the liquidity of
the portfolio. The U.S. Treasury position has been increased from 8% to 34% of
holdings. The Treasury holdings are intermediate duration callable issues, with
yields that approach those available on Agencies and long-duration 20-year
Treasuries. The 20-year part of the U.S. Treasury curve yields approximately
0.40% more than the 30-year issues and has performed well in the flattening
yield curve environment.
The Fund is currently maintaining its exposure to the bond market by
investing in a barbell of short and longer maturities. A switch to a portfolio
with an intermediate exposure is expected soon to take advantage of an
environment of stable or falling interest rates.
GARY R. HUNT, MBA, CFA
* PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS
REINVESTED.
FUND VALUE $103,009,785
PORTFOLIO COMPOSITION
(Subject to change)
Repurchase Agreement 7.7%
U.S. Government Obligations 90.9%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Periods Ended October 31, 1999)
CLASS A* CLASS B* CLASS D
YEARS w/o SC** w/SC(1) w/o SC** w/SC(2) w/o SC** w/SC(1)
1 -1.05% -5.51% -1.57% -6.25% -0.93% -5.39%
5 7.53% 6.54% 7.33% 7.03% 7.59% 6.61%
Life 6.12% 5.49% 6.00% 6.00% 6.17% 5.54%
Life of the Fund is since 2/10/92.
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns represent performance achieved prior to the creation of
the class (5/11/98), excluding the effect of the 0.25% (Class A) or
0.85% (Class B) 12b-1 fee. Had Class A or B been in existence for the
time periods presented, the Fund's performance for such classes would
have been lower as a result of the additional expenses.
** These returns do not reflect the effects of a sales charge.
(1) A 4.50% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted. The
CDSC declines to 0% after 6 years.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
Fund Performance - Class D Shares
Fund MLGMI CPI
1992 $10,041 $10,741 $10,245
1993 $11,060 $12,137 $10,527
1994 $10,596 $11,612 $10,809
1995 $12,341 $13,402 $11,105
1996 $12,992 $14,078 $11,437
1997 $14,143 $15,299 $11,676
1998 $15,421 $17,033 $11,849
1999 $15,278 $16,830 $12,153
Comparative performance of $10,000 invested in the Intermediate U.S. Government
Bond Fund, the Merrill Lynch Government Master Index (MLGMI)* and the Consumer
Price Index (CPI)** since the Fund's inception (2/10/92) to 10/31/99. Unlike our
Fund, these indices do not reflect any fees, expenses or sales charges.
* The MLGMI consists of U.S. Treasury notes and bonds with one or more
years remaining to final maturity and at least $1 billion in face
value outstanding, and US. agencies with one or more years remaining
to final maturity and at least $100 million in face value
outstanding.
** The CPI represents changes in prices of a basket of goods and
services purchased for consumption by urban households.
NATIONWIDE 23
<PAGE> 26
STATEMENT OF INVESTMENTS NATIONWIDE INTERMEDIATE U.S. GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT SPONSORED AND AGENCY
OBLIGATIONS (90.9%)
- ----------------------------------------------------------------------------
GOVERNMENT - AGENCY (9.4%)
$ 1,000,000 Federal Farm Credit, 7.16%, 05/15/06 $ 1,017,635
3,000,000 FHLB, 5.19%, 10/20/03 2,866,980
1,900,000 FHLB, 5.425%, 01/29/04 1,819,685
2,000,000 FHLB, 6.95%, 03/26/07 2,029,638
2,000,000 FHLB, 6.53%, 07/23/07 1,977,294
------------
TOTAL GOVERNMENT - AGENCY
(cost $10,282,108) 9,711,232
------------
- ----------------------------------------------------------------------------
GOVERNMENT - SPONSORED MORTGAGE-BACKED OBLIGATIONS (47.9%)
9,350,000 FHLMC, 6.52%, 01/02/02 9,409,167
3,000,000 FHLMC, 5.98%, 12/08/05 2,914,710
3,423,805 FHLMC REMIC Series 1462-PT,
7.50%, 01/15/03 3,460,642
3,000,000 FHLMC REMIC Series 1313-G,
7.25%, 06/15/07 3,026,919
1,000,000 FHLMC REMIC Series 1512-HB,
6.50%, 02/15/08 988,940
2,000,000 FHLMC REMIC Series 1560-PN,
7.00%, 12/15/12 2,012,080
5,000,000 FHLMC REMIC Series 1688-J,
6.00%, 12/15/13 4,821,750
2,915,442 FHLMC REMIC Series 31-E,
7.55%, 05/15/20 2,936,434
5,000,000 FNMA, 6.23%, 07/18/02 4,976,360
941,103 FNMA Pool 73341, 6.31%, 11/01/06 911,733
985,780 FNMA Pool 380488, 6.10%, 07/01/08 927,158
1,983,396 FNMA Pool 381019, 6.27%, 12/01/08 1,913,136
5,016,098 FNMA Pool 460221, 6.32%, 04/01/14 4,855,929
889,976 FNMA REMIC Series 126-VB, 8.00%, 07/25/02 903,358
161,919 FNMA REMIC Series 25-B, 9.25%, 10/25/18 170,229
929,559 FNMA REMIC Series 7-B, 8.50%, 01/25/20 956,680
2,000,000 Resolution Funding STRIPS, 0.00%, 07/15/07 1,225,156
7,500,000 Resolution Funding STRIPS, 0.00%, 10/15/13 2,939,460
------------
TOTAL GOVERNMENT - SPONSORED
MORTGAGE-BACKED OBLIGATIONS
(cost $49,557,679) 49,349,841
------------
- ----------------------------------------------------------------------------
GOVERNMENT TREASURY (33.6%)
3,000,000 U.S. Treasury Bond, 10.375%, 11/15/12 3,735,000
3,000,000 U.S. Treasury Bond, 8.875%, 02/15/19 3,771,561
9,000,000 U.S. Treasury Bond, 8.125%, 08/15/19 10,600,308
5,000,000 U.S. Treasury Note, 7.875%, 11/15/04 5,384,375
5,000,000 U.S. Treasury Note, 7.00%, 07/15/06 5,221,875
5,000,000 U.S. Treasury Note, 10.00%, 05/15/10 5,845,310
------------
TOTAL GOVERNMENT TREASURY (COST $35,337,377) 34,558,429
------------
TOTAL U.S. GOVERNMENT SPONSORED AND AGENCY OBLIGATIONS
(cost $95,177,164) 93,619,502
------------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (7.7%)
- ----------------------------------------------------------------------------
$ 7,921,000 Fifth Third Bank 5.06%, 11/01/99,
Collateralized by $8,005,000 FHLMC Pool
G10657, 7.50%, 02/01/12,
market value $8,080,046
(cost $7,921,000) $ 7,921,000
------------
TOTAL INVESTMENTS (COST $103,098,164) $101,540,502
============
- ----------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Association
REMIC Real Estate Mortgage Investment Conduit
STRIPS Separate Trading of Registered Interest and Principal
Securities
COST ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 NATIONWIDE
<PAGE> 27
NATIONWIDE(R) MUTUAL FUNDS
- --------------------------------------------------------------------------------
MONEY MARKET FUND
MANAGEMENT DISCUSSION OF FUND
The total return for the Nationwide Money Fund Prime Shares for the
12-month period ended October 31, 1999, was 4.61%, compared to 2.63% for the
Consumer Price Index.
The fiscal year began in November 1998 as the Federal Reserve reduced
the Federal Funds rate, the interest rate banks charge depository institutions
for loans, to 4.75% from 5.00%. The Federal Reserve increased the rate back to
5.00% on June 30, 1999, and to 5.25% on August 24, 1999. Officials at the
Federal Reserve are concerned that demand may be increasing too rapidly relative
to the supply of labor and other resources. They are also concerned about the
U.S. trade deficit and the rise in equity markets.
In this volatile economic environment, the Fund has maintained an
average maturity below 45 days. This enabled it to earn competitive returns for
investors as interest rates trended higher during the second half of the fiscal
year.
Extra emphasis is being placed on liquidity going into the new year.
While we don't expect an exodus of shareholders or computer malfunctions, the
Fund is only investing in issues that have a strong secondary market.
All investments are in compliance with Rule 2a-7, Investment Company
Act of 1940. This rule governs the investment decisions of registered money
market mutual funds. Eligible investments must have two ratings in the highest
rating category from nationally recognized securities rating organizations:
Moody's Investors Services, Inc., Standard & Poor's Corporation, Duff & Phelps,
Fitch IBCA, Inc., or Thompson Bank Watch.
A determination of minimal credit risk for all approved issuers is
made prior to investment for the Fund. The maximum investment in a single issuer
is 5% of fund assets and the maximum industry concentration is 25% of fund
assets.
PATRICIA A. MYNSTER
* NOT SUBJECT TO SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
FUND VALUE $1,367,636,600
PORTFOLIO COMPOSITION
(Subject to Change)
Canadian Bonds 0.7%
U.S. Government Obligations 5.4%
Corporate Notes 0.4%
Commercial Paper 93.4%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Periods Ended October 31, 1999)
YEARS PRIME SHARES CLASS R SHARES
- ----------------------------------------------------------------------------
1 4.61% -
- ----------------------------------------------------------------------------
5 5.07% -
- ----------------------------------------------------------------------------
10 4.88% -
- ----------------------------------------------------------------------------
Life* - 3.69%
- ----------------------------------------------------------------------------
There is no sales charge on the shares of the Money Market Fund. Past
performance is no guarantee of future results.
* Class R Shares were first offered to the public on January 4, 1999.
+ See legend on inside back cover.
An investment in the Money Market Fund is neither insured nor guaranteed by the
FDIC or any other government agency. Although the Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in the Fund.
FUND PERFORMANCE - PRIME SHARES
Fund CPI
1989 $10,000 $10,000
1990 $10,795 $10,637
1991 $11,457 $10,940
1992 $11,861 $11,299
1993 $12,170 $11,610
1994 $12,576 $11,920
1995 $13,263 $12,247
1996 $13,933 $12,614
1997 $14,640 $12,876
1998 $15,394 $13,068
1999 $16,104 $13,402
Comparative performance of $10,000 invested in the Money Market Fund and the
Consumer Price Index (CPI)* over a 10-year period ended 10/31/99. Unlike our
Fund, these indices do not reflect any fees or expense.
* The CPI represents changes in prices of a basket of goods and
services purchased for consumption by urban households.
NATIONWIDE 25
<PAGE> 28
STATEMENT OF INVESTMENTS NATIONWIDE(R) MONEY MARKET FUND
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
CANADIAN GOVERNMENT OBLIGATIONS (0.7%)
- ----------------------------------------------------------------------------
BRITISH COLUMBIA (PROVINCE)
$ 9,930,000 5.29%, 12/06/99 (cost $9,878,930) $ 9,878,930
------------
COMMERCIAL PAPER (93.4%)
- ----------------------------------------------------------------------------
ASSET-BACKED SECURITIES (8.9%)
Delaware Funding (Private Placement*)
20,000,000 5.38-5.41%, 12/07/99 19,892,400
5,000,000 5.78%, 01/24/00 4,932,567
Falcon Asset Securitization Corp.
(Private Placement*)
705,000 5.35%, 11/02/99 704,895
25,935,000 5.33%, 11/23/99 25,850,524
15,000,000 5.35%, 12/01/99 14,933,125
525,000 5.35%, 12/14/99 521,645
Preferred Receivables Funding
(Private Placement*)
10,000,000 5.37%, 11/15/99 9,979,117
6,000,000 5.38%, 11/19/99 5,983,890
10,000,000 5.33%, 11/22/99 9,968,908
9,000,000 5.35%, 12/02/99 8,958,538
5,000,000 5.35%, 12/03/99 4,976,222
Variable Funding Capital Corp.
(Private Placement*)
10,000,000 5.36%, 11/09/99 9,988,089
5,000,000 5.38%, 11/24/99 4,982,814
------------
121,672,734
------------
- ----------------------------------------------------------------------------
AUTO / FINANCE (7.7%)
American Honda Finance Corp.
17,000,000 5.31%, 11/17/99 16,959,880
20,599,000 5.92%, 01/19/00 20,331,396
1,800,000 5.95%, 01/27/00 1,774,118
Ford Motor Credit Co.
10,000,000 5.69%, 01/12/00 9,886,200
General Motors Acceptance Corp.
31,000,000 5.28%, 11/19/99 30,918,160
10,000,000 5.30%, 12/10/99 9,942,583
5,000,000 4.85%, 12/13/99 4,971,708
10,000,000 5.33%, 12/16/99 9,933,375
------------
104,717,420
------------
- ----------------------------------------------------------------------------
BANKS (10.1%)
First Union Corp.
8,000,000 5.98%, 01/14/00 7,901,662
J.P. Morgan & Co.
12,079,000 5.16%, 11/03/99 12,075,537
12,000,000 5.30-5.33%, 11/15/99 11,975,243
2,549,000 5.97-6.00%, 01/18/00 2,515,863
10,000,000 5.97%, 01/19/00 9,868,992
10,000,000 5.97-6.00%, 01/20/00 9,867,333
Mellon Financial Co
22,500,000 5.34%, 11/29/99 22,406,550
22,500,000 5.34%, 12/20/99 22,336,462
National City Credit Corp.
10,000,000 5.31%. 11/02/99 9,998,525
20,000,000 5.99%. 01/25/00 19,717,139
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (CONTINUED)
- ----------------------------------------------------------------------------
BANKS (CONTINUED)
Wells Fargo & Co.
$10,000,000 5.29%, 11/02/99 $ 9,998,530
------------
138,661,836
------------
- ----------------------------------------------------------------------------
BROKER / DEALERS (7.2%)
Bear Stearns Cos., Inc.
15,000,000 6.00%, 01/13/00 14,817,500
15,000,000 6.00%, 01/14/00 14,815,000
5,000,000 5.71% Variable 01/28/00** 5,000,000
Merrill Lynch & Co.
1,212,000 5.25%, 11/10/99 1,210,409
1,518,000 5.30%, 11/16/99 1,514,648
10,000,000 5.30-5.31%, 11/17/99 9,976,444
23,457,000 5.31%, 11/18/99 23,398,182
8,177,000 5.32%, 12/03/99 8,138,332
10,000,000 5.95%, 01/21/00 9,866,125
Morgan Stanley Dean Witter & Co.
10,422,000 6.07%, 01/20/00 10,281,419
------------
99,018,059
------------
- ----------------------------------------------------------------------------
CAPTIVE FINANCING (0.8%)
Prudential Funding Corp.
10,000,000 5.31%, 11/23/99 9,967,550
1,097,000 6.02%, 01/10/00 1,084,159
------------
11,051,709
------------
- ----------------------------------------------------------------------------
CONSUMER PRODUCTS (0.5%)
Clorox Co.
7,000,000 5.28%, 12/03/99 6,967,147
------------
- ----------------------------------------------------------------------------
CONSUMER SALES FINANCE (11.3%)
American Express Credit Corp.
30,000,000 5.29%, 11/12/99 29,951,508
2,066,000 5.30%, 11/22/99 2,059,612
15,000,000 5.31%, 12/13/99 14,907,075
10,000,000 5.31%, 12/14/99 9,936,575
American General Finance Corp.
10,000,000 5.31%, 12/08/99 9,945,425
40,000,000 5.30%, 12/14/99 39,746,778
Associates Corp. of North America
20,000,000 5.30%, 11/08/99 19,979,389
5,000,000 5.32%, 12/09/99 4,971,922
Associates First Capital BV
10,000,000 5.31%, 11/01/99 10,000,000
5,000,000 6.02%, 01/14/00 4,938,128
Norwest Financial, Inc.
7,587,000 5.30%, 11/26/99 7,559,076
------------
153,995,488
------------
- ----------------------------------------------------------------------------
DATA PROCESSING & REPRODUCTION (3.3%)
First Data Corp.
5,000,000 5.31%, 11/16/99 4,988,938
25,000,000 5.30%, 11/19/99 24,933,750
5,000,000 5.31%, 12/21/99 4,963,125
10,000,000 5.95%, 01/18/00 9,871,083
------------
44,756,896
------------
26 NATIONWIDE
<PAGE> 29
STATEMENT OF INVESTMENTS NATIONWIDE(R) MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (CONTINUED)
- ----------------------------------------------------------------------------
DIVERSFIED FINANCE (11.1%)
CIT Group, Inc.
$15,000,000 5.30%, 11/08/99 $ 14,984,541
12,000,000 5.30%, 11/24/99 11,959,367
12,000,000 5.31%, 12/15/99 11,922,120
9,970,000 5.31%, 12/16/99 9,903,824
Finova Capital Corp.
3,365,000 5.39%, 11/03/99 3,363,993
13,875,000 5.36-5.40%, 11/05/99 13,866,680
12,500,000 5.37%, 11/08/99 12,486,948
6,556,000 5.32%, 11/09/99 6,548,249
10,000,000 5.40%, 11/10/99 9,986,500
General Electric Capital Corp.
15,000,000 5.30-5.32%, 11/15/99 14,969,064
5,000,000 5.31%, 11/16/99 4,988,938
5,000,000 5.32%, 11/17/99 4,988,178
20,000,000 5.30-5.33%, 11/30/99 19,914,369
5,000,000 6.04%, 01/20/00 4,932,889
7,500,000 4.95%, 04/13/00 7,500,000
------------
152,315,660
------------
- ----------------------------------------------------------------------------
ENTERTAINMENT (0.1%)
Walt Disney Co.
1,500,000 5.32%, 11/08/99 1,498,448
------------
- ----------------------------------------------------------------------------
FINANCIAL SERVICES / MISCELLANEOUS (6.9%)
Citicorp
20,000,000 5.25%, 11/03/99 19,994,167
25,000,000 5.29%, 11/04/99 24,988,979
10,000,000 5.25%, 11/23/99 9,967,917
Heller Financial, Inc.
40,000,000 5.42%, 12/09/99 39,771,155
------------
94,722,218
------------
- ----------------------------------------------------------------------------
FINANCIAL SERVICES / UTILITIES (1.8%)
National Rural Utilities Cooperative
Finance Corp.
25,000,000 5.33%, 11/16/99 24,944,479
------------
- ----------------------------------------------------------------------------
FOOD & BEVERAGE (5.2%)
Best Foods, Inc. (Private Placement*)
8,947,000 5.29%, 11/19/99 8,923,335
Campbell Soup Co.
10,181,000 5.29%, 12/01/99 10,136,119
Heinz (H.J.) Co.
30,932,000 5.29%, 11/18/99 30,854,730
6,051,000 5.28%, 11/29/99 6,026,151
15,000,000 5.28%, 12/09/99 14,916,400
------------
70,856,735
------------
- ----------------------------------------------------------------------------
HEAVY EQUIPMENT / FINANCE (0.8%)
Caterpillar Financial Services, Inc.
10,700,000 5.33%, 11/22/99 10,666,732
------------
- ----------------------------------------------------------------------------
INSURANCE (5.4%)
MetLife Funding, Inc.
10,000,000 5.30%, 11/02/99 9,998,528
15,000,000 5.30%, 11/05/99 14,991,167
15,000,000 5.30-5.31%, 11/09/99 14,982,333
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (CONTINUED)
- ----------------------------------------------------------------------------
INSURANCE (CONTINUED)
$ 2,749,000 5.29%, 11/19/99 $ 2,741,729
10,000,000 5.96%, 01/26/00 9,857,622
Old Republic Capital Corp
(Private Placement*)
11,085,000 5.34-5.35%, 12/07/99 11,025,695
10,000,000 6.00%, 02/08/00 9,835,000
------------
73,432,074
------------
- ----------------------------------------------------------------------------
LEASE / RENTAL (0.7%)
Hertz Corp.
10,000,000 5.32%, 12/02/99 9,954,189
------------
- ----------------------------------------------------------------------------
MANUFACTURING / MISCELLANEOUS (3.5%)
Allied Signal, Inc. (Private Placement*)
17,000,000 5.95-5.98%, 01/20/00 16,775,222
21,030,000 5.95%, 01/28/00 20,724,130
10,000,000 5.71%, 02/09/00 9,841,389
------------
47,340,741
------------
- ----------------------------------------------------------------------------
PACKAGING/CONTAINERS (2.3%)
Bemis Co., Inc.
10,000,000 6.00%, 01/12/00 9,880,000
10,000,000 6.00%, 01/13/00 9,878,333
1,340,000 6.00%, 01/18/00 1,322,581
10,000,000 5.93%, 01/19/00 9,869,869
------------
30,950,783
------------
- ----------------------------------------------------------------------------
PHARMACUETICALS / PERSONAL CARE (1.9%)
Becton Dickinson & Co.
10,000,000 5.31%, 12/03/99 9,952,800
14,600,000 5.31%, 12/08/99 14,520,320
1,200,000 6.00%, 01/31/00 1,181,800
------------
25,654,920
------------
- ----------------------------------------------------------------------------
PRINTING & PUBLISHING (4.0%)
E.W. Scripps Co. (Private Placement*)
10,000,000 5.20%, 11/01/99 10,000,000
10,576,000 5.30-5.31%, 11/10/99 10,561,962
5,000,000 5.30%, 11/17/99 4,988,222
10,000,000 5.31%, 12/10/99 9,942,475
6,000,000 5.75%, 01/18/00 5,925,250
3,865,000 5.74-5.91%, 01/24/00 3,811,792
McGraw-Hill, Inc.
9,865,000 5.30%, 11/10/99 9,851,929
-------------
55,081,630
-------------
TOTAL COMMERCIAL PAPER (COST $1,278,259,898) 1,278,259,898
-------------
CORPORATE NOTES (0.4%)
- ----------------------------------------------------------------------------
5,000,000 J.P. Morgan & Co. 5.18% Variable,
07/20/00 (cost $5,000,000) 5,000,000
-------------
NATIONWIDE 27
<PAGE> 30
STATEMENT OF INVESTMENTS NATIONWIDE(R) MONEY MARKET FUND (CONTINUED)
- -----------------------------------------------------------------------
October 31, 1999
U.S. GOVERNMENT SPONSORED AND
AGENCY OBLIGATIONS (5.4%)
- -----------------------------------------------------------------------
GOVERNMENT - AGENCY (0.4%)
FHLB
$ 5,000,000 5.23%, 03/17/00 (cost $5,000,000) $ 5,000,000
--------------
- -----------------------------------------------------------------------
GOVERNMENT - SPONSORED MORTGAGE-BACKED OBLIGATIONS (5.0%)
FHLMC
10,000,000 5.00%, 01/03/00 9,915,206
10,000,000 5.19%, 01/27/00 9,874,575
FNMA
17,087,000 5.25-5.26%, 12/07/99 16,997,143
5,000,000 4.71%, 12/17/99 4,969,909
27,345,000 5.56%, 01/21/00 27,002,914
--------------
TOTAL GOVERNMENT SPONSORED MORTGAGE-BACKED
OBLIGATIONS (cost $68,759,747) 68,759,747
--------------
TOTAL U.S. GOVERNMENT SPONSORED AND AGENCY OBLIGATIONS
(cost $73,759,747) 73,759,747
--------------
TOTAL INVESTMENTS (cost $1,366,898,575) $1,366,898,575
==============
- -----------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLB Federal Home Loan Bank System
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Assoc.
** VARIABLE RATE SECURITY. THE RATE REFLECTED IS THE RATE IN EFFECT ON 10/31/99.
COST ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
*RESTRICTED SECURITIES ISSUED PURSUANT TO SECTION 4(2) OF THE SECURITIES ACT OF
1933. THESE SECURITIES WERE DEEMED LIQUID PURSUANT TO PROCEDURES APPROVED BY THE
BOARD OF TRUSTEES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 NATIONWIDE
<PAGE> 31
STATEMENT OF ASSETS AND LIABILITIES - THE STOCK FUNDS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE
MID CAP NATIONWIDE NATIONWIDE
GROWTH FUND GROWTH FUND FUND
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (cost $9,230,740,
$680,598,792, $1,553,912,992) $12,040,703 $1,026,829,180 $2,543,605,004
Cash 713 504 1,333
Receivable for Fund shares sold 10,667 37,484 575,998
Receivable from adviser 8,090 - -
Receivable for investment securities sold 684,843 7,519,631 8,753,304
Accrued interest and dividends receivable 2,915 156,312 2,592,492
Other receivables 585 - -
Prepaid asset - - -
----------- -------------- --------------
Total assets 12,748,516 1,034,543,111 2,555,528,131
----------- -------------- --------------
LIABILITIES
Payable for Fund shares redeemed - 359,186 2,813,106
Payable for investment securities purchased 694,771 4,805,067 8,197,316
Accrued management fees 5,751 483,991 1,155,349
Accrued fund administration fees 671 45,855 95,509
Accrued administrative servicing fees, Class A Shares - - 50
Accrued administrative servicing fees, Class D Shares - 39,167 110,458
Accrued transfer agent fees 2,904 82,900 129,476
Accrued distribution fees, Class A Shares 232 1,494 10,713
Accrued distribution fees, Class B Shares 699 4,818 35,812
Dividends payable 23 23,013 13,747
Other accrued expenses 16,311 146,795 256,274
----------- -------------- --------------
Total liabilities 721,362 5,992,286 12,817,810
----------- -------------- --------------
NET ASSETS $12,027,154 $1,028,550,825 $2,542,710,321
=========== ============== ==============
NET ASSETS REPRESENTED BY:
Capital $ 8,363,701 $ 547,311,915 $1,395,845,134
Net unrealized appreciation 2,809,963 346,230,388 989,692,012
Accumulated undistributed net realized gain 853,513 134,964,851 155,726,730
Accumulated undistributed (distributions
in excess of) net investment income (23) 43,671 1,446,445
----------- -------------- --------------
NET ASSETS $12,027,154 $1,028,550,825 $2,542,710,321
=========== ============== ==============
NET ASSETS:
Class A Shares $ 1,243,825 $ 7,654,458 $ 54,223,148
Class B Shares 918,221 6,209,749 44,993,981
Class D Shares 9,865,108 1,014,686,618 2,443,493,192
----------- -------------- --------------
Total $12,027,154 $1,028,550,825 $2,542,710,321
=========== ============== ==============
SHARES OUTSTANDING (unlimited number of
shares authorized):
Class A Shares 63,133 417,113 1,657,614
Class B Shares 47,239 341,137 1,386,458
Class D Shares 500,946 55,261,018 74,958,853
----------- -------------- --------------
Total 611,318 56,019,268 78,002,925
=========== ============== ==============
Net asset value per share:
Class A Shares $ 19.70 $ 18.35 $ 32.71
Class B Shares $ 19.44 $ 18.20 $ 32.45
Class D Shares $ 19.69 $ 18.36 $ 32.60
OFFERING PRICE (100%/(100%-Maximum Sales Charge) of net
asset value adjusted to nearest cent) per share:*
Class A Shares $ 20.90 $ 19.47 $ 34.71
Class B Shares** $ 19.44 $ 18.20 $ 32.45
Class D Shares $ 20.62 $ 19.23 $ 34.14
----------- -------------- --------------
Maximum sales charge - Class A Shares 5.75% 5.75% 5.75%
=========== ============== ==============
Maximum sales charge - Class D Shares 4.50% 4.50% 4.50%
=========== ============== ==============
</TABLE>
* CLASS A AND D SHARES INCLUDE A FRONT-END SALES CHARGE.
** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD AND ARE NOT SUBJECT TO A FRONT-END SALES CHARGE.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NATIONWIDE 29
<PAGE> 32
STATEMENT OF ASSETS AND LIABILITIES - THE BOND FUNDS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE NATIONWIDE
NATIONWIDE LONG-TERM INTERMEDIATE
NATIONWIDE TAX-FREE U.S. GOVERNMENT U.S. GOVERNMENT
BOND FUND INCOME FUND BOND FUND BOND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at value (cost $132,789,861,
$232,961,669, $34,042,202, $95,177,164) $ 129,124,626 $ 230,977,542 $ 33,516,886 $ 93,619,502
Repurchase agreements (cost $2,200,000, $7,921,000) - - 2,200,000 7,921,000
Cash 325 - 393 145
Receivable for Fund shares sold 37,737 56,080 3,368 904,248
Receivable from adviser - - 574 3,615
Receivable for investment securities sold 2,914,000 1,361,730 2,235,789 7,181,079
Accrued interest receivable 2,226,244 4,205,874 400,738 1,521,396
Other receivables - 1,106 - -
------------- ------------- ------------- -------------
Total assets 134,302,932 236,602,332 38,357,748 111,150,985
LIABILITIES
Bank loan - 167,717 - -
Payable for Fund shares redeemed 28,949 79,307 9,087 82,656
Payable for investment securities purchased 3,777,920 3,476,100 2,200,000 7,921,000
Accrued management fees 54,899 99,639 15,248 43,001
Accrued fund administration fees 7,686 13,949 2,135 6,020
Accrued administrative servicing fees, Class A Shares - - - 5,901
Accrued administrative servicing fees, Class D Shares 3,858 - - 2,065
Accrued transfer agent fees 17,428 15,545 3,069 4,471
Accrued distribution fees, Class A Shares 659 486 409 10,211
Accrued distribution fees, Class B Shares 1,189 2,697 1,299 802
Dividends payable 82,728 304,860 67,933 42,977
Other accrued expenses 28,440 42,821 25,423 22,096
------------- ------------- ------------- -------------
Total liabilities 4,003,756 4,203,121 2,324,603 8,141,200
------------- ------------- ------------- -------------
NET ASSETS $ 130,299,176 $ 232,399,211 $ 36,033,145 $ 103,009,785
============= ============= ============= =============
NET ASSETS REPRESENTED BY:
Capital $ 141,361,793 $ 235,537,449 $ 36,025,114 $ 104,330,533
Net unrealized (depreciation) (3,665,235) (1,984,127) (525,316) (1,557,662)
Accumulated undistributed (distributions
in excess of) net realized gain (loss) (7,473,752) (1,131,007) 530,771 233,150
Accumulated undistributed (distributions
in excess of) net investment income 76,370 (144,260) 2,576 3,764
------------- ------------- ------------- -------------
NET ASSETS $ 130,299,176 $ 232,399,211 $ 36,033,145 $ 103,009,785
============= ============= ============= =============
NET ASSETS:
Class A Shares $ 3,185,999 $ 2,383,363 $ 2,040,557 $ 49,601,442
Class B Shares 1,662,379 3,745,975 1,876,029 1,148,218
Class D Shares 125,450,798 226,269,873 32,116,559 52,260,125
------------- ------------- ------------- -------------
Total $ 130,299,176 $ 232,399,211 $ 36,033,145 $ 103,009,785
============= ============= ============= =============
SHARES OUTSTANDING (unlimited number of shares authorized):
Class A Shares 351,115 243,392 187,597 5,017,234
Class B Shares 183,082 382,912 172,497 116,126
Class D Shares 13,803,871 23,124,925 2,952,271 5,283,893
------------- ------------- ------------- -------------
Total 14,338,068 23,751,229 3,312,365 10,417,253
============= ============= ============= =============
NET ASSET VALUE PER SHARE:
Class A Shares $ 9.07 $ 9.79 $ 10.88 $ 9.89
Class B Shares $ 9.08 $ 9.78 $ 10.88 $ 9.89
Class D Shares $ 9.09 $ 9.78 $ 10.88 $ 9.89
OFFERING PRICE (100%/(100%-Maximum Sales Charge) of net
asset value adjusted to nearest cent) per share:*
Class A Shares $ 9.50 $ 10.25 $ 11.39 $ 10.36
Class B Shares** $ 9.08 $ 9.78 $ 10.88 $ 9.89
Class D Shares $ 9.52 $ 10.24 $ 11.39 $ 10.36
------------- ------------- ------------- -------------
Maximum sales charge - Class A and D Shares 4.50% 4.50% 4.50% 4.50%
============= ============= ============= =============
</TABLE>
* CLASS A AND D SHARES INCLUDE A FRONT-END SALES CHARGE.
** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 N A T I O N W I D E
<PAGE> 33
STATEMENT OF ASSETS AND LIABILITIES - THE MONEY MARKET FUND
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE
MONEY MARKET
FUND(a)
--------------
<S> <C>
ASSETS
Investments in securities, at value (cost $1,366,898,575) $1,366,898,575
Cash 45,284
Receivable for Fund shares sold 3,523,369
Receivable for investment securities sold 51,292,000
Accrued interest and dividends receivable 258,393
--------------
Total assets 1,422,017,621
--------------
LIABILITIES
Payable for Fund shares redeemed 1,135,127
Payable for investment securities purchased 52,177,168
Accrued management fees 451,998
Accrued fund administration fees 58,530
Accrued transfer agent fees, Class R Shares 158
Accrued transfer agent fees, Prime Shares 95,346
Accrued distribution fees, Class R Shares 5,734
Accrued administrative servicing fees, Class R Shares 3,740 Accrued
administrative servicing fees, Prime Shares 109,770
Dividends payable 199,085
Other accrued expenses 144,365
--------------
Total liabilities 54,381,021
--------------
NET ASSETS $1,367,636,600
==============
NET ASSETS REPRESENTED BY:
Capital $1,367,414,555
Accumulated undistributed net realized gain -
Accumulated undistributed net investment income 222,045
--------------
NET ASSETS $1,367,636,600
==============
NET ASSETS:
Class R Shares $ 22,294,610
Prime Shares 1,345,341,990
--------------
Total $1,367,636,600
==============
SHARES OUTSTANDING (UNLIMITED NUMBER OF SHARES AUTHORIZED):
Class R Shares 22,294,610
Prime Shares 1,345,361,656
--------------
Total 1,367,656,266
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE:*
Class R Shares $ 1.00
Prime Shares $ 1.00
</TABLE>
* CLASS R AND PRIME SHARES ARE NOT SUBJECT TO A FRONT-END SALES CHARGE.
(a) ON JANUARY 1, 1999, THE EXISTING SHARES OF THE NATIONWIDE MONEY MARKET FUND
WERE RENAMED PRIME SHARES. THE CLASS R SHARES WERE FIRST OFFERED TO THE
PUBLIC JANUARY 4, 1999.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 N A T I O N W I D E
<PAGE> 34
STATEMENT OF OPERATIONS - THE STOCK FUNDS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE
MID CAP NATIONWIDE NATIONWIDE
GROWTH FUND GROWTH FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME:
Dividends $ 82,485 $ 8,657,204 $ 34,773,859
Interest 19,368 1,366,688 2,747,357
Miscellaneous income - - 1,495
------------ ------------ ------------
Total income 101,853 10,023,892 37,522,711
------------ ------------ ------------
EXPENSES:
Investment management fees 66,283 5,873,926 13,888,390
Distribution fees, Class A Shares 1,752 12,820 99,058
Distribution fees, Class B Shares 5,800 38,033 306,106
Fund administration fees 7,733 553,398 1,146,258
Administrative servicing fees, Class A Shares - - 205
Administrative servicing fees, Class D Shares - 166,381 473,191
Transfer agent fees 24,498 807,251 1,349,999
Shareholders' reports 16,000 517,040 935,000
Registration fees 48,000 40,960 61,000
Professional services 100 28,572 78,000
Custodian fees 4,028 25,056 72,000
Trustees' fees and expenses 151 16,623 35,001
Other 2,932 45,821 102,304
------------ ------------ ------------
Total expenses before waived or reimbursed expenses 177,277 8,125,881 18,546,512
Total waived or reimbursed expenses (59,278) - -
------------ ------------ ------------
Net expenses 117,999 8,125,881 18,546,512
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) $ (16,146) $ 1,898,011 $ 18,976,199
============ ============ ============
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 868,439 $135,282,133 $155,729,091
Net change in unrealized appreciation 429,235 16,713,526 57,076,428
------------ ------------ ------------
Net realized and unrealized gains on investments 1,297,674 151,995,659 212,805,519
------------ ------------ ------------
NET INCREASE IN ASSETS RESULTING FROM OPERATIONS $ 1,281,528 $153,893,670 $231,781,718
============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 N A T I O N W I D E
<PAGE> 35
STATEMENT OF OPERATIONS - THE BOND FUNDS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE NATIONWIDE
NATIONWIDE LONG-TERM INTERMEDIATE
NATIONWIDE TAX-FREE U.S. GOVERNMENT U.S. GOVERNMENT
BOND FUND INCOME FUND BOND FUND BOND FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest $ 9,038,713 $ 14,144,253 $ 2,468,931 $ 3,823,928
------------ ------------ ------------ ------------
Expenses:
Investment management fees 674,918 1,263,813 198,048 314,314
Distribution fees, Class A Shares 6,645 3,866 3,024 22,682
Distribution fees, Class B Shares 11,218 24,020 10,541 6,469
Fund administration fees 94,488 175,965 27,727 44,004
Administrative servicing fees, Class A Shares - - - 13,272
Administrative servicing fees, Class D Shares 16,131 - - 8,757
Transfer agent fees 145,000 136,073 36,674 38,402
Shareholders' reports 106,000 106,000 31,920 29,819
Registration fees 51,000 46,000 48,000 52,451
Professional services 2,700 3,699 120 1,434
Custodian fees 18,000 22,517 5,175 8,821
Trustees' fees and expenses 2,149 4,001 524 1,048
Other 12,501 35,136 5,475 5,514
------------ ------------ ------------ ------------
Total expenses before waived or reimbursed expenses 1,140,750 1,821,090 367,228 546,987
Total waived or reimbursed expenses - - (40,770) (25,751)
------------ ------------ ------------ ------------
Net expenses 1,140,750 1,821,090 326,458 521,236
------------ ------------ ------------ ------------
Net investment income $ 7,897,963 $ 12,323,163 $ 2,142,473 $ 3,302,692
============ ============ ============ ============
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments $ (670,481) $ (784,649) $ 753,447 $ 233,150
Net change in unrealized depreciation (8,990,234) (19,172,551) (3,960,048) (3,615,067)
------------ ------------ ------------ ------------
Net realized and unrealized gain (loss) on investments (9,660,715) (19,957,200) (3,206,601) (3,381,917)
------------ ------------ ------------ ------------
NET (DECREASE) IN ASSETS RESULTING FROM OPERATIONS $ (1,762,752) $ (7,634,037) $ (1,064,128) $ (79,225)
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 N A T I O N W I D E
<PAGE> 36
STATEMENT OF OPERATIONS - THE MONEY MARKET FUND
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE
MONEY MARKET
FUND(a)
------------
<S> <C>
INVESTMENT INCOME
INCOME:
Interest $ 60,937,953
------------
EXPENSES:
Investment management fees 4,709,925
Distribution fees, Class R Shares 5,734
Fund administration fees 624,729
Administrative servicing fees, Class R Shares
9,715
Administrative servicing fees, Prime Shares 421,746
Transfer agent fees, Class R Shares 382
Transfer agent fees, Prime Shares 751,526
Shareholders' reports 497,915
Registration fees 77,956
Professional services 48,054
Custodian fees 65,000
Trustees' fees and expenses 14,397
Other 45,989
------------
Total expenses before waived or reimbursed expenses
7,273,068
Total waived or reimbursed expenses (5,734)
------------
Net expenses 7,267,334
------------
NET INVESTMENT INCOME $ 53,670,619
============
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments $ -
Net change in unrealized appreciation (depreciation) -
------------
Net realized and unrealized gain (loss) on investments -
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 53,670,619
============
</TABLE>
(a) ON JANUARY 1, 1999, THE EXISTING SHARES OF THE NATIONWIDE MONEY MARKET FUND
WERE RENAMED PRIME SHARES. THE CLASS R SHARES WERE FIRST OFFERED TO THE
PUBLIC ON JANUARY 4, 1999.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 N A T I O N W I D E
<PAGE> 37
STATEMENT OF CHANGES IN NET ASSETS - THE STOCK FUNDS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE NATIONWIDE
MID CAP GROWTH FUND GROWTH FUND
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $ (16,146) $ (30,335) $ 1,898,011 $ 1,704,988
Net realized gain on investments 868,439 1,160,626 135,282,133 50,781,085
Net change in unrealized appreciation
(depreciation) of investments 429,235 (673,832) 16,713,526 75,659,903
----------- ----------- -------------- -------------
Net increase in net assets resulting from operations 1,281,528 456,459 153,893,670 128,145,976
----------- ----------- -------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income - - (3,786) -
Net realized gain from investment transactions (5,140) - (56,830) -
----------- ----------- -------------- -------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income - - 23 -
Net realized gain from investment transactions (4,303) - (35,601) -
----------- ----------- -------------- -------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM: (A)
Net investment income (83) - (1,832,458) (1,711,836)
In excess of net investment income - - - (412,306)
Net realized gain from investment transactions (119,176) (2,807,319) (17,467,990) (134,550,850)
----------- ----------- -------------- -------------
DECREASE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTION (128,702) (2,807,319) (19,396,642) (136,674,992)
----------- ----------- -------------- -------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares 3,491,475 1,360,213 123,060,029 141,145,310
Net asset value of shares issued to shareholders
from reinvestment of dividends 127,639 2,767,469 19,106,166 134,704,429
Cost of shares redeemed (2,323,070) (1,739,245) (166,677,669) (166,879,567)
----------- ----------- -------------- -------------
Increase (decrease) in net assets derived from
capital share transactions 1,296,044 2,388,437 (24,511,474) 108,970,172
----------- ----------- -------------- -------------
NET INCREASE IN NET ASSETS 2,448,870 37,577 109,985,554 100,441,156
NET ASSETS--BEGINNING OF PERIOD 9,578,284 9,540,707 918,565,271 818,124,115
----------- ----------- -------------- -------------
NET ASSETS--END OF PERIOD $12,027,154 $ 9,578,284 $1,028,550,825 $ 918,565,271
=========== =========== ============== =============
Undistributed net realized gain on investments
included in net assets at end of period $ 853,513 $ 128,568 $ 134,964,851 $ 17,662,293
=========== =========== ============== =============
Undistributed (distributions in excess of) net investment
income included in net assets at end of period $ (23) $ - $ 43,671 $ (294,884)
=========== =========== ============== =============
SHARE ACTIVITY:*
Shares sold 179,530 71,220 7,044,994 8,740,819
Reinvestment of dividends 7,248 144,592 1,196,914 8,931,831
Shares redeemed (119,492) (88,913) (9,552,040) (10,469,110)
----------- ----------- -------------- -------------
Net increase (decrease) in number of shares 67,286 126,899 (1,310,132) 7,203,540
=========== =========== ============== =============
<CAPTION>
NATIONWIDE
FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ 18,976,199 $ 18,582,088
Net realized gain on investments 155,729,091 111,188,022
Net change in unrealized appreciation
(depreciation) of investments 57,076,428 261,994,601
-------------- ---------------
Net increase in net assets resulting from operations 231,781,718 391,764,711
-------------- ---------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (131,039) (35,853)
Net realized gain from investment transactions (384,917) -
-------------- ---------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income 635 (7,101)
Net realized gain from investment transactions (264,789) -
-------------- ---------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM: (A)
Net investment income (18,122,796) (18,866,799)
In excess of net investment income - -
Net realized gain from investment transactions (35,567,422) (151,115,164)
-------------- ---------------
DECREASE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTION (54,470,328) (170,024,917)
-------------- ---------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares 423,168,894 666,962,584
Net asset value of shares issued to shareholders
from reinvestment of dividends 52,127,337 161,657,080
Cost of shares redeemed (315,237,235) (293,441,427)
-------------- ---------------
Increase (decrease) in net assets derived from
capital share transactions 160,058,996 535,178,237
-------------- ---------------
NET INCREASE IN NET ASSETS 337,370,386 756,918,031
NET ASSETS--BEGINNING OF PERIOD 2,205,339,935 1,448,421,904
-------------- ---------------
NET ASSETS--END OF PERIOD $2,542,710,321 $ 2,205,339,935
Undistributed net realized gain on investments
included in net assets at end of period $ 155,726,730 $ 36,081,993
============== ===============
Undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 1,446,445 $ 856,220
============== ===============
SHARE ACTIVITY:*
Shares sold 13,206,280 22,743,520
Reinvestment of dividends 1,677,000 5,738,483
Shares redeemed (9,761,097) (10,115,134)
-------------- ---------------
Net increase (decrease) in number of shares 5,122,183 18,366,869
============== ===============
</TABLE>
* BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT
CLASSES A, B, AND D SHARES.
(a) YEAR ENDED OCTOBER 31, 1998 DISTRIBUTIONS FOR CLASS D SHARES REPRESENT
COMBINED DATA FROM THE FUND PRIOR TO AND AFTER THE REORGANIZATION AS
DISCLOSED IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
N A T I O N W I D E 3 5
<PAGE> 38
STATEMENT OF CHANGES IN NET ASSETS - THE BOND FUNDS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE NATIONWIDE
BOND FUND TAX-FREE INCOME FUND
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 7,897,963 $ 7,683,402 $ 12,323,163 $ 12,394,623
Net realized gain (loss) on investments (670,481) 2,719,870 (784,649) 4,159,256
Net change in unrealized appreciation
(depreciation) of investments (8,990,234) 822,095 (19,172,551) 1,599,094
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations (1,762,752) 11,225,367 (7,634,037) 18,152,973
------------- ------------- ------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (150,672) (16,370) (71,793) (6,390
Net realized gain from investment transactions - - (3,091) -
------------- ------------- ------------- -------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (66,930) (3,631) (117,051) (11,930
Net realized gain from investment transactions - - (7,763) -
------------- ------------- ------------- -------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM: (A)
Net investment income (7,680,036) (7,657,828) (12,285,133) (12,376,537
Net realized gain from investment transactions - - (1,046,001) (1,813,545
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM SHAREHOLDER
distributions (7,897,638) (7,677,829) (13,530,832) (14,208,402
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares 31,686,369 33,695,932 17,639,757 16,799,406
Net proceeds from Reorganization - - - 16,007,718
Net asset value of shares issued to shareholders
from reinvestment of dividends 6,810,486 6,457,902 9,665,414 10,158,526
Cost of shares redeemed (35,213,957) (31,429,116) (39,481,013) (37,656,601
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS 3,282,898 8,724,718 (12,175,842) 5,309,049
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (6,377,492) 12,272,256 (33,340,711) 9,253,620
NET ASSETS--BEGINNING OF PERIOD 136,676,668 124,404,412 265,739,922 256,486,302
------------- ------------- ------------- -------------
NET ASSETS--END OF PERIOD $ 130,299,176 $ 136,676,668 $ 232,399,211 $ 265,739,922
============= ============= ============= =============
Undistributed net realized gain (loss) on investments
included in net assets at end of period $ (7,473,752) $ (6,803,271) $ (1,131,007) $ 716,165
============= ============= ============= =============
Undistributed (distribution in excess of) net investment
income included in net assets at end of period $ 76,370 $ 76,045 $ (144,260) $ 886
============= ============= ============= =============
SHARE ACTIVITY:*
Shares sold 3,326,367 3,489,490 1,692,989 1,582,608
Shares from Reorganization - - - 1,527,760
Reinvestment of dividends 725,838 670,864 932,454 958,777
Shares redeemed (3,719,488) (3,264,319) (3,805,696) (3,549,937
------------- ------------- ------------- -------------
Net increase (decrease) in number of shares 332,717 896,035 (1,180,253) 519,208
============= ============= ============= =============
<CAPTION>
NATIONWIDE LONG-TERM
U.S. GOVERNMENT BOND FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C>
Net investment income $ 2,142,473 $ 2,433,011
Net realized gain (loss) on investments 753,447 988,155
Net change in unrealized appreciation
(depreciation) of investments (3,960,048) 1,145,175
------------- -------------
Net increase (decrease) in net assets resulting
from operations (1,064,128) 4,566,341
------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (63,942) (2,306)
Net realized gain from investment transactions - -
------------- -------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (57,853) (2,607)
Net realized gain from investment transactions - -
------------- -------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM: (A)
Net investment income (2,019,540) (2,427,797)
Net realized gain from investment transactions - -
------------- -------------
DECREASE IN NET ASSETS FROM SHAREHOLDER
distributions (2,141,335) (2,432,710)
------------- -------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares 7,042,834 1,585,748
Net proceeds from Reorganization - -
Net asset value of shares issued to shareholders
from reinvestment of dividends 1,222,509 1,258,888
Cost of shares redeemed (10,525,237) (12,028,646)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS (2,259,894) (9,184,010)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (5,465,357) (7,050,379)
NET ASSETS--BEGINNING OF PERIOD 41,498,502 48,548,881
------------- -------------
NET ASSETS--END OF PERIOD $ 36,033,145 $ 41,498,502
============= =============
Undistributed net realized gain (loss) on investments
included in net assets at end of period $ 530,771 $ (222,676)
============= =============
Undistributed (distribution in excess of) net investment
income included in net assets at end of period $ 2,576 $ 1,438
============= =============
SHARE ACTIVITY:*
Shares sold 620,380 136,143
Shares from Reorganization - -
Reinvestment of dividends 108,997 110,525
Shares redeemed (942,952) (1,059,585)
------------- -------------
Net increase (decrease) in number of shares (213,575) (812,917)
============= =============
</TABLE>
*BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT
CLASSES A, B, AND D SHARES.
(a) YEAR ENDED OCTOBER 31, 1998 DISTRIBUTIONS FOR CLASS D SHARES REPRESENT
COMBINED DATA FROM THE FUND PRIOR TO AND AFTER THE REORGANIZATION AS
DISCLOSED IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3 6 N A T I O N W I D E
<PAGE> 39
<TABLE>
<CAPTION>
NATIONWIDE INTERMEDIATE
U.S. GOVERNMENT BOND FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C>
Net investment income $ 3,302,692 $ 2,516,877
Net realized gain on investments 233,150 1,085,732
Net change in unrealized appreciation
(depreciation) of investments (3,615,067) 389,936
------------- -------------
Net increase (decrease) in net assets resulting
from operations (79,225) 3,992,545
------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (480,069) (4,837)
Net realized gain from investment transactions (1,762) -
------------- -------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (33,885) (2,079)
Net realized gain from investment transactions (2,063) -
------------- -------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM: (A)
Net investment income (2,788,883) (2,509,961)
Net realized gain from investment transactions (253,467) (341,559)
------------- -------------
DECREASE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (3,560,129) (2,858,436)
------------- -------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares 85,637,352 30,536,170
Net asset value of shares issued to shareholders
from reinvestment of dividends 3,000,445 2,280,605
Cost of shares redeemed (33,466,295) (23,801,033)
------------- -------------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS 55,171,502 9,015,742
------------- -------------
NET INCREASE IN NET ASSETS 51,532,148 10,149,851
NET ASSETS--BEGINNING OF PERIOD 51,477,637 41,327,786
------------- -------------
NET ASSETS--END OF PERIOD $ 103,009,785 $ 51,477,637
============= =============
Undistributed net realized gain on investments
included in net assets at end of period $ 233,150 $ 261,200
============= =============
Undistributed net investment income included in net
assets at end of period $ (3,764) $ -
============= =============
Share Activity:*
Shares sold 8,532,370 2,924,042
Reinvestment of dividends 296,211 219,528
Shares redeemed (3,282,411) (2,280,392)
------------- -------------
Net increase in number of shares 5,546,170 863,178
============= =============
</TABLE>
* BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT
CLASSES A, B, AND D SHARES
(a) YEAR ENDED OCTOBER 31, 1998 DISTRIBUTIONS FOR CLASS D SHARES REPRESENT
COMBINED DATA FROM THE FUND PRIOR TO AND AFTER THE REORGANIZATION.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
N A T I O N W I D E 3 7
<PAGE> 40
STATEMENT OF CHANGES IN NET ASSETS - THE MONEY MARKET FUND
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
NATIONWIDE
MONEY MARKET FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income $ 53,670,619 $ 45,794,909
Net realized gain on investments - 724
--------------- ---------------
Net increase in net assets resulting
from operations 53,670,619 45,795,633
--------------- ---------------
DISTRIBUTIONS TO CLASS R SHAREHOLDERS FROM: (a)
Net investment income (182,912) -
--------------- ---------------
DISTRIBUTIONS TO PRIME SHAREHOLDERS FROM: (b)
Net investment income (53,487,804) (45,795,350)
--------------- ---------------
DECREASE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (53,670,716) (45,795,350)
Capital Share Transactions:*
Net proceeds from sale of shares 1,458,075,654 1,471,783,844
Net proceeds from Reorganization - 4,130,470
Net asset value of shares issued to shareholders
from reinvestment of dividends 51,439,932 43,764,561
Cost of shares redeemed (1,190,567,730) (1,291,647,722)
--------------- ---------------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS 318,947,856 228,031,153
--------------- ---------------
NET INCREASE IN NET ASSETS 318,947,759 228,031,436
NET ASSETS--BEGINNING OF PERIOD 1,048,688,841 820,657,405
--------------- ---------------
NET ASSETS--END OF PERIOD $ 1,367,636,600 $ 1,048,688,841
--------------- ---------------
Undistributed net realized gain on investments
included in net assets at end of period $ - $ 1,822
=============== ===============
Undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 222,045 $ (94)
=============== ===============
SHARE ACTIVITY:*
Shares sold 1,458,096,838 1,471,783,848
Shares from Reorganization - 4,129,302
Reinvestment of dividends 51,439,932 43,764,561
Shares redeemed (1,190,567,730) (1,291,647,722)
=============== ===============
Net increase in number of shares 318,969,040 228,029,989
=============== ===============
</TABLE>
* BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT
CLASSES R AND PRIME SHARES.
(a) THE NATIONWIDE MONEY MARKET CLASS R SHARES WERE FIRST OFFERED ON JANUARY 4,
1999.
(b) ON JANUARY 4, 1999, THE EXISTING SHARES OF THE NATIONWIDE MONEY MARKET FUND
WERE RENAMED PRIME SHARES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3 8 N A T I O N W I D E
<PAGE> 41
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED PERIOD FROM YEAR ENDED PERIOD FROM
OCTOBER 31, MAY 11, 1998 TO OCTOBER 31, MAY 11, 1998 TO
1999 OCTOBER 31, 1998 1999 OCTOBER 31, 1998
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 17.67 $ 19.67 $ 17.54 $ 19.67
Net investment income (loss) (0.03) (0.03) (0.12) (0.07)
Net realized gain (loss) and unrealized
appreciation (depreciation) 2.30 (1.97) 2.26 (2.06)
-------- -------- ------- -------
Total from investment operations 2.27 (2.00) 2.14 (2.13)
-------- -------- ------- -------
Distributions from net realized gain from
investment transactions (0.24) - (0.24) -
-------- -------- ------- -------
Net increase (decrease) in net asset value 2.03 (2.00) 1.90 (2.13)
-------- -------- ------- -------
NET ASSET VALUE--END OF PERIOD $ 19.70 $ 17.67 $ 19.44 $ 17.54
======== ======== ======= =======
Total Return (excluding sales charges) 12.98% (10.17%) 12.33% (10.83%)
Net Assets, End of Period (000) $ 1,244 $ 305 $ 918 $ 251
Ratio of expenses to average net assets 1.25% 1.23%(a) 2.00% 2.00%(a)
Ratio of expenses to average net assets* 1.83% 2.21%(a) 2.59% 2.98%(a)
Ratio of net investment income to average
net assets (0.24%) (0.70%)(a) (1.01%) (1.47%)(a)
Ratio of net investment income to average
net assets* (0.82%) (1.68%)(a) (1.60%) (2.45%)(a)
Portfolio turnover (b) 36.58% 46.33% 36.58% 46.33%
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
1999 1998(c) 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 17.61 $ 22.87 $ 19.47 $ 18.17 $ 15.11
Net investment income (loss) - (0.02) (0.06) 0.04
Net realized gain (loss) and unrealized
appreciation (depreciation) 2.34 1.29 4.38 3.28 3.23
-------- -------- -------- ------- -------
Total from investment operations 2.32 1.23 4.42 3.29 3.22
-------- -------- -------- ------- -------
Dividends from net investment income - - - (0.03) -
Dividends in excess of net investment income - - - - (0.01)
Distributions from net realized gain from
investment transactions (0.24) (6.49) (0.99) (1.99) (0.15)
-------- -------- -------- ------- -------
Total distributions (0.24) (6.49) (1.02) (1.99) (0.16)
-------- -------- -------- ------- -------
Net increase (decrease) in net asset value 2.08 (5.26) 3.40 1.30 3.06
NET ASSET VALUE--END OF PERIOD $ 19.69 $ 17.61 $ 22.87 $ 19.47 $ 18.17
======== ======== ======== ======= =======
Total Return (excluding sales charges) 13.31% 5.11% 23.66% 19.41% 21.57%
Net Assets, End of Period (000) $ 9,865 $ 9,022 $ 9,541 $ 9,095 $ 7,594
Ratio of expenses to average net assets 1.00% 0.93% 0.96% 1.44% 1.47%
Ratio of expenses to average net assets* 1.53% 1.57% 1.70% 1.69% 1.72%
Ratio of net investment income to average
net assets (0.09%) (0.30%) 0.20% 0.03% (0.05%)
Ratio of net investment income to average
net assets* (0.62%) (0.94%) (0.54%) (0.22%) (0.30%)
Portfolio turnover(b) 36.58% 46.33% 40.69% 17.19% 29.19%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED OR REIMBURSED.
(a) ANNUALIZED.
(b) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
(c) COMBINED DATA FOR THE FUND PRIOR TO AND AFTER REORGANIZATION AS DISCLOSED
IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
N A T I O N W I D E 3 9
<PAGE> 42
FINANCIAL HIGHLIGHTS - NATIONWIDE GROWTH FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED PERIOD FROM YEAR ENDED PERIOD FROM
OCTOBER 31, MAY 11, 1998 TO OCTOBER 31, MAY 11, 1998 TO
1999 OCTOBER 31, 1998 1999 OCTOBER 31, 1998
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 16.02 $ 16.51 $ 15.98 $ 16.51
Net investment income (loss) 0.01 (0.02) (0.06) (0.04)
Net realized gain (loss) and unrealized
appreciation (depreciation) 2.64 (0.47) 2.59 (0.49)
Total from investment operations 2.65 (0.49) 2.53 (0.53)
Distributions from net investment income (0.01) - - -
Distributions from net realized gain from
investment transactions (0.31) - (0.31) -
Total distributions (0.32) - (0.31) -
Net increase (decrease) in net asset value 2.33 (0.49) 2.22 (0.53)
NET ASSET VALUE--END OF PERIOD $ 18.35 $ 16.02 $ 18.20 $ 15.98
Total Return (excluding sales charges) 16.85% (2.97%) 16.12% (3.21%)
Net Assets, End of Period (000) $ 7,654 $ 2,830 $ 6,210 $ 1,557
Ratio of expenses to average net assets 1.04% 1.11%(a) 1.79% 1.88% (a)
Ratio of net investment income to average (0.02%) (0.38%)(a) (0.76%) (1.16%) (a)
net assets
Portfolio turnover (b) 35.18% 38.61% 35.18% 38.61%
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31 YEARS ENDED OCTOBER 31,
1999 1998(c) 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 16.02 $ 16.32 $ 13.34 $ 13.22 $ 11.35
Net investment income 0.03 0.03 0.12 0.16 0.21
Net realized gain (loss) and unrealized
appreciation (depreciation) 2.65 2.32 3.94 1.36 2.10
Total from investment operations 2.68 2.35 4.06 1.52 2.31
Dividends from net investment income (0.03) (0.03) (0.12) (0.16) (0.20)
Dividends in excess of net investment income - (0.01) - - -
Distributions from net realized gain from
investment transactions (0.31) (2.61) (0.96) (1.24) (0.24)
Total distributions (0.34) (2.65) (1.08) (1.40) (0.44)
Net increase (decrease) in net asset value 2.34 (0.30) 2.98 0.12 1.87
NET ASSET VALUE-END OF PERIOD $ 18.36 $ 16.02 $ 16.32 $ 13.34 $ 13.22
Total Return (excluding sales charges) 17.07% 15.94% 32.12% 12.36% 21.01%
Net Assets, End of Period (000) $ 1,014,687 $ 914,178 $ 818,124 $655,616 $582,927
Ratio of expenses to average net assets 0.80% 0.73% 0.64% 0.64% 0.66%
Ratio of net investment income to average
net assets 0.19% 0.19% 0.81% 1.20% 1.66%
Portfolio turnover(b) 35.18% 38.61% 45.07% 25.61% 27.10%
</TABLE>
(a) ANNUALIZED.
(b) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
(c) COMBINED DATA FOR THE FUND PRIOR TO AND AFTER REORGANIZATION AS DISCLOSED
IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
4 0 N A T I O N W I D E
<PAGE> 43
FINANCIAL HIGHLIGHTS - NATIONWIDE FUND
- --------------------------------------------------------------------------------
Selected Data for Each Share of Capital Outstanding
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED PERIOD FROM YEAR ENDED PERIOD FROM
OCTOBER 31, MAY 11, 1998 TO OCTOBER 31, MAY 11, 1998 TO
1999 OCTOBER 31, 1998 1999 OCTOBER 31, 1998
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 30.30 $ 29.94 $ 30.18 $ 29.94
Net investment income (loss) 0.17 0.06 (0.03) -
Net realized gain (loss) and unrealized
appreciation (depreciation) 2.84 0.38 2.79 0.27
Total from investment operations 3.01 0.44 2.76 0.27
Dividends from net investment income (0.11) (0.08) - (0.03)
Distributions from net realized gain from
investment transactions (0.49) - (0.49) -
Total distributions (0.60) (0.08) (0.49) (0.03)
Net increase in net asset value 2.41 0.35 2.27 0.24
NET ASSET VALUE--END OF PERIOD $ 32.71 $ 30.30 $ 32.45 $ 30.18
Total Return (excluding sales charges) 10.05% 1.48% 9.22% 0.90%
Net Assets, End of Period (000) $ 54,223 $ 19,746 $ 44,994 $ 13,493
Ratio of expenses to average net assets 0.96% 1.00%(a) 1.72% 1.75%(a)
Ratio of net investment income to average 0.53% 0.54%(a) (0.21%) (0.20%)(a)
net assets
Portfolio turnover(b) 13.88% 13.47% 13.88% 13.47%
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
1999 1998(c) 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 30.26 $ 26.57 $ 20.41 $ 17.35 $ 16.12
Net investment income 0.25 0.30 0.31 0.36 0.31
Net realized gain (loss) and unrealized
appreciation (depreciation) 2.82 6.23 7.44 3.98 2.49
Total from investment operations 3.07 6.53 7.75 4.34 2.80
Dividends from net investment income (0.24) (0.30) (0.31) (0.35) (0.31)
Distributions from net realized gain from
investment transactions (0.49) (2.54) (1.28) (0.93) (1.26)
Total distributions (0.73) (2.84) (1.59) (1.28) (1.57)
Net increase (decrease) in net asset value 2.34 3.69 6.16 3.06 1.23
NET ASSET VALUE-END OF PERIOD $ 32.60 $ 30.26 $ 26.57 $ 20.41 $ 35.17
Total Return (excluding sales charges) 10.27% 25.73% 40.17% 26.11% 19.24%
Net Assets, End of Period (000) $ 2,443,493 $ 2,172,101 $1,448,422 $ 958,590 $ 795,666
Ratio of expenses to average net assets 0.73% 0.66% 0.60% 0.61% 0.63%
Ratio of net investment income to average
net assets 0.78% 1.00% 1.32% 1.89% 1.95%
Portfolio turnover(b) 13.88% 13.47% 14.94% 16.71% 16.50%
</TABLE>
(a) ANNUALIZED.
(b) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
(c) COMBINED DATA FOR THE FUND PRIOR TO AND AFTER REORGANIZATION AS DISCLOSED
IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
N A T I O N W I D E 4 1
<PAGE> 44
FINANCIAL HIGHLIGHTS - NATIONWIDE BOND FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED PERIOD FROM YEAR ENDED PERIOD FROM
OCTOBER 31, MAY 11, 1998 TO OCTOBER 31, MAY 11, 1998 TO
1999 OCTOBER 31,1998 1999 OCTOBER 31,1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.75 $ 9.52 $ 9.75 $ 9.52
Net investment income 0.53 0.26 0.47 0.23
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.68) 0.23 (0.67) 0.23
----------- ----------- ----------- -----------
Total from investment operations (0.15) 0.49 (0.20) 0.46
----------- ----------- ----------- -----------
Dividends from net investment income (0.53) (0.26) (0.47) (0.23)
----------- ----------- ----------- -----------
Net increase (decrease) in net asset value (0.68) 0.23 (0.67) 0.23
----------- ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $ 9.07 $ 9.75 $ 9.08 $ 9.75
=========== =========== =========== ===========
Total Return (excluding sales charges) (1.58%) 5.18% (2.07%) 4.85%
Net Assets, End of Period (000) $ 3,186 $ 1,365 $ 1,662 $ 490
Ratio of expenses to average net assets 1.08% 1.17% (a) 1.68% 1.81% (a)
Ratio of net investment income to average
net assets 5.67% 5.48% (a) 5.07% 4.93% (a)
Portfolio turnover (b) 64.26% 70.31% 64.26% 70.31%
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
1999 1998(c) 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.76 $ 9.49 $ 9.34 $ 9.50 $ 8.46
Net investment income 0.55 0.57 0.60 0.61 0.63
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.67) 0.27 0.15 (0.15) 1.04
----------- ----------- ----------- ----------- -----------
Total from investment operations (0.12) 0.84 0.75 0.46 1.67
----------- ----------- ----------- ----------- -----------
Dividends from net investment income (0.55) (0.57) (0.60) (0.62) (0.63)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value (0.67) 0.27 0.15 (0.16) 1.04
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $ 9.09 $ 9.76 $ 9.49 $ 9.34 $ 9.50
=========== =========== =========== =========== ===========
Total Return (excluding sales charges) (1.24%) 9.11% 8.33% 5.05% 20.41%
Net Assets, End of Period (000) $ 125,451 $ 134,822 $ 124,404 $ 133,253 $ 133,633
Ratio of expenses to average net assets 0.83% 0.78% 0.72% 0.70% 0.71%
Ratio of net investment income to average
net assets 5.86% 5.93% 6.43% 6.60% 7.04%
Portfolio Turnover (b) 64.26% 70.31% 70.63% 38.95% 70.40%
</TABLE>
(*) RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED OR REIMBURSED.
(a) ANNUALIZED.
(b) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
(c) COMBINED DATA FOR THE FUND PRIOR TO AND AFTER REORGANIZATION AS
DISCLOSED IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
42 N A T I O N W I D E
<PAGE> 45
FINANCIAL HIGHLIGHTS - NATIONWIDE TAX-FREE INCOME FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED PERIOD FROM YEAR ENDED PERIOD FROM
OCTOBER 31, MAY 11, 1998 TO OCTOBER 31, MAY 11, 1998 TO
1999 OCTOBER 31, 1998 1999 OCTOBER 31,1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.65 $ 10.48 $ 10.66 $ 10.48
Net investment income 0.49 0.23 0.42 0.20
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.82) 0.17 (0.83) 0.18
----------- ----------- ----------- -----------
Total from investment operations (0.33) 0.40 (0.41) 0.38
----------- ----------- ----------- -----------
Dividends from net investment income (0.49) (0.23) (0.43) (0.20)
Distributions from net realized gain from
investment transactions (0.04) -- (0.04) --
----------- ----------- ----------- -----------
Total distributions (0.53) (0.23) (0.47) (0.20)
----------- ----------- ----------- -----------
Net increase (decrease) in net asset value (0.86) 0.17 (0.88) 0.18
----------- ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $ 9.79 $ 10.65 $ 9.78 $ 10.66
=========== =========== =========== ===========
Total Return (excluding sales charges) (3.26%) 3.86% (4.02%) 3.66%
Net Assets, End of Period (000) $ 2,383 $ 601 $ 3,746 $ 1,477
Ratio of expenses to average net assets 0.96% 1.06% (a) 1.56% 1.66%(a)
Ratio of net investment income to average
net assets 4.73% 4.50%(a) 4.12% 3.94%(a)
Portfolio turnover (b) 42.26% 28.88% 42.26% 28.88%
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
1999 1998(c) 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.66 $ 10.51 $ 10.24 $ 10.22 $ 9.40
Net investment income 0.51 0.50 0.50 0.51 0.51
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.84) 0.23 0.27 0.02 0.84
----------- ----------- ----------- ----------- -----------
Total from investment operations (0.33) 0.73 0.77 0.53 1.35
----------- ----------- ----------- ----------- -----------
Dividends from net investment income (0.51) (0.50) (0.50) (0.51) (0.53)
Distributions from net realized gain from
investment transactions (0.04) (0.08) -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions (0.55) (0.58) (0.50) (0.51) (0.53)
----------- ----------- ----------- ----------- -----------
Net increase in net asset value (0.88) 0.15 0.27 0.02 0.82
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $ 9.78 $ 10.66 $ 10.51 $ 10.24 $ 10.22
=========== =========== =========== =========== ===========
Total Return (excluding sales charges) (3.21%) 7.09% 7.72% 5.31% 14.66%
Net Assets, End of Period (000) $ 226,270 $ 263,662 $ 256,486 $ 264,642 $ 262,484
Ratio of expenses to average net assets 0.71% 0.85% 0.96% 0.96% 0.98%
Ratio of expenses to average net assets(*) N/A 0.93% 1.11% 1.11% 1.13%
Ratio of net investment income to average
net assets 4.93% 4.73% 4.85% 4.98% 5.20%
Ratio of net investment income to average
net assets(*) N/A 4.65% 4.70% 4.83% 5.05%
Portfolio turnover (b) 42.26% 28.88% 39.49% 24.15% 31.70%
</TABLE>
(*) RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED OR REIMBURSED.
(a) ANNUALIZED.
(b) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
(c) COMBINED DATA FOR THE FUND PRIOR TO AND AFTER REORGANIZATION AS DISCLOSED
IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
N A T I O N W I D E 43
<PAGE> 46
FINANCIAL HIGHLIGHTS - NATIONWIDE LONG-TERM U.S. GOVERNMENT FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED PERIOD FROM YEAR ENDED PERIOD FROM
OCTOBER 31, MAY 11, 1998 TO OCTOBER 31, MAY 11, 1998 TO
1999 OCTOBER 31, 1998 1999 OCTOBER 31,1998
----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 11.77 $ 11.24 $ 11.76 $ 11.24
Net investment income 0.59 0.28 0.52 0.25
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.90) 0.53 (0.89) 0.52
Total from investment operations (0.31) 0.81 (0.37) 0.77
Dividends from net investment income (0.58) (0.28) (0.51) (0.25)
Net increase (decrease) in net asset value (0.89) 0.53 (0.88) 0.52
NET ASSET VALUE--END OF PERIOD $ 10.88 $ 11.77 $ 10.88 $ 11.76
Total Return (excluding sales charges) (2.63%) 7.32% (3.15%) 6.90%
Net Assets, End of Period (000) $ 2,041 $ 201 $ 1,876 $ 352
Ratio of expenses to average net assets 1.04% 1.04% (a) 1.64% 1.64% (a)
Ratio of expenses to average net assets(*) 1.14% 1.28% (a) 1.74% 1.90% (a)
Ratio of net investment income to average
net assets 5.29% 5.09% (a) 4.68% 4.52% (a)
Ratio of net investment income to average
net assets(*) 5.19% 4.85% (a) 4.58% 4.26% (a)
Portfolio turnover (b) 84.33% 51.12% 84.33% 51.12%
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
1999 1998(c) 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 11.77 $ 11.19 $ 10.92 $ 11.07 $ 10.12
Net investment income 0.61 0.63 0.66 0.68 0.68
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.89) 0.58 0.27 (0.15) 0.95
Total from investment operations (0.28) 1.21 0.93 0.53 1.63
Dividends from net investment income (0.61) (0.63) (0.66) (0.68) (0.68)
Net increase (decrease) in net asset value (0.89) 0.58 0.27 (0.15) 0.95
NET ASSET VALUE--END OF PERIOD $ 10.88 $ 11.77 $ 11.19 $ 10.92 $ 11.07
Total Return (excluding sales charges) (2.39%) 11.15% 8.84% 5.01% 16.68%
Net Assets, End of Period (000) $ 32,117 $ 40,946 $ 48,549 $ 58,737 $ 69,190
Ratio of expenses to average net assets 0.79% 0.82% 0.85% 0.84% 0.89%
Ratio of expenses to average net assets(*) 0.89% 1.28% 1.60% 1.59% 1.58%
Ratio of net investment income to average
net assets 5.33% 5.55% 6.04% 6.26% 6.42%
Ratio of net investment income to average
net assets(*) 5.44% 5.09% 5.29% 5.51% 5.73%
Portfolio turnover (b) 84.33% 51.12% 52.10% 21.04% 140.55%
</TABLE>
(*)RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED OR REIMBURSED.
(a) ANNUALIZED.
(b) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
(c) COMBINED DATA FOR THE FUND PRIOR TO AND AFTER REORGANIZATION AS DISCLOSED
IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
44 N A T I O N W I D E
<PAGE> 47
FINANCIAL HIGHLIGHTS - NATIONWIDE INTERMEDIATE U.S. GOVERNMENT FUND
- -------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED PERIOD FROM YEAR ENDED PERIOD FROM
OCTOBER 31, MAY 11, 1998 TO OCTOBER 31, MAY 11, 1998 TO
1999 OCTOBER 31, 1998 1999 OCTOBER 31,1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.56 $ 10.24 $ 10.55 $ 10.24
Net investment income 0.51 0.26 0.45 0.23
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.62) 0.32 (0.61) 0.31
Total from investment operations (0.11) 0.58 (0.16) 0.54
Dividends from net investment income (0.51) (0.26) (0.45) (0.23)
Distributions from net realized gain from
investment transactions (0.05) -- (0.05) --
Total distributions (0.56) (0.26) (0.50) (0.23)
Net increase (decrease) in net asset value (0.67) 0.32 (0.66) 0.31
NET ASSET VALUE--END OF PERIOD $ 9.89 $ 10.56 $ 9.89 $ 10.55
Total Return (excluding sales charges) (1.05%) 5.69% (1.57%) 5.29%
Net Assets, End of Period (000) $ 49,601 $ 332 $ 1,148 $ 297
Ratio of expenses to average net assets 0.99% 1.04% (a) 1.64% 1.64% (a)
Ratio of expenses to average net assets(*) 1.15% 1.17% (a) 1.65% 1.86% (a)
Ratio of net investment income to average
net assets 5.13% 5.10% (a) 4.44% 4.59% (a)
Ratio of net investment income to average
net assets(*) 5.29% 4.97% (a) 4.45% 4.37% (a)
Portfolio turnover (b) 51.86% 59.52% 51.86% 59.52%
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
1999 1998(c) 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.57 $ 10.31 $ 10.04 $ 10.12 $ 9.22
Net investment income 0.53 0.56 0.59 0.59 0.59
Net realized gain (loss) and unrealized
appreciation (depreciation) (0.63) 0.34 0.27 (0.08) 0.89
---------- ---------- ---------- ---------- ----------
Total from investment operations (0.10) 0.90 0.86 0.51 1.48
---------- ---------- ---------- ---------- ----------
Dividends from net investment income (0.53) (0.56) (0.59) (0.58) (0.58)
Dividends in excess of net investment income -- -- -- (0.01) --
Distributions from net realized gain from
investment transactions (0.05) (0.08) -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.58) (0.64) (0.59) (0.59) (0.58)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value (0.68) 0.26 0.27 (0.08) 0.90
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 9.89 $ 10.57 $ 10.31 $ 10.04 $ 10.12
========== ========== ========== ========== ==========
Total Return (excluding sales charges) (0.93%) 9.03% 8.86% 5.28% 16.47%
Net Assets, End of Period (000) $ 52,260 $ 50,849 $ 41,328 $ 39,497 $ 39,777
Ratio of expenses to average net assets 0.79% 0.92% 1.07% 1.06% 1.08%
Ratio of expenses to average net assets(*) 0.81% 1.03% 1.22% 1.21% 1.23%
Ratio of net investment income to average
net assets 5.24% 5.43% 5.85% 5.86% 5.92%
Ratio of net investment income to average
net assets(*) 5.26% 5.32% 5.70% 5.71% 5.77%
Portfolio Turnover (b) 51.86% 59.52% 26.58% 9.30% 25.40%
</TABLE>
(*) RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED OR REIMBURSED
(a) ANNUALIZED.
(b) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
(c) COMBINED DATA FOR THE
FUND PRIOR TO AND AFTER REORGANIZATION AS DISCLOSED IN FOOTNOTE 3.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
N A T I O N W I D E 45
<PAGE> 48
FINANCIAL HIGHLIGHTS NATIONWIDE MONEY MARKET
- -------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS R SHARES (a)
PERIOD FROM
JANUARY 4, 1999
TO OCTOBER 31,
1999
-------------
<S> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 1.00
Net investment income 0.04
Dividends from net investment income (0.04)
-------------
NET ASSET VALUE--END OF PERIOD $ 1.00
=============
Total Return (excluding sales charges) 3.69%
Net Assets, End of Period (000) $ 22,295
Ratio of expenses to average net assets 0.64% (b)
Ratio of expenses to average net assets(*) 0.79% (b)
Ratio of net investment income to average
net assets 4.74% (b)
Ratio of net investment income to average
net assets(*) 4.59% (b)
<CAPTION>
PRIME SHARES (c)
YEAR
ENDED YEARS ENDED OCTOBER 31,
OCTOBER 31, 1999 1998 (d) 1997 1996 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.05 0.05 0.05 0.05 0.05
Dividends from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
------------- ------------- ------------- ------------- -------------
NET ASSET VALUE--END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
Total Return (excluding sales charges) 4.61% 5.15% 5.07% 5.05% 5.46%
Net Assets, End of Period (000) $ 1,345,342 $ 1,048,689 $ 820,657 $ 729,500 $ 604,711
Ratio of expenses to average net assets 0.61% 0.59% 0.59% 0.60% 0.62%
Ratio of expenses to average net assets(*) N/A 0.64% 0.64% 0.65% 0.67%
Ratio of net investment income to average
net assets 4.52% 4.96% 4.96% 4.93% 5.34%
Ratio of net investment income to average
net assets(*) N/A 4.91% 4.91% 4.88% 5.29%
</TABLE>
(*) RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED OR REIMBURSED.
(a) THE NATIONWIDE MONEY MARKET CLASS R SHARES WERE FIRST OFFERED TO THE
PUBLIC ON JANUARY 4, 1999.
(b) ANNUALIZED.
(c) ON JANUARY 4, 1999, THE EXISTING SHARE OF THE NATIONWIDE MONEY MARKET
FUND WERE RENAMED PRIME SHARES.
(d) COMBINED DATA FOR THE FUND PRIOR TO AND AFTER REORGANIZATION. SEE
ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
46 N A T I O N W I D E
<PAGE> 49
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nationwide Mutual Funds ("NMF" or the "Trust"), formerly known as Nationwide
Investing Foundation III, is an open-end management investment company. NMF was
created under the laws of Ohio as an Ohio business trust pursuant to a
Declaration of Trust dated as of October 31, 1997, as amended as of November 5,
1999, and is registered under the Investment Company Act of 1940, as amended.
The Trust offers shares in fifteen separate series, or mutual funds, each with
its own investment objectives. This report contains the financial statements and
financial highlights of the eight series (the "Funds") listed below.
- - Nationwide Mid Cap Growth Fund
- - Nationwide Growth Fund
- - Nationwide Fund
(together referred to as the "Stock Funds")
- - Nationwide Bond Fund
- - Nationwide Tax-Free Income Fund
- - Nationwide Long-Term U.S. Government Bond Fund
- - Nationwide Intermediate U.S. Government Bond Fund
(together referred to as the "Bond Funds")
- - Nationwide Money Market Fund
(referred to as the "Money Market Fund")
The Stock and Bond Funds currently offer Class A, B, and D Shares. Class A
Shares are purchased with a front-end sales load and a 0.25% 12b-1 fee. Class B
Shares are subject to a contingent deferred sales charge ("CDSC") on redemption
and a 1.00% 12b-1 fee for the Stock Funds and an 0.85% 12b-1 fee for the Bond
Funds. Class D Shares are purchased with a front-end sales load but no 12b-1 fee
and are only offered to certain investors. The Money Market Fund cur- rently
offers two classes of shares called Prime and Class R Shares. The Class R Shares
were first offered to the public on January 4, 1999, and the existing shares of
the Money Market Fund were renamed Prime Shares. The Prime Shares have no sales
charge, or 12b-1 fee, but do have a 0-10% administrative servicing fee. Class R
Shares are purchased with no sales charge but do have a 0.15% 12b-1 fee, which
is currently being waived, and a 0.25% administrative servic- ing fee.
(a) SECURITY VALUATION
(1) Mid Cap Growth, Growth, Fund, Bond, Tax-Free Income, Long-Term and
Intermediate U.S. Government Bond Funds:
Securities traded on a national securities exchange are valued at the
last quoted sale price as provided by an independent pricing agent.
Securities traded in the over-the- counter (OTC) market are valued at
the last quoted sale price, or if there is no sale price, the last
quoted bid price as provided by an independent pricing agent. U.S
Government securities are valued at the last quoted bid price as
provided by an independent pricing agent. All other debt securities are
valued by a combination of daily quotes and matrix evaluations.
(2) Money Market Fund:
Securities are valued at amortized cost, which approximates market
value, in accordance with Rule 2a-7 of the Investment Company Act of
1940, as amended.
(3) All Funds:
The value of a repurchase agreement generally equals the purchase price
paid by the Fund (cost) plus the interest accrued to date. The seller,
under the repurchase agreement, is required to maintain the market value
of the underlying collateral at not less than the value of the
repurchase agreement. Securities subject to repurchase agreements are
held by the Federal Reserve/Treasury book-entry system or by the Fund's
custodian or an approved sub-custodian.
Securities for which reliable market quotations are not available or for
which an independent pricing agent does not provide a value or provides
a value that does not represent fair value in the judgement of the
Fund's investment adviser are valued in accordance with procedures
authorized by the Trust's Board of Trustees.
(b) SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on an accrual
basis and may include, where applicable, the pro rata amortization of
premium or discount.
(c) FEDERAL INCOME TAXES
Each Funds' policy is to qualify as a regulated investment com- pany under
the Internal Revenue Code and to distribute all tax- able income to
shareholders. Therefore no provision has been made for federal income taxes
as it is the intention of the Funds to continue such qualification. To the
extent net realized gains are offset through the application of a capital
loss carryover, they will not be distributed to shareholders and will be
retained by the applicable Fund. Withholding taxes have been paid or
provided for in accordance with the applicable tax rates and rules.
As of October 31, 1999, the Bond and Tax-Free Income Funds had net capital
loss carry forwards in the amounts of $7,241,215 and $1,065,849,
respectively. If unused, the Bond Fund carry forwards will expire within 3
to 8 years and the Tax- Free Income Fund carry forwards will expire within 5
to 8 years.
NATIONWIDE 47
<PAGE> 50
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
(d) DIVIDENDS TO SHAREHOLDERS
(1) Mid Cap Growth, Growth, and Fund:
Dividend income, if any, is declared and paid quarterly and is recorded
on the ex-dividend date.
(2) Bond, Tax-Free Income, Long-Term and Intermediate U.S. Government Bond,
and Money Market:
Dividend income is declared and recorded daily and paid monthly.
(3) All Funds
Distributable net realized capital gains, if any, are declared and
distributed at least annually.
Dividends and distributions to shareholders 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. In accordance with
AICPA (American Institute of Certified Public Accountants) Statement of
Position 93-2, permanent differences 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. These reclassifications have no effect
upon the net asset value of the respective Funds.
Accordingly, as of October 31, 1999, undistributed net investment
income, undistributed net realized gains and capital paid in excess of
par value have been adjusted. Negative amounts represent credits and
positive amounts represent debits. The adjustments are as follows:
CAPITAL PAID UNDISTRIBUTED UNDISTRIBUTED
IN EXCESS OF NET INVESTMENT CAPITAL
PAR VALUE INCOME GAIN
--------- ------ ----
Mid Cap Growth $ (1,331) $ 16,206 $ (14,875)
Growth Fund 142,389 276,766 (419,155)
Money Market (1,822) 222,236 (220,414)
(e) EXPENSES
General expenses of the Trust, not directly attributable to a series or to
any class of shares, are allocated to the Funds based upon each Fund's
relative average net assets or some other appropriate basis, as approved by
the Trust's Board of Trustees. Once these expenses are allocated to a Fund,
they are sub- allocated to the classes based on total settled shares
outstanding of each class for the Bond and Money Market Funds, and total
shares outstanding of each class for the Stock Funds.
Direct expenses of a Fund are allocated to that Fund and sub- allocated to
the classes by the methods mentioned above.
Direct expenses of a class are allocated to that class unless otherwise
directed by the Trust's Board of Trustees. During the year ended October 31,
1999, no expenses were otherwise directed.Distribution and administrative
servicing fees are borne by the specific class of shares to which they
apply.
(f) USE OF ESTIMATES
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions. These estimates 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 revenues and
expenses during the period. Actual results could differ from those
estimates.
48 NATIONWIDE
<PAGE> 51
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
(g) CAPITAL SHARE TRANSACTIONS
Transactions in class level shares of the Funds were as follows:
<TABLE>
<CAPTION>
MID CAP GROWTH GROWTH
YEAR ENDED MAY 11, 1998 YEAR ENDED MAY 11, 1998
OCTOBER 31, TO OCTOBER 31, OCTOBER 31, TO OCTOBER 31,
CAPITAL TRANSACTIONS: 1999 1998(a) 1999 1998(a)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 1,208,278 $ 344,800 $ 5,959,912 $ 3,029,677
Dividends reinvested 5,130 -- 58,125 --
Cost of shares redeemed (327,179) (18,755) (1,715,316) (178,907)
----------- ----------- ------------ ------------
Change in net assets $ 886,229 $ 326,045 $ 4,302,721 $ 2,850,770
=========== =========== ============ ============
CLASS B SHARES:
Proceeds from shares issued $ 697,347 $ 281,397 $ 4,835,276 $ 1,649,716
Dividends reinvested 4,303 -- 35,528 --
Cost of shares redeemed (75,089) (17,090) (549,605) (97,466)
----------- ----------- ------------ ------------
Change in net assets $ 626,561 $ 264,307 $ 4,321,199 $ 1,552,250
=========== =========== ============ ============
- -----------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998(b) 1999 1998(b)
- -----------------------------------------------------------------------------------------------
CLASS D SHARES:
Proceeds from shares issued $ 1,585,850 $ 734,016 $112,264,841 $136,465,917
Dividends reinvested 118,206 2,767,469 19,012,513 134,704,429
Cost of shares redeemed (1,920,802) (1,703,400) (164,412,748) (166,603,194)
----------- ----------- ------------ ------------
Change in net assets $ (216,746) $ 1,798,085 $(33,135,394) $104,567,152
=========== =========== ============ ============
- -----------------------------------------------------------------------------------------------
YEAR ENDED MAY 11, 1998 YEAR ENDED MAY 11, 1998
OCTOBER 31, TO OCTOBER 31, OCTOBER 31, TO OCTOBER 31,
SHARE TRANSACTIONS: 1999 1998(a) 1999 1998(a)
- -----------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 62,120 18,405 332,934 188,025
Reinvested 291 -- 3,652 --
Redeemed (16,540) (1,143) (96,101) (11,397)
----------- ----------- ------------ ------------
Change in shares 45,871 17,262 240,485 176,628
=========== =========== ============ ============
CLASS B SHARES:
Issued 36,519 15,253 271,942 103,812
Reinvested 245 -- 2,251 --
Redeemed (3,838) (940) (30,518) (6,350)
----------- ----------- ------------ ------------
Change in shares 32,926 14,313 243,675 97,462
=========== =========== ============ ============
- -----------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998(b) 1999 1998(b)
- -----------------------------------------------------------------------------------------------
CLASS D SHARES:
Issued 80,891 37,562 6,440,118 8,448,982
Reinvested 6,712 144,592 1,191,011 8,931,831
Redeemed (99,114) (86,830) (9,425,421) (10,451,363)
----------- ----------- ------------ ------------
Change in shares (11,511) 95,324 (1,794,292) 6,929,450
=========== =========== ============ ============
- -----------------------------------------------------------------------------------------------
</TABLE>
(a) FIRST OFFERED TO THE PUBLIC ON MAY 11, 1998.
(b) COMBINED DATA FOR FUND (PRE-REORGANIZATION) AND CLASS D (AFTER
REORGANIZATION) AS DISCLOSED IN FOOTNOTE 3.
NATIONWIDE 49
<PAGE> 52
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
FUND BOND
YEAR ENDED MAY 11, 1998 YEAR ENDED MAY 11, 1998
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
CAPITAL TRANSACTIONS: 1999 1998(a) 1999 1998(a)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 41,367,193 $ 20,601,894 $ 2,757,274 $ 1,409,285
Dividends reinvested 506,123 34,351 133,426 13,581
Cost of shares redeemed (9,499,936) (1,354,138) (872,890) (64,710)
------------- ------------- ------------- -------------
Change in net assets $ 32,373,380 $ 19,282,107 $ 2,017,810 $ 1,358,156
============= ============= ============= =============
CLASS B SHARES:
Proceeds from shares issued $ 33,425,626 $ 13,522,175 $ 1,522,212 $ 505,043
Dividends reinvested 259,935 6,932 64,331 3,572
Cost of shares redeemed (3,489,957) (411,234) (315,102) (17,744)
------------- ------------- ------------- -------------
Change in net assets $ 30,195,604 $ 13,117,873 $ 1,271,441 $ 490,871
============= ============= ============= =============
- -------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998(b) 1999 1998(b)
- -------------------------------------------------------------------------------------------------------
CLASS D SHARES:
Proceeds from shares issued $ 348,376,075 $ 632,838,515 $ 27,406,883 $ 31,781,604
Dividends reinvested 51,361,279 161,615,797 6,612,729 6,440,749
Cost of shares redeemed (302,247,342) (291,676,055) (34,025,965) (31,346,662)
------------- ------------- ------------- -------------
Change in net assets $ 97,490,012 $ 502,778,257 $ (6,353) $ 6,875,691
============= ============= ============= =============
- -------------------------------------------------------------------------------------------------------
YEAR ENDED MAY 11, 1998 YEAR ENDED MAY 11, 1998
OCTOBER 31, TO OCTOBER 31, OCTOBER 31, TO OCTOBER 31,
SHARE TRANSACTIONS: 1999 1998(a) 1999 1998(a)
- -------------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 1,282,068 696,756 290,848 145,277
Reinvested 16,287 1,217 14,327 1,388
Redeemed (292,316) (46,398) (94,109) (6,616)
------------- ------------- ------------- -------------
Change in shares 1,006,039 651,575 211,066 140,049
============= ============= ============= =============
CLASS B SHARES:
Issued 1,039,876 461,348 159,806 51,705
Reinvested 8,445 245 6,912 365
Redeemed (108,903) (14,553) (33,885) (1,821)
------------- ------------- ------------- -------------
Change in shares 939,418 447,040 132,833 50,249
============= ============= ============= =============
- -------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998(b) 1999 1998(b)
- -------------------------------------------------------------------------------------------------------
CLASS D SHARES:
Issued 10,884,336 21,585,416 2,875,713 3,292,508
Reinvested 1,652,268 5,737,021 704,599 669,111
Redeemed (9,359,878) (10,054,183) (3,591,494) (3,255,882)
------------- ------------- ------------- -------------
Change in shares 3,176,726 17,268,254 (11,182) 705,737
============= ============= ============= =============
- -------------------------------------------------------------------------------------------------------
</TABLE>
(a) FIRST OFFERED TO THE PUBLIC ON MAY 11, 1998
(b) COMBINED DATA FOR FUND (PRE-REORGANIZATION) AND CLASS D (AFTER
REORGANIZATION) AS DISCLOSED IN FOOTNOTE 3.
50 NATIONWIDE
<PAGE> 53
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
TAX-FREE INCOME LONG-TERM U.S. GOV'T BOND
YEAR ENDED MAY 11, 1998 YEAR ENDED MAY 11, 1998
OCTOBER 31, TO OCTOBER 31, OCTOBER 31, TO OCTOBER 31,
CAPITAL TRANSACTIONS: 1999 1998(a) 1999 1998(a)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 2,259,772 $ 628,673 $ 2,383,010 $ 194,674
Dividends reinvested 42,319 5,219 54,419 2,221
Cost of shares redeemed (359,948) (35,694) (509,694) (570)
------------ ------------ ------------ ------------
Change in net assets $ 1,942,143 $ 598,198 $ 1,927,735 $ 196,325
============ ============ ============ ============
CLASS B SHARES:
Proceeds from shares issued $ 3,170,437 $ 1,461,484 $ 1,806,997 $ 360,886
Dividends reinvested 93,504 10,353 51,218 1,906
Cost of shares redeemed (710,390) -- (239,829) (16,822)
------------ ------------ ------------ ------------
Change in net assets $ 2,553,551 $ 1,471,837 $ 1,618,386 $ 345,970
============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998(b) 1999 1998(b)
- ----------------------------------------------------------------------------------------------------
CLASS D SHARES:
Proceeds from shares issued $ 12,209,548 $ 14,709,249 $ 2,852,827 $ 1,030,188
Proceeds from merger -- 16,109,654 -- --
Dividends reinvested 9,529,591 10,142,954 1,116,872 1,254,761
Cost of shares redeemed (38,410,675) (37,620,907) (9,775,714) (12,011,254)
------------ ------------ ------------ ------------
Change in net assets ($16,671,536) $ 3,340,950 ($ 5,806,015) ($ 9,726,305)
============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------
YEAR ENDED MAY 11, 1998 YEAR ENDED MAY 11, 1998
OCTOBER 31, TO OCTOBER 31, OCTOBER 31, TO OCTOBER 31,
SHARE TRANSACTIONS: 1999 1998(a) 1999 1998(a)
- ----------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 217,949 59,311 211,133 16,928
Reinvested 4,141 490 4,914 190
Redeemed (35,114) (3,385) (45,519) (49)
------------ ------------ ------------ ------------
Change in shares 186,976 56,416 170,528 17,069
============ ============ ============ ============
CLASS B SHARES:
Issued 303,984 137,530 159,735 31,226
Reinvested 9,084 971 4,626 163
Redeemed (68,657) -- (21,791) (1,462)
------------ ------------ ------------ ------------
Change in shares 244,411 138,501 142,570 29,927
============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998(b) 1999 1998(b)
- ----------------------------------------------------------------------------------------------------
CLASS D SHARES:
Issued 1,171,056 1,385,767 249,512 87,989
Issued from Merger -- 1,527,760 -- --
Reinvested 919,229 957,316 99,457 110,172
Redeemed (3,701,925) (3,546,552) (875,642) (1,058,074)
------------ ------------ ------------ ------------
Change in shares (1,611,640) 324,291 (526,673) (859,913)
============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------
</TABLE>
(a) FIRST OFFERED TO THE PUBLIC ON MAY 11, 1998.
(b) COMBINED DATA FOR FUND (PRE-REORGANIZATION) AND CLASS D (AFTER
REORGANIZATION) AS DISCLOSED IN FOOTNOTE 3.
NATIONWIDE 51
<PAGE> 54
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
INTERMEDIATE U.S. GOV'T BOND
YEAR ENDED MAY 11, 1998
OCTOBER 31, TO OCTOBER 31,
CAPITAL TRANSACTIONS: 1999 1998(a)
- ---------------------------------------------------------------
CLASS A SHARES:
Proceeds from shares issued $ 57,314,409 $ 371,555
Dividends reinvested 478,395 4,611
Cost of shares redeemed (8,379,780) (48,761)
------------ ------------
Change in net assets $ 49,413,024 $ 327,405
============ ============
CLASS B SHARES:
Proceeds from shares issued $ 962,615 $ 298,918
Dividends reinvested 28,887 1,475
Cost of shares redeemed (94,251) (5,496)
------------ ------------
Change in net assets $ 897,251 $ 294,897
============ ============
- ---------------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998(b)
- ---------------------------------------------------------------
CLASS D SHARES:
Proceeds from shares issued $ 27,360,328 $ 29,865,697
Dividends reinvested 2,493,163 2,274,519
Cost of shares redeemed (24,992,264) (23,746,776)
------------ ------------
Change in net assets $ 4,861,227 $ 8,393,440
============ ============
- ---------------------------------------------------------------
YEAR ENDED MAY 11, 1998
OCTOBER 31, TO OCTOBER 31,
SHARE TRANSACTIONS: 1999 1998(a)
- ---------------------------------------------------------------
CLASS A SHARES:
Issued 5,785,682 35,666
Reinvested 48,259 438
Redeemed (848,159) (4,652)
------------ ------------
Change in shares 4,985,782 31,452
============ ============
CLASS B SHARES:
Issued 94,595 28,512
Reinvested 2,866 140
Redeemed (9,464) (523)
------------ ------------
Change in shares 87,997 28,129
============ ============
- ---------------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, TO OCTOBER 31,
1999 1998(b)
- ---------------------------------------------------------------
CLASS D SHARES:
Issued 2,652,093 2,859,864
Reinvested 245,086 218,950
Redeemed (2,424,788) (2,275,217)
------------ ------------
Change in shares 472,391 803,597
============ ============
- ---------------------------------------------------------------
(a) FIRST OFFERED TO THE PUBLIC ON MAY 11, 1998.
(b) COMBINED DATA FOR FUND (PRE-REORGANIZATION) AND CLASS D (AFTER
REORGANIZATION) AS DISCLOSED IN FOOTNOTE 3.
52 NATIONWIDE
<PAGE> 55
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
MONEY MARKET
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
CAPITAL TRANSACTIONS: 1999 1998(b)
- --------------------------------------------------------------------------------
PRIME SHARES:
Proceeds from shares issued $ 1,424,550,062 $ 1,471,783,844
Proceeds from Merger -- 4,130,470
Dividends reinvested 51,257,113 43,764,561
Cost of shares redeemed (1,179,153,929) (1,291,647,722)
--------------- ---------------
Change in net assets $ 296,653,246 $ 228,031,153
=============== ===============
- --------------------------------------------------------------------------------
PERIOD FROM
JANUARY 4, 1999
TO OCTOBER 31, 1999(a)
- --------------------------------------------------------------------------------
CLASS R SHARES:
Proceeds from shares issued $ 33,525,592
Dividends reinvested 182,819
Cost of shares redeemed (11,413,801)
------------
Change in net assets $ 22,294,610
============
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
SHARE TRANSACTIONS: 1999 1998(b)
- --------------------------------------------------------------------------------
PRIME SHARES:
Issued 1,424,571,246 1,471,783,848
From Merger -- 4,129,302
Reinvested 51,257,113 43,764,561
Redeemed (1,179,153,929) (1,291,647,722)
--------------- ---------------
Change in shares 296,674,430 228,029,989
=============== ===============
- --------------------------------------------------------------------------------
PERIOD FROM
JANUARY 4, 1999
TO OCTOBER 31, 1999(a)
- --------------------------------------------------------------------------------
CLASS R SHARES:
Issued 33,525,592
Reinvested 182,819
Redeemed (11,413,801)
------------
Change in shares 22,294,610
============
- --------------------------------------------------------------------------------
(a) ON JANUARY 4, 1999, THE EXISTING SHARES OF THE NATIONWIDE MONEY MARKET FUND
WERE RENAMED PRIME SHARES. THE CLASS R SHARES WERE FIRST OFFERED TO THE
PUBLIC ON JANUARY 4, 1999.
(b) COMBINED DATA FOR FUND PRE-REORGANIZATION AND AFTER REORGANIZATION AS
DISCUSSED IN FOOTNOTE 3.
NATIONWIDE 53
<PAGE> 56
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
2. TRANSACTION WITH AFFILIATES
On September 1, 1999, Villanova Mutual Fund Capital Trust ("VMF") replaced
Nationwide Advisory Services, Inc. ("NAS"), an affiliated company, as investment
adviser to the Funds. Under the terms of the investment advisory agreement, VMF
earns an annual management fee based on a percentage of the average daily net
assets of each Fund. See the management fee schedule in the below table.
Additional information regarding investment advisory fees paid is as follows for
the year ended October 31, 1999: Fees may be voluntarily waived or reimbursed to
the Funds in order to maintain expense ratios at or below stated expense caps.
The Mid Cap Growth Fund's expenses were limited to 1.25% for Class A, 2.00% for
Class B, and 1.00% for Class D. The Long-Term U.S. Government Bond Fund's
expenses were limited to 1.04% for Class A, 1.64% for Class B, and 0.79% for
Class D. The Intermediate U.S. Government Bond Fund's expenses were limited to
0.99% for Class A, 1.64% for Class B, and 0.79% for Class D. During the period
ended October 31, 1999, VMF and/or NAS voluntarily reduced expenses for the Mid
Cap Growth and Long-Term U.S. Government Bond Funds in the amounts of $59,278,
and $40,770, respectively.
<TABLE>
<CAPTION>
TOTALFEES ADVISORY FEE
FUND PAID SCHEDULE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mid Cap Growth $ 66,283 Up to $250 million 0.60%
Growth 5,873,926 On the next $750 million 0.575%
Fund 13,888,390 On the next $1 billion 0.55%
On the next $3 billion 0.525%
On $5 billion and more 0.50%
- --------------------------------------------------------------------------------------------
Bond 674,918 Up to $250 million 0.50%
Tax-Free Income 1,263,813 On the next $750 million 0.475%
Long-Term U.S. Gov't 198,048 On the next $1 billion 0.45%
Intermediate U.S. Gov't 314,314 On the next $3 billion 0.425%
On $5 billion and more 0.40%
- --------------------------------------------------------------------------------------------
Money Market 4,709,925 Up to $1 billion; 0.40%
On the next $1 billion 0.38%
On the next $3 billion 0.36%
On $5 billion and more 0.34%
</TABLE>
Also on September 1, 1999 Villanova SA Capital Trust ("VSA") replaced NAS as
administrator. Per the Fund Administration Agreement, VSA receives fees for
providing various administrative and accounting services, including daily
valuation of the Funds' shares and preparation of financial statements, tax
returns, and regulatory reports. Each Fund pays VSA an annual fee based on each
Fund's average daily net assets. These fees are calculated daily and paid
monthly according to the following schedule for the period ended October 31,
1999:
<TABLE>
<CAPTION>
FEES FUND ADMINISTRATION
FUND PAID FEE SCHEDULE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mid Cap Growth $ 7,733
Growth 553,398
Fund 1,146,258 Up to $250 million 0.07%
Bond 94,488 On the next $750 million 0.05%
Tax-Free Income 175,965 On $1 billion and more 0.04%
Long-Term U.S. Gov't 27,727
Intermediate U.S. Gov't 44,004
Money Market 624,729
</TABLE>
NAS receives fees for services as principal underwriter for Class Aand D Shares
of the Stock and Bond Funds in the form of a front-end sales charge. Such fees
are deducted from and are not included in proceeds from sales of Class A and D
Shares of the Stock and Bond Funds. From such fees, NAS pays sales commissions,
salaries, and other expenses. For the period ended October 31, 1999, the fees
were as follows:
54 NATIONWIDE
<PAGE> 57
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
FUND CLASS A SHARES CLASS D SHARES
- --------------------------------------------------------------------------------
Mid Cap Growth $ 29,943 $ 13,074
Growth 215,984 491,039
Fund 1,527,776 1,158,030
Bond 66,710 52,127
Tax-Free Income 66,058 149,486
Long-Term U.S. Gov't 66,262 12,390
Intermediate U.S. Gov't 41,357 23,419
NAS receives fees for services as principal underwriter for Class B Shares of
the Stock and Bond Funds. Such fees are contingent deferred sales charges
(CDSCs) ranging from 1% to 5% imposed on redemptions of Class B Shares which may
cause the current value of an account to fall below the total purchase payments
made during the past five years. CDSCs collected on for the period ended October
31, 1999, on redemptions of Class B Shares were as follows:
FUND CLASS B SHARES
- --------------------------------------------------------------------------------
Mid Cap Growth $ 1,160
Growth 17,650
Fund 85,844
Bond 5,307
Tax-Free Income 15,816
Long-Term U.S. Gov't 4,279
Intermediate U.S. Gov't 2,553
NAS may receive fees from Class A and B Shares of the Stock and Bond Funds and
from Class R Shares of the Money Market Fund for distribution and/or shareholder
services pursuant to a Rule 12b-1 Distribution Plan approved by the Trust's
Board of Trustees. These fees are based on average daily net assets of the
respective class of each such Fund at an annual rate of 0.25% of Class A Shares
of such Funds, 1.00% of Class B Shares of the Stock Funds, 0.85% of Class B
Shares of the Bond Funds, and 0.15% of Class R Shares of the Money Market Fund.
For the period ended October 31, 1999, the fees were as follows:
<TABLE>
<CAPTION>
FUND CLASS A SHARES CLASS B SHARES CLASS R SHARES
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mid Cap Growth $ 1,752 $ 5,800 --
Growth 12,820 38,033 --
Fund 99,058 306,106 --
Bond 6,645 11,218 --
Tax-Free Income 3,866 24,020 --
Long-Term U.S. Gov't 3,024 10,541 --
Intermediate U.S. Gov't 22,682 6,469
Money Market -- -- 5,734*
</TABLE>
* All distribution fees were waived for the Class R Shares of the Money Market
Fund for the period from January 4, 1999 (first offered to the public) through
October 31, 1999.
As stated above, on September 1, 1999, NASwas replaced by VMFas investment
advisor and VSAas administrator. Advisory and fund administration fees paid by
the Fund prior to that date were paid to NAS. After September 1, 1999, advisory
fees were paid to VMFand fund administration fees were paid to VSA. The
information provided in this report relates to the total advisory and fund
administration fees paid by the Fund for the fiscal period ended October 31,
1999.
Also on September 1, 1999, VSA entered into an agreement with BISYS Fund
Services Ohio, to provide sub-administration and sub-transfer agent services.
Nationwide Investors Services, Inc. (NISI), a subsidiary of VSA, serves as
Transfer and Dividend Disbursing Agent for the Funds. For these services, NAS
receives an annual per account fee from each of the Funds at the following
rates: $16 per Stock Fund account, $18 per Bond Fund account, and $27 per Money
Market Fund Prime Share accounts and 0.01% based on average net assets of the
Money Market Fund's Class R Shares.
NATIONWIDE 55
<PAGE> 58
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
3. REORGANIZATION
At a meeting on November 7, 1997, the Boards of Trustees for the Nationwide
Investing Foundation ("NIF"), Nationwide Investing Foundation II ("NIF II"), and
Financial Horizons Investment Trust ("FHIT") approved an Agreement and Plan of
Reorganization and Liquidation (the "Reorganization") between NIF, NIF II, FHIT
and NMF (then known as Nationwide Investing Foundation III). At a Special
Meeting of NIF, NIF II, and FHIT shareholders, held on February 18, 1998, the
Reorganization was approved. The Reorganization, which qualified as a tax-free
exchange for federal income tax purposes, was completed on May 11, 1998. The
following transactions occurred:
(a) The transfer of all assets, subject to liabilities, of the NIF Growth, NIF
Nationwide Fund, NIF Bond, and NIF II Tax-Free Income Funds to a series of
NMF which bear the same names, in exchange for Class D Shares which were
distributed to share holders for each of the respective Funds.
(b) The transfer of all assets, subject to liabilities, of the NIF Money Market
Fund to a series of NMF which bears the same name, in exchange for shares of
the new series in NMF (now known as the Prime Shares), which were
distributed to the shareholders of the NIF Money Market Fund.
(c) The transfer of all assets, subject to liabilities, of the NIF II U.S.
Government Income Fund to a series of NMF which bears the name Nationwide
Intermediate U.S. Government Bond Fund, in exchange for Class D shares of
Nationwide Intermediate U.S. Government Bond Fund, which were distributed to
shareholders of the NIF II U.S. Government Income Fund.
(d) The transfer of all assets, subject to liabilities, of the FHIT Cash Reserve
Fund to a series of NMF (now known as the Prime Shares) which bears the name
Nationwide Money Market Fund, in exchange for shares of the Nationwide
Market Fund, which were distributed to shareholders of the FHIT Cash Reserve
Fund.
(e) The transfer of all assets, subject to liabilities, of the FHIT Growth Fund
to a series of NMF which bears the name Nationwide Mid Cap Growth Fund, in
exchange for Class D Shares of the Nationwide Mid Cap Growth Fund, which
were distributed to shareholders of the FHIT Growth Fund.
(f) The transfer of all assets, subject to liabilities, of the FHIT U.S.
Government Bond Fund to a series of NMF which bears the name Nationwide
Long-Term U.S. Government Bond Fund, in exchange for Class D Shares of the
Nationwide Long-Term U.S. Government Bond Fund, which were distributed to
the shareholders of the FHIT U.S. Government Bond Fund.
(g) The transfer of all assets, subject to liabilities, of the FHIT Municipal
Bond Fund to a series of NMF which bears the name Nationwide Tax-Free Income
Fund, in exchange for Class D Shares of the Nationwide Tax-Free Income Fund,
which were distributed to the shareholders of the FHIT Municipal Bond Fund.
The following is a summary of shares outstanding, net asset value per share and
unrealized appreciation immediately before and after the Reorganization:
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER REORGANIZATION
FHIT GROWTH NATIONWIDE MID CAP GROWTH FUND
FUND* (CLASS D SHARES)
- -------------------------------------------------------------------------------------
<S> <C> <C>
Shares 29,244 529,244
Net assets $ 10,412,104 $ 10,412,104
Net asset value: $ 19.67 $ 19.67
Unrealized appreciation $ (7,267) $ (7,267)
- -------------------------------------------------------------------------------------
BEFORE REORGANIZATION AFTER REORGANIZATION
FHIT GROWTH NATIONWIDE MID CAP GROWTH FUND
FUND* (CLASS D SHARES)
- -------------------------------------------------------------------------------------
Shares 58,974,459 58,974,459
Net assets $973,860,861 $973,860,861
Net asset value: $ 16.51 $ 16.51
Unrealized appreciation $376,996,601 $376,996,601
- -------------------------------------------------------------------------------------
</TABLE>
*DENOTES SURVIVING ACCOUNTING ENTITY
56 NATIONWIDE
<PAGE> 59
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER REORGANIZATION
NATIONWIDE GROWTH NATIONWIDE GROWTH FUND
FUND* (CLASS D SHARES)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Shares 66,709,378 66,709,378
Net assets $1,997,239,223 $1,997,239,223
Net asset value: $ 29.94 $ 29.94
Unrealized appreciation $ 947,678,171 $ 947,678,171
- --------------------------------------------------------------------------------------
BEFORE REORGANIZATION AFTER REORGANIZATION
NATIONWIDE NATIONWIDE FUND
FUND* (CLASS D SHARES)
- --------------------------------------------------------------------------------------
Shares 58,974,459 58,974,459
Net assets $ 973,860,861 $ 973,860,861
Net asset value: $ 16.51 $ 16.51
Unrealized appreciation $ 376,996,601 $ 376,996,601
- --------------------------------------------------------------------------------------
BEFORE REORGANIZATION AFTER REORGANIZATION
NATIONWIDE BOND NATIONWIDE BOND FUND
FUND* (CLASS D SHARES)
- --------------------------------------------------------------------------------------
Shares 13,439,756 13,439,756
Net assets $ 128,008,745 $ 128,008,745
Net asset value: $ 9.52 $ 9.52
Unrealized appreciation $ 3,510,206 $ 3,510,206
- --------------------------------------------------------------------------------------
BEFORE REORGANIZATION AFTER REORGANIZATION
NATIONWIDE FHIT NATIONWIDE
TAX-FREE INCOME MUNICIPAL BOND TAX-TREE
FUND* FUND (CLASS D SHARES)
- --------------------------------------------------------------------------------------
Shares 24,143,180 1,430,808 25,670,940
Net assets $252,969,806 $ 16,007,718 $ 268,977,524
Net asset value: $ 10.48 $ 11.19 $ 10.48
Unrealized appreciation $ 13,424,189 $ 629,072 $ 14,053,261
- --------------------------------------------------------------------------------------
BEFORE REORGANIZATION AFTER REORGANIZATION
FHIT NATIONWIDE U.S. LONG-
GOVERNMENT BOND TERM GOVERNMENT BOND
FUND* (CLASS D SHARES)
- --------------------------------------------------------------------------------------
Shares 3,845,833 3,845,833
Net assets $ 43,241,040 $ 43,241,040
Net asset value: $ 11.24 $ 11.24
Unrealized appreciation $ 1,902,379 $ 1,902,379
- --------------------------------------------------------------------------------------
Before Reorganization After Reorganization
Nationwide U.S. Nationwide U.S. Intermediate
Government Income Government Bond
Fund* (Class D Shares)
- --------------------------------------------------------------------------------------
Shares 4,424,094 4,424,094
Net assets $ 45,297,552 $ 45,297,552
Net asset value: $ 10.24 $ 10.24
Unrealized appreciation $ 924,514 $ 924,514
- --------------------------------------------------------------------------------------
*DENOTES SURVIVING ACCOUNTING ENTITY.
</TABLE>
NATIONWIDE 57
<PAGE> 60
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER REORGANIZATION
NATIONWIDE FHIT NATIONWIDE
MONEY MARKET CASH RESERVE MONEY MARKET
FUND* FUND FUND
(NOW KNOWN AS PRIME SHARES)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares 888,109,330 4,129,302 892,238,632
Net assets $888,109,008 $ 4,130,470 $892,239,478
Net asset value: $ 1.00 $ 1.00 $ 1.00
Unrealized appreciation $ -- $ -- $ --
- ----------------------------------------------------------------------------------------------------------
*DENOTES SURVIVING ACCOUNTING ENTITY
</TABLE>
4. BANK LOANS
NMF has an unsecured bank line of credit of $50,000,000 for the purpose of
funding redemptions. Borrowings under this arrangement bear interest at the
Federal Funds rate plus 0.50%.These interest costs are included in custodian
fees in the Statements of Operations. No compensating balances are required.
5. INVESTMENT TRANSACTIONS
NONU.S. GOVERNMENT SECURITIES
PURCHASES SALES
- --------------------------------------------------------
Mid Cap Growth $ 4,298,136 $ 3,895,228
Growth 345,302,949 380,157,274
Fund 426,023,821 38,024,573
Bond 43,417,994 46,470,687
Tax-Free Income 106,331,491 120,023,774
Long-Term Gv't Bond -- --
Interm. Gv't Bond -- --
Money Market -- --
U.S. GOVERNMENT SECURITIES
PURCHASES SALES
- --------------------------------------------------------
Mid Cap Growth $ -- $ --
Growth -- --
Fund -- --
Bond 41,217,333 35,459,815
Tax-Free Income -- --
Long-Term Gv't Bond 32,011,499 35,781,996
Interm. Gv't Bond 78,796,246 31,260,038
Money Market -- --
Realized gains and losses have been computed on the first-in, first-out basis.
Included in net unrealized appreciation (depreciation) for federal income tax
purposes at October 31, 1999, are the following components:
GROSS GROSS NETREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
- ------------------------------------------------------------------------------
Mid Cap Growth $ 4,061,118 $ (1,251,155) $ 2,809,963
Growth 425,890,317 (79,659,929) 346,230,388
Fund 1,084,519,037 (94,827,025) 989,692,012
Bond 696,379 (4,594,151) (3,897,772)
Tax-Free Income 5,945,303 (8,115,744) (2,170,441)
Long-Term Gv't Bond 286,222 (811,538) (525,316)
Interm. Gv't Bond 357,759 (1,915,421) (1,557,662)
Money Market -- -- --
6. YEAR 2000 (UNAUDITED)
VMF, VSA and NAS have developed and implemented a plan to address issues related
to the Year 2000. The problem relates to many existing computer systems using
only two digits to identify a year in a date field. These systems were designed
and developed without considering the impact of the upcoming change in the
century. If not corrected, many computer systems could fail or create erroneous
results when processing information dated after December 31, 1999. VMF, VSA and
NAS have completed an inventory and assessment of all computer systems and have
implemented a plan to renovate or replace all applications that were identified
as not Year 2000 compliant. VMF, VSA and NAS have also tested each application
for its Year 2000 Compliance.
Systems supporting the Fund's infrastructure, such as telecommunica- tions,
voice and networks, have also been tested, renovated or replaced, and are
compliant. VMF's, VSA's and NAS' assessment of Year 2000 issues has also
included non-information technology systems with embedded computer chips.
In addition to resolving internal Year 2000 readiness issues, VMF, VSA and NAS
are surveying significant external organizations (business part- ners) to assess
if they will be Year 2000 compliant. VMF, VSA and NAS continue their efforts to
identify external risk factors and have developed contingency plans as part of
its ongoing risk-management strategy.
7. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For corporate shareholders, 100% of the Growth Fund and 100% of the Fund income
dividends and short-term capital gain distributions in the fiscal year ended
October 31, 1999, qualify for the corporate dividend received deduction.
All of the distributions paid by the Tax-Free Income Fund during the fiscal year
ended October 31, 1999, are exempt from federal income tax.
58 NATIONWIDE
<PAGE> 61
(This Page Intentionally Left Blank.)
<PAGE> 62
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NATIONWIDE MUTUAL FUNDS
We have audited the accompanying statements of assets and liabilities of the
Nationwide Mutual Funds (comprised of Nationwide Mid Cap Growth Fund, Nationwide
Growth Fund, Nationwide Fund, Nationwide Bond Fund, Nationwide Tax-Free Income
Fund, Nationwide Long-Term U.S. Government Bond Fund, Nationwide Intermediate
U.S. Government Bond Fund, and Nationwide Money Market Fund) (collectively, the
Funds), including the statements of investments, as of October 31, 1999, and the
related statements of operations for the year then ended, the statement of
changes in net assets for the years in the two-year period then ended, and the
financial highlights for each of the periods indicated herein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999, by correspondence with custodians and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Funds as of October 31, 1999, the results of their operations for the year then
ended, the changes in their net assets for the years in the two-year period then
ended, and financial highlights for the periods indicated herein, in conformity
with generally accepted accounting principles.
KPMG LLP
COLUMBUS, OHIO
DECEMBER 17, 1999
NATIONWIDE 59
<PAGE> 63
- --------------------------------------------------------------------------------
TRUSTEES
Dimon R. McFerson Sue A. Doody Douglas F. Kridler
Chairman Columbus, Ohio Columbus, Ohio
Columbus, Ohio
Robert M. Duncan Nancy C. Thomas
Dr. John C. Bryant Columbus, Ohio Louisville, Ohio
Cincinnati, Ohio
Dr. Thomas J. Kerr, IV David C. Wetmore
Dr. C. Brent DeVore Westerville, Ohio Reston, Virginia
Westerville, Ohio
- --------------------------------------------------------------------------------
OFFICERS
<TABLE>
<CAPTION>
<S> <C>
James F. Laird, Jr. - Treasurer CUSTODIAN
Elizabeth A. Davin - Secretary The Fifth Third Bank
Patricia J. Smith - Assistant Secretary 38 Fountain Square Plaza
Charles S. Bath - Assistant Treasurer Cincinnati, Ohio 45263-0001
Craig A. Carver - Assistant Treasurer
Scott A. Englehart - Assistant Treasurer LEGAL COUNSEL
H. Carl Juckett - Assistant Treasurer Dietrich, Reynolds & Koogler
Edwin P. McCausland, Jr. - Assistant Treasurer One Nationwide Plaza
Karen R. Tackett - Assistant Treasurer Columbus, Ohio 43215-2220
TRANSFER AGENT INDEPENDENT AUDITORS
Nationwide Investors Services, Inc. KPMG LLP
P.O. Box 1492 Two Nationwide Plaza
Columbus, Ohio 43216-1492 Columbus, Ohio 43215-2537
DISTRIBUTOR
Nationwide Advisory Services, Inc.
Three Nationwide Plaza
Columbus, Ohio 43215-2220
</TABLE>
- --------------------------------------------------------------------------------
ABOUT PERFORMANCE+
The performance of the funds, as reflected on pages 2-28, includes performance
of their respective predecessor funds prior to reorganization. In addition, the
performance of the class A and B shares prior to such date has been restated for
sales charges but not for fees applicable to class A and B. The reorganization
of the funds took place on May 11, 1998.
The predecessor to the Mid Cap Growth Fund was the Financial Horizons Investment
Trust Growth Fund.
The predecessor to the Long-Term U.S. Government Bond Fund was the Financial
Horizons Investment Trust Government Bond Fund.
The Nationwide Investing Foundation III funds were preceded by funds of the
Nationwide Investing Foundation or Nationwide Investing Foundation II.
Inception-to-date class-specific total returns can be found in the Financial
Highlights, which start on page 39.
- --------------------------------------------------------------------------------
This report is for the information of shareholders of the Nationwide(R) Family
of Funds. It may be used as sales literature only when preceded or accompanied
by a current prospectus, which gives further details about the funds.
Nationwide(R) is a registered Federal Service mark of Nationwide Mutual
Insurance Company.
<PAGE> 64
Nationwide(R)
Family of Funds
offered by Villanova Capital through Nationwide Advisory Services
[PICTURE]
Three Nationwide Plaza
Columbus, OH 43215-2220
Toll-Free Telephone Assistance - General Account Service and Exchanges:
1-800-848-0920
NAS NOW - Fund Information Available 24 Hours a Day, Seven Days a Week:
1-800-637-0012
Internet Site - www.nationwidefunds.com
NATIONWIDE FAMILY OF FUNDS BULK RATE
THREE NATIONWIDE PLAZA U.S. POSTAGE
COLUMBUS, OHIO 43215-2220 PAID
CLEVELAND, OH
OCTOBER 1999 PERMIT NO. 1702
ANNUAL REPORT
HS-402-N
