<PAGE> 1
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NATIONWIDE(R) S&P 500 INDEX FUND
ANNUAL REPORT
OCTOBER 31, 1999
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<PAGE> 2
NATIONWIDE(R) S&P 500 INDEX FUND*
ANNUAL REPORT
OCTOBER 31, 1999
TABLE OF CONTENTS
<TABLE>
<S> <C>
Management Discussion of Fund Performance................... 3
Statement of Investments.................................... 4
Statement of Assets and Liabilities......................... 11
Statement of Operations..................................... 12
Statement of Changes in Net Assets.......................... 13
Financial Highlights........................................ 14
Notes to Financial Statements............................... 15
Independent Auditors' Report................................ 20
</TABLE>
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* "Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500", and
"500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for use by the Fund. The Fund is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation regarding the
advisability of investing in the Fund. For further information regarding the
trademark licenses, see the Statement of Additional Information.
<PAGE> 3
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Nationwide S&P 500 Index Fund, Local Fund Shares for
the 12-month period ended October 31, 1999 was 24.85%* compared to 25.67% for
the Fund's benchmark, the S&P 500 Index.
The Fund is designed to passively replicate the large capitalization U.S. equity
market as represented by the S&P 500 Index.
Large capitalization stocks had positive performance for the fiscal year 1999,
outperforming stocks in both the middle capitalization range and in the small
capitalization range.
Among the best performing groups for the fiscal year ended October 31, 1999 were
stocks of semiconductor companies, communication equipment companies,
broadcast/media companies and electrical instrument companies. The Nationwide
S&P 500 Index Fund holds its stocks in direct proportion to their weight in the
index and therefore benefited from their good performance.
- ---------------
* Assuming all distributions are reinvested. Local Fund Shares are not subject
to a front-end sales charge.
PORTFOLIO COMPOSITION
(SUBJECT TO CHANGE)
<TABLE>
- --------------------------------------
<S> <C>
Repurchase Agreement 0.8%
- --------------------------------------
S&P 500 Receipts 2.2%
- --------------------------------------
Preferred Stock 0.1%
- --------------------------------------
Common Stock 97.4%
- --------------------------------------
</TABLE>
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN
(For Period Ended October 31, 1999)
<TABLE>
<CAPTION>
YEARS CLASS R CLASS Y LOCAL
<S> <C> <C> <C>
- --------------------------------------
Life** 24.27% 24.64% 16.21%
1 N/A N/A 24.85%
- --------------------------------------
</TABLE>
Past performance is no guarantee of future results.
** Class R and Y Shares were first offered to the public on November 2, 1998.
Local Fund Shares were first offered to the public on July 24, 1998.
<TABLE>
<CAPTION>
CLASS R CLASS Y LOCAL S&P 500
------- ------- ----- -------
<S> <C> <C> <C> <C>
7/98 10000.00 10000.00 10000.00 10000.00
1998 10000.00 10000.00 9692.00 10000.00
1999 12567.00 12040.00 12101.00 12567.00
</TABLE>
Comparative performance of $10,000 invested in the Nationwide S&P 500 Index Fund
and the S&P 500*** since inception (7/24/98) to 10/31/99. Unlike our Fund, the
S&P 500 does not reflect any fees or expenses.
*** The S&P 500 is a capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy. All major industries are
represented in the S&P 500.
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 3
<PAGE> 4
NATIONWIDE (R) S&P 500 INDEX FUND
STATEMENT OF INVESTMENTS -- OCTOBER 31, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- AFFILIATED (0.1%)
FINANCIAL / BANKS (0.2%)
5,300 Mellon Financial Corp.
TOTAL COMMON STOCK -- AFFILIATED
(cost $180,984) $ 195,769
-----------
COMMON STOCK -- UNAFFILIATED (97.3%)
AEROSPACE (0.8%)
10,000 Boeing Co. (The) 460,625
2,100 General Dynamics Corp. 116,419
1,100 Goodrich (B.F.) Co. 26,056
4,100 Lockheed Martin Corp. 82,000
5,000 United Technologies Corp. 302,500
-----------
987,600
-----------
AIRLINES (0.3%)
1,600 AMR Corp.* 101,600
1,500 Delta Air Lines, Inc. 81,656
3,100 Federal Express Corp.* 133,494
5,275 Southwest Airlines 88,686
700 U.S. Airways Group, Inc.* 19,600
-----------
425,036
-----------
ALUMINUM (0.3%)
2,300 Alcan Aluminium Ltd. 75,756
3,800 Alcoa, Inc. 230,850
700 Reynolds Metals Co. 42,306
-----------
348,912
-----------
APPAREL (0.2%)
600 Liz Claiborne, Inc. 24,000
2,900 Nike, Inc. Class B 163,669
600 Reebok International Ltd.* 5,888
300 Russell Corp. 4,556
1,200 V.F. Corp. 36,075
-----------
234,188
-----------
BEVERAGES / ALCOHOLIC (0.6%)
400 Adolph Coors Co. Class B 22,200
4,900 Anheuser-Busch Cos., Inc. 351,881
700 Brown-Forman Corp. Class B 47,250
1,700 Fortune Brands, Inc. 60,244
4,500 Seagram Co. Ltd. 222,188
-----------
703,763
-----------
BEVERAGES / SOFT DRINK (1.8%)
25,700 Coca-Cola Co. 1,516,300
4,400 Coca-Cola Enterprises, Inc. 112,475
15,200 PepsiCo, Inc. 527,250
-----------
2,156,025
-----------
BROADCAST MEDIA / CABLE TELEVISION (2.3%)
7,300 CBS Corp. 356,331
3,500 Clear Channel Communications,
Inc.* 281,312
7,800 Comcast Corp. Special Class A 328,575
1,800 General Instrument Corp.* 96,863
700 King World Productions, Inc.* 27,125
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
BROADCAST MEDIA / CABLE TELEVISION
(CONTINUED)
6,300 MediaOne Group, Inc.* $ 447,694
13,500 Time Warner, Inc. 940,781
7,200 Viacom, Inc. Class B* 322,200
-----------
2,800,881
-----------
BUSINESS EQUIPMENT & SERVICES (0.8%)
3,700 3COM Corp.* 107,300
17,700 Compaq Computer Corp. 336,300
3,700 Compuware Corp.* 102,906
1,600 IKON Office Solutions, Inc. 11,000
3,800 Office Depot, Inc.* 47,263
2,800 Pitney Bowes, Inc. 127,575
2,000 Silicon Graphics, Inc.* 15,500
6,900 Xerox Corp. 193,200
-----------
941,044
-----------
CAPITAL GOODS (6.4%)
3,900 Applied Materials, Inc.* 350,269
200 Briggs & Stratton 11,687
800 Case Corp. 42,400
3,700 Caterpillar, Inc. 204,425
750 Crane Co. 15,328
400 Cummins Engine, Inc. 20,275
2,400 Deere & Co. 87,000
2,200 Dover Corp. 93,637
800 Eaton Corp. 60,200
4,500 Emerson Electric Co. 270,281
34,100 General Electric Co. 4,622,681
1,900 Genuine Parts Co. 49,519
1,000 Grainger (W.W.), Inc. 42,375
2,600 Illinois Tool Works, Inc. 190,450
1,700 Ingersoll-Rand Co. 88,825
900 ITT Industries, Inc. 30,769
600 McDermott International, Inc. 10,875
400 Milacron, Inc. 6,575
500 Millipore Corp. 15,937
4,200 Minnesota Mining & Manufacturing
Co. 399,262
100 NACCO Industries, Inc. Class A 4,637
1,300 Pall Corp. 28,519
1,100 Parker-Hannifin Corp. 50,394
1,100 PE Corp. -- PE Biosystems Group 71,363
500 PerkinElmer, Inc.* 20,406
700 Snap-on, Inc. 21,262
900 Stanley Works (The) 24,975
1,600 Textron, Inc. 123,500
1,500 Thermo Electron Corp.* 20,250
600 Timken Co. (The) 10,763
17,472 Tyco International Ltd. 697,788
-----------
7,686,627
-----------
CHEMICALS (1.9%)
2,400 Air Products & Chemicals, Inc. 66,000
5,700 Allied-Signal, Inc. 324,544
1,200 Avery Dennison Corp. 75,000
2,300 Dow Chemical Co. 271,975
</TABLE>
4 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 5
NATIONWIDE (R) S&P 500 INDEX FUND
STATEMENT OF INVESTMENTS -- OCTOBER 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
CHEMICALS (CONTINUED)
10,850 Du Pont (E.I.) De Nemours & Co. $ 699,147
800 Eastman Chemical Co. 30,850
1,300 Engelhard Corp. 22,912
300 FMC Corp.* 12,206
700 Grace (W.R.) & Co.* 10,456
600 Great Lakes Chemical Corp. 21,300
1,100 Hercules, Inc. 26,469
6,600 Monsanto Co. 254,100
3,600 Occidental Petroleum Corp. 82,125
1,800 PPG Industries, Inc. 109,125
1,700 Praxair, Inc. 79,475
2,231 Rohm & Haas Co. 85,336
1,000 Sigma-Aldrich Corp. 28,500
1,400 Union Carbide Corp. 85,400
-----------
2,284,920
-----------
COMMUNICATION EQUIPMENT (0.1%)
700 Comverse Technology, Inc. 79,450
-----------
COMPUTER EQUIPMENT (4.7%)
1,100 Adaptec, Inc.* 49,500
26,400 Dell Computer Corp.* 1,059,300
10,500 EMC Corp.* 766,500
3,300 Gateway, Inc.* 218,006
10,500 Hewlett-Packard Co. 777,656
18,800 International Business Machines
Corp. 1,849,450
1,300 Lexmark International Group,
Inc.* 101,481
800 Network Appliance, Inc.* 59,200
8,000 Sun Microsystems, Inc.* 846,500
-----------
5,727,593
-----------
COMPUTER SOFTWARE & SERVICES (7.0%)
1,700 Apple Computer, Inc.* 136,212
6,400 Automatic Data Processing, Inc. 308,400
2,500 BMC Software, Inc.* 160,469
1,800 Cabletron System, Inc.* 29,813
33,800 Cisco Systems, Inc.* 2,501,200
4,500 First Data Corp. 205,594
53,100 Microsoft Corp.* 4,915,069
2,300 Seagate Technology* 67,706
3,200 Unisys Corp.* 77,600
-----------
8,402,063
-----------
CONSTRUCTION & BUILDING MATERIALS (0.2%)
400 Armstrong World Industries, Inc. 14,950
600 Centex Corp. 16,087
800 Fluor Corp. 31,900
400 Foster Wheeler Corp. 4,500
500 Kaufman & Broad Home Corp. 10,031
4,600 Masco Corp. 140,300
600 Owens Corning 12,300
1,800 Sherwin Williams Co. 40,275
1,000 Vulcan Materials Co. 41,313
-----------
311,656
-----------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
CONSUMER DURABLES (0.2%)
900 Black & Decker Corp. $ 38,700
1,500 Danaher Corp. 72,469
900 Maytag Corp. 36,056
800 Whirlpool Corp. 55,750
-----------
202,975
-----------
CONSUMER NON-CYCLICAL (2.5%)
2,700 Avon Products, Inc. 87,075
2,500 Clorox Co. (The) 102,344
6,100 Colgate-Palmolive Co. 369,050
1,300 Ecolab, Inc. 43,956
11,300 Gillette Co. (The) 408,919
1,100 International Flavor and
Fragrances 42,075
5,500 Kimberly Clark Corp. 347,187
400 National Service Industries,
Inc. 12,900
2,951 Newell Rubbermaid, Inc. 102,178
13,800 Procter & Gamble Co. 1,447,275
600 Tupperware Corp. 11,888
-----------
2,974,847
-----------
CONTAINERS (0.2%)
300 Ball Corp. 12,094
500 Bemis, Inc. 17,469
1,300 Crown Cork & Seal Co., Inc. 31,119
1,600 Owens-Illinois, Inc.* 38,300
900 Sealed Air Corp.* 49,837
600 Temple-Inland, Inc. 34,875
1,800 Tenneco, Inc. 28,800
-----------
212,494
-----------
DISTRIBUTION (0.1%)
2,881 McKesson HBOC, Inc. 57,800
-----------
DRUGS (7.4%)
700 Allergan, Inc. 75,162
1,100 ALZA Corp.* 47,094
13,600 American Home Products Corp. 710,600
5,300 Amgen, Inc. 422,675
20,700 Bristol-Meyers Squibb Co. 1,590,019
11,400 Eli Lilly & Co. 785,175
24,400 Merck & Co., Inc. 1,941,325
40,300 Pfizer, Inc. 1,591,850
5,300 Pharmacia & Upjohn, Inc. 285,869
15,300 Schering-Plough Corp. 757,350
8,900 Warner-Lambert Co. 710,331
1,000 Watson Pharmaceuticals, Inc.* 31,750
-----------
8,949,200
-----------
ELECTRONICS (5.3%)
1,500 Advanced Micro Devices, Inc.* 29,719
1,800 Analog Devices, Inc.* 95,625
800 Andrew Corp.* 10,300
1,000 Cooper Industries, Inc. 43,062
800 Harris Corp. 17,950
1,300 Honeywell, Inc. 137,069
34,400 Intel Corp. 2,663,850
</TABLE>
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 5
<PAGE> 6
NATIONWIDE (R) S&P 500 INDEX FUND
STATEMENT OF INVESTMENTS -- OCTOBER 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
ELECTRONICS (CONTINUED)
900 KLA-Tencor Corp.* $ 71,269
1,500 LSI Logic Corp.* 79,781
2,600 Micron Technology, Inc.* 185,412
6,300 Motorola, Inc. 613,856
1,700 National Semiconductor Corp.* 50,894
13,800 Nortel Networks Corp. 854,737
700 Northrop Grumman Corp. 38,413
3,500 Raytheon Co. 101,938
2,000 Rockwell International Corp. 96,875
800 Scientific-Atlanta, Inc. 45,800
2,800 Solectron Corp.* 210,700
500 Tektronix, Inc. 16,875
4,100 Tellabs, Inc.* 259,325
8,200 Texas Instruments, Inc. 735,950
600 Thomas & Betts Corp. 26,925
-----------
6,386,325
-----------
ENTERTAINMENT (0.5%)
21,400 Walt Disney Co. (The) 564,425
-----------
FINANCIAL / BANKS (5.9%)
4,100 AmSouth Bancorp 105,575
17,923 Bank of America Corp. 1,153,793
7,600 Bank of New York Co., Inc. 318,250
12,234 Bank One Corp. 459,540
3,300 BB&T Corp. 120,037
8,700 Chase Manhattan Corp. (The) 760,162
1,600 Comerica, Inc. 95,100
2,800 Fifth Third Bancorp 206,675
9,900 First Union Corp. 422,606
10,227 Firstar Corp. 300,418
9,616 Fleet Boston Corp. 419,498
2,440 Huntington Bancshares, Inc. 72,285
4,700 Keycorp 131,306
6,400 National City Corp. 188,800
1,200 Northern Trust Corp. 115,875
3,200 PNC Bank Corp. 190,800
2,300 Regions Financial Corp. 69,144
1,100 Republic New York Corp. 69,506
1,700 SouthTrust Corp. 68,000
1,700 State Street Corp. 129,413
1,800 Summit Bancorp 62,325
3,300 Suntrust Banks, Inc. 241,519
2,800 Synovus Financial Corp. 60,025
7,600 U.S. Bancorp Class A 281,675
1,500 Union Planters Corp. 66,750
2,100 Wachovia Corp. 181,125
17,200 Wells Fargo Co. 823,450
-----------
7,113,652
-----------
FINANCIAL / MISCELLANEOUS (5.7%)
4,700 American Express Co. 723,800
7,600 Associates First Capital Corp. 277,400
1,220 Bear Stearns Cos., Inc. 52,002
2,100 Capital One Financial Corp. 111,300
1,200 Countrywide Credit Industries,
Inc. 40,725
35,075 Citigroup, Inc. 1,898,434
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
FINANCIAL / MISCELLANEOUS (CONTINUED)
10,700 Fannie Mae $ 757,025
7,200 Freddie Mac 389,250
2,600 Franklin Resources, Inc. 91,000
600 Golden West Financial Corp. 67,050
5,000 Household International, Inc. 223,125
1,200 Lehman Brothers Holding, Inc. 88,425
8,350 MBNA Corp. 230,669
3,800 Merrill Lynch & Co., Inc. 298,300
1,800 Morgan (J.P.) & Co., Inc. 235,575
5,900 Morgan Stanley Dean Witter & Co. 650,844
1,500 Paine Webber Group, Inc. 61,125
1,300 Price, T Rowe Associates, Inc. 46,150
8,500 Schwab (Charles) Corp. (The) 330,969
1,700 Student Loan Market Association 83,194
6,004 Washington Mutual, Inc. 215,769
-----------
6,872,131
-----------
FOOD & RELATED (2.3%)
6,413 Archer-Daniels-Midland Co. 78,960
2,900 BestFoods, Inc. 170,375
4,500 Campbell Soup Co. 202,500
5,100 ConAgra, Inc. 132,919
1,600 General Mills 139,500
3,700 Heinz (H.J.) Co. 176,675
1,500 Hershey Foods Corp. 75,750
4,200 Kellogg Co. 167,212
3,400 Nabisco Group Holdings Corp. 43,562
24,900 Philip Morris Cos., Inc. 627,169
1,400 Quaker Oats Co. 98,000
3,400 Ralston-Ralston Purina Group 106,888
9,400 Sara Lee Corp. 254,387
5,914 Unilever NV 394,390
1,200 Wrigley (Wm.) Jr., Co. 95,925
-----------
2,764,212
-----------
FURNITURE / FURNISHINGS (0.1%)
2,000 Leggett & Platt, Inc. 44,375
-----------
GOLD (0.2%)
4,100 Barrick Gold Corp. 75,081
1,700 Freeport-McMoRan Copper & Gold,
Inc. 28,369
2,700 Homestake Mining 22,612
1,700 Newmont Mining Corp. 37,294
3,400 Placer Dome, Inc. 41,225
-----------
204,581
-----------
HEALTH CARE (3.0%)
15,800 Abbott Laboratories 637,925
500 Bard (C.R.), Inc. 26,969
600 Bausch & Lomb, Inc. 32,400
3,000 Baxter International, Inc. 194,625
2,600 Becton, Dickinson & Co. 65,975
1,200 Biomet, Inc. 36,150
4,300 Boston Scientific Corp.* 86,537
2,800 Cardinal Health, Inc. 120,750
5,900 Columbia/HCA Healthcare Corp. 142,337
</TABLE>
6 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 7
NATIONWIDE (R) S&P 500 INDEX FUND
STATEMENT OF INVESTMENTS -- OCTOBER 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
HEALTH CARE (CONTINUED)
3,100 Guidant Corp. $ 153,062
4,300 HealthSouth Corp.* 24,725
1,700 Humana, Inc.* 11,688
14,000 Johnson & Johnson Co. 1,466,500
700 Mallinckrodt, Inc. 23,756
1,100 Manor Care, Inc.* 17,325
12,200 Medtronic, Inc. 422,425
900 St. Jude Medical, Inc.* 24,638
3,200 Tenet Healthcare Corp.* 62,200
1,800 United HealthCare Corp. 93,038
700 Wellpoint Health Networks, Inc.* 40,600
-----------
3,683,625
-----------
HOME BUILDING (0.1%)
400 Pulte Corp. 8,050
-----------
HOTELS / MOTELS (0.1%)
2,600 Hilton Hotels Corp. 24,050
2,600 Marriott International, Inc.
Class A 87,588
2,100 Mirage Resorts, Inc.* 30,581
-----------
142,219
-----------
INSURANCE (2.3%)
8,300 Allstate Corp. 238,625
16,103 American International Group,
Inc. 1,657,602
2,650 AON Corp. 94,075
1,800 Chubb Corp. 98,775
1,700 Cincinnati Financial Corp. 60,881
2,300 Hartford Financial Services
Group 119,169
1,100 Loews Corp. 77,963
1,000 MBIA, Inc. 57,063
1,100 MGIC Investment Corp. 65,725
800 Progressive Corp. (The) 74,050
1,400 SAFECO Corp. 38,500
2,400 St. Paul Cos., Inc. 76,800
2,457 UNUM Corp. 80,927
-----------
2,740,155
-----------
INSURANCE / LIFE (0.9%)
1,500 Aetna, Inc. 75,375
2,800 AFLAC, Inc. 143,150
2,600 American General Corp. 192,887
2,100 CIGNA Corp. 156,975
3,400 Conseco, Inc. 82,662
1,100 Jefferson-Pilot Corp. 82,569
2,100 Lincoln National Corp. 96,863
1,500 Providian Corp. 163,500
1,400 Torchmark Corp. 43,663
-----------
1,037,644
-----------
LEISURE PRODUCTS (0.3%)
1,000 Brunswick Corp. 22,625
6,400 Carnival Corp. 284,800
2,000 Hasbro, Inc. 41,250
4,400 Mattel, Inc. 58,850
-----------
407,525
-----------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
METALS (0.1%)
2,000 Inco Ltd. $ 40,500
908 Phelps Dodge Corp. 51,189
-----------
91,689
-----------
MOTOR VEHICLES (1.2%)
1,700 Dana Corp. 50,256
5,895 Delphi Automotive Systems Corp. 96,899
300 Fleetwood Enterprises, Inc. 6,544
12,600 Ford Motor Co. 691,425
6,700 General Motors Corp. 470,675
900 Johnson Controls, Inc. 54,675
700 Navistar International Corp.* 29,181
800 PACCAR, Inc. 37,700
1,300 TRW, Inc. 55,738
-----------
1,493,093
-----------
NATURAL GAS (0.7%)
900 Columbia Energy Group 58,500
1,000 Consolidated Natural Gas Co. 64,000
300 Eastern Enterprises 15,337
2,300 El Paso Energy Corp. 94,300
7,400 Enron Corp. 295,538
1,200 New Century Energies, Inc. 39,075
500 NICOR, Inc. 19,375
300 ONEOK, Inc. 8,756
400 People's Energy Corp. 15,200
2,500 Sempra Energy 51,094
4,500 Williams Cos., Inc. (The) 168,750
-----------
829,925
-----------
OIL & GAS / EXPLORATION & PRODUCTION (1.5%)
900 Amerada Hess Corp. 51,638
800 Ashland, Inc. 26,400
2,200 Coastal Corp. (The) 92,675
6,507 Conoco, Inc. Class B 176,502
22,300 Royal Dutch Petroleum Co. 1,336,606
900 Sunoco, Inc. 21,713
3,200 USX -- Marathon Group 93,200
-----------
1,798,734
-----------
OIL / DOMESTIC (0.6%)
1,300 Anadarko Petroleum Corp. 40,056
1,200 Apache Corp. 46,800
3,400 Atlantic Richfield Co. 316,838
1,800 Burlington Resources, Inc. 62,775
884 Kerr-Mcgee Corp. 47,515
2,600 Phillips Petroleum Co. 120,900
1,600 Tosco Corp. 40,500
2,600 Union Pacific Resources Group,
Inc. 37,700
-----------
713,084
-----------
OIL / INTERNATIONAL (3.1%)
6,800 Chevron Corp. 620,925
25,200 Exxon Corp. 1,866,375
8,100 Mobil Corp. 781,650
</TABLE>
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 7
<PAGE> 8
NATIONWIDE (R) S&P 500 INDEX FUND
STATEMENT OF INVESTMENTS -- OCTOBER 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
OIL / INTERNATIONAL (CONTINUED)
5,700 Texaco, Inc. $ 349,838
2,500 Unocal Corp. 86,250
-----------
3,705,038
-----------
OIL EQUIPMENT & SERVICES (0.5%)
3,470 Baker Hughes, Inc. 96,943
4,600 Halliburton Co. 173,363
500 Helmerich & Payne, Inc. 11,906
900 Rowan Cos.* 14,006
5,700 Schlumberger Ltd. 345,206
-----------
641,424
-----------
PAPER & FOREST PRODUCTS (0.6%)
600 Boise Cascade Corp. 21,375
1,000 Champion International Corp. 57,812
2,300 Fort James Corp. 60,519
1,800 Georgia Pacific Corp. 71,437
4,294 International Paper Co. 225,972
1,100 Louisiana-Pacific Corp. 13,956
1,100 Mead Corp. 39,600
300 Potlatch Corp. 12,656
1,000 Westvaco Corp. 29,688
2,100 Weyerhauser Co. 125,344
1,200 Willamette Industries, Inc. 49,875
-----------
708,234
-----------
PHOTOGRAPHIC (0.2%)
3,300 Eastman Kodak Co. 227,494
500 Polaroid Corp. 11,156
-----------
238,650
-----------
POLLUTION CONTROL (0.1%)
2,000 Allied Waste Industries, Inc.* 21,000
6,400 Waste Management, Inc. 117,600
-----------
138,600
-----------
PRINTING & PUBLISHING (0.7%)
700 American Greetings Corp. Class A 18,112
1,300 Donnelley (R.R.) & Sons Co. 31,525
900 Dow Jones & Co., Inc. 55,350
2,900 Gannett Co., Inc. 223,663
700 Harcourt General, Inc. 26,950
400 Jostens, Inc. 8,450
800 Knight-Ridder, Inc. 50,800
2,000 McGraw-Hill Cos., Inc. 119,250
500 Meredith Corp. 17,844
1,800 New York Times Co. (The) Class A 72,450
600 Times Mirror Co. (The) 43,275
2,500 Tribune Co. 150,000
-----------
817,669
-----------
RAILROADS (0.5%)
4,800 Burlington Northern Santa Fe
Corp. 153,000
2,300 CSX Corp. 94,300
1,100 Kansas City Southern Industries,
Inc. 52,181
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
RAILROADS (CONTINUED)
3,200 Laidlaw, Inc. $ 19,600
4,000 Norfolk Southern Corp. 97,750
2,600 Union Pacific Corp. 144,950
-----------
561,781
-----------
RESTAURANTS (0.6%)
1,400 Darden Restaurants, Inc. 26,687
1,300 Harrah's Entertainment, Inc.* 37,619
14,100 McDonald's Corp. 581,625
1,600 Tricon Global Restaurants, Inc.* 64,300
1,300 Wendy's International, Inc. 31,038
-----------
741,269
-----------
RETAIL (5.6%)
1,500 Autozone, Inc.* 39,844
1,500 Bed, Bath and Beyond, Inc.* 49,969
2,100 Best Buy Co., Inc.* 116,681
2,100 Circuit City Stores-Circuit City
Group 89,644
1,100 Consolidated Stores Corp.* 20,144
2,300 Costco Wholesale Corp.* 184,719
4,100 CVS Corp. 178,094
4,600 Dayton Hudson Corp. 297,275
1,100 Dillard's, Inc. 20,762
2,368 Dollar General Corp. 62,456
2,200 Federated Department Stores,
Inc.* 93,912
8,900 Gap, Inc. 330,412
15,400 Home Depot, Inc. 1,162,700
5,000 Kmart Corp.* 50,312
1,700 Kohls Corp.* 127,181
2,200 Limited, Inc. (The) 90,475
400 Longs Drug Stores Corp. 10,900
4,000 Lowe's Cos., Inc. 220,000
3,500 May Department Stores Co. 121,406
1,500 Nordstrom, Inc. 37,406
2,700 Penney (J.C.) Co., Inc. 68,513
500 Pep Boys -- Manny, Moe & Jack
(The) 6,250
2,700 Rite Aid Corp. 23,625
4,000 Sears, Roebuck & Co. 112,750
4,800 Staples, Inc.* 106,500
2,000 Tandy Corp. 125,875
3,300 TJX Cos., Inc. 89,513
2,600 Toys 'R' Us, Inc.* 36,725
10,400 Walgreen Co. 261,950
46,300 Wal-Mart Stores, Inc. 2,644,888
-----------
6,780,881
-----------
RETAIL / FOOD & DRUG (0.6%)
4,334 Albertson's, Inc. 157,378
400 Great Atlantic & Pacific Tea
Co., Inc. (The) 11,425
8,600 Kroger Co.* 178,987
5,300 Safeway, Inc.* 187,156
1,400 Supervalu, Inc. 29,400
</TABLE>
8 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 9
NATIONWIDE (R) S&P 500 INDEX FUND
STATEMENT OF INVESTMENTS -- OCTOBER 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
RETAIL / FOOD & DRUG (CONTINUED)
3,400 SYSCO Corp. $ 130,688
1,500 Winn-Dixie Stores, Inc. 40,594
-----------
735,628
-----------
SERVICES (3.8%)
1,200 Adobe Systems, Inc. 83,925
11,500 America Online, Inc. 1,491,406
600 Autodesk, Inc. 11,250
7,500 Cendant Corp.* 123,750
1,500 Ceridian Corp.* 32,906
5,600 Computer Associates
International, Inc. 316,400
1,700 Computer Sciences Corp.* 116,769
800 Deluxe Corp. 22,600
1,700 Dun & Bradstreet Corp. (The) 49,937
5,100 Electronic Data Systems Corp. 298,350
1,500 Equifax, Inc. 40,500
1,000 H&R Block, Inc. 42,562
3,300 IMS Health, Inc. 95,700
2,900 Interpublic Group Cos., Inc. 117,813
2,700 Marsh & McLennan Cos., Inc. 213,469
3,500 Novell, Inc.* 70,219
1,800 Omnicom Group 158,400
15,000 Oracle Corp.* 713,438
2,800 Parametric Technology* 53,375
2,550 Paychex, Inc. 100,406
2,500 Peoplesoft, Inc.* 37,500
1,700 QUALCOMM, Inc.* 378,675
700 Ryder System, Inc. 14,963
2,800 Service Corp. International 26,775
300 Shared Medical Systems Corp. 11,325
-----------
4,622,413
-----------
STEEL (0.1%)
2,000 Allegheny Teledyne, Inc. 30,375
1,200 Bethlehem Steel Corp.* 8,325
900 Nucor Corp. 46,688
900 USX-U.S. Steel Group, Inc. 23,006
1,000 Worthington Industries, Inc. 16,625
-----------
125,019
-----------
TELECOMMUNICATIONS (10.2%)
1,600 ADC Telecommunications, Inc.* 76,300
3,200 Alltel Corp. 266,400
33,224 AT&T Corp. 1,553,222
16,100 Bell Atlantic Corp. 1,045,494
19,600 Bellsouth Corp. 882,000
1,500 CenturyTel, Inc. 60,656
2,500 Corning, Inc. 196,562
7,985 Global Crossing Ltd.* 276,481
10,200 GTE Corp. 765,000
31,875 Lucent Technologies, Inc. 2,047,969
19,463 MCI WorldCom, Inc.* 1,670,169
3,400 Nextel Communications, Inc.* 293,037
35,512 SBC Communications, Inc. 1,808,892
9,000 Sprint Corp. (FON Group) 668,813
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS (CONTINUED)
4,550 Sprint Corp. (PCS Group)* $ 377,366
5,200 U.S. West Communications Group 317,525
-----------
12,305,886
-----------
TEXTILES (0.1%)
200 Springs Industries, Inc. Class A 7,962
-----------
TIRE & RUBBER (0.1%)
800 Cooper Tire & Rubber Co. 13,450
1,600 Goodyear Tire & Rubber Co. 66,100
-----------
79,550
-----------
TOBACCO (0.1%)
1,800 UST, Inc. 49,837
-----------
UTILITIES / ELECTRIC (1.9%)
2,100 AES Corp.* 118,519
1,400 Ameren Corp. 52,937
2,000 American Electric Power Co.,
Inc. 69,000
1,700 Carolina Power & Light Co. 58,650
2,200 Central & Southwest Corp. 48,812
1,700 Cinergy Corp. 48,025
1,200 CMS Energy Corp. 44,250
2,300 Consolidated Edison, Inc. 87,831
1,600 Constellation Energy Group, Inc. 49,100
2,000 Dominion Resources, Inc. 96,250
1,500 DTE Energy Co. 49,781
3,800 Duke Power Co. 214,700
3,600 Edison International 106,650
2,600 Entergy Corp. 77,837
2,400 FirstEnergy Corp. 62,550
1,000 Florida Progress Corp. 45,812
1,900 FPL Group, Inc. 95,594
1,300 GPU, Inc. 44,119
1,900 Niagara Mohawk Holdings, Inc.* 30,163
1,600 Northern States Power Co. 34,400
3,100 PacificCorp 63,938
1,900 PECO Energy Co. 72,556
4,000 PG&E Corp. 91,750
900 Pinnacle West Capital Corp. 33,188
1,600 PP&L Resources, Inc. 43,300
2,300 Public Service Enterprise Group,
Inc. 90,994
3,100 Reliant Energy, Inc. 84,475
7,100 Southern Co. 188,594
2,900 Texas Utilities Co. 112,375
2,300 Unicom Corp. 88,119
-----------
2,304,269
TOTAL COMMON
STOCK -- UNAFFILIATED (cost
$109,030,942) $116,946,628
-----------
PREFERRED STOCK (0.1%)
CONSUMER NON DURABLE (0.1%)
600 Alberto Culver Co. Class B
Total Preferred Stock
(cost $15,482) 14,138
-----------
</TABLE>
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 9
<PAGE> 10
NATIONWIDE (R) S&P 500 INDEX FUND
STATEMENT OF INVESTMENTS -- OCTOBER 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
PRINCIPAL SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.8%)
$966,000 Fifth Third Bank 5.06%,
11/01/99, Collateralized by
$986,000 FHLMC Gold Pool
#E00570, 6.00%, 09/01/13,
market value $986,000 (cost
$966,000) $ 966,000
------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
AMOUNT SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
S&P 500 DEPOSITORY RECEIPTS (2.2%)
19,300 S&P 500 Depository Receipts
(cost $2,497,388) $ 2,639,275
------------
TOTAL INVESTMENTS (cost
$112,690,796) $120,761,810
============
</TABLE>
- --------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLMC Federal Home Loan Mortgage Corp.
Cost for Federal income tax purposes: $112,859,907.
* Denotes a non-income producing security.
Portfolio holding percentages represent market value as a percentage of net
assets.
See accompanying notes to financial statements.
10 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 11
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, affiliated, at value (cost
$180,984) $ 195,769
Investments in securities, unaffiliated, at value (cost
$111,543,812) 119,600,041
Repurchase agreements (cost $966,000) 966,000
Cash 228
Receivable for Fund shares sold 386,265
Receivable for investment securities sold 893,405
Receivable from Advisor 19,593
Accrued interest and dividends receivable 106,406
Withholding tax reclaim receivable 1,539
Prepaid assets 23,007
------------
Total assets 122,192,253
------------
LIABILITIES
Payable for Fund shares redeemed 107,464
Payable for investment securities purchased 1,892,886
Accrued management fees 12,105
Accrued fund administration fees 4,667
Accrued transfer agent fees 933
Accrued distribution fees, Class R Shares 8,280
Accrued distribution fees, Local Fund Shares 1,735
Accrued administrative servicing fees, Class R Shares 13,295
Accrued administrative servicing fees, Class Y Shares 3,216
Other accrued expenses 36,449
------------
Total liabilities 2,081,030
------------
NET ASSETS $120,111,223
============
NET ASSETS REPRESENTED BY:
Capital $111,909,893
Net unrealized appreciation 8,071,014
Accumulated undistributed net realized gain 67,892
Accumulated undistributed net investment income 62,424
------------
NET ASSETS $120,111,223
============
NET ASSETS:
Class R Shares $ 72,048,785
Class Y Shares 17,388,751
Local Fund Shares 30,673,687
------------
Total $120,111,223
============
SHARES OUTSTANDING (unlimited number of shares authorized):
Class R Shares 6,049,124
Class Y Shares 1,456,079
Local Fund Shares 2,567,843
------------
Total 10,073,046
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE:*
Class R Shares $ 11.91
Class Y Shares $ 11.94
Local Fund Shares $ 11.95
</TABLE>
- ------------------------------------------------------
* None of the share classes are subject to a sales charge.
See accompanying notes to financial statements.
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 11
<PAGE> 12
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED
OCTOBER 31, 1999
------------------
<S> <C>
INVESTMENT INCOME:
INCOME:
Dividends $ 775,359
Interest 56,308
----------
Total income 831,667
----------
EXPENSES:
Investment management fees 79,372
Distribution fees, Class R Shares 38,403
Distribution fees, Local Fund Shares 19,387
Fund administration fees 30,506
Transfer agent fees 6,101
Administrative servicing fees, Class R Shares 64,084
Administrative servicing fees, Class Y Shares 19,354
Shareholders' reports 38,500
Registration fees 9,000
Professional services 15,600
Custodian fees 70,500
Trustees' fees and expenses 551
Other 17,205
----------
Total expenses before waived expenses 408,563
Total waived expenses (111,401)
----------
Net expenses 297,162
----------
NET INVESTMENT INCOME $ 534,505
==========
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 76,827
Net change in unrealized appreciation 8,790,010
----------
Net realized and unrealized gain (loss) on investments 8,866,837
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $9,401,342
==========
</TABLE>
- ------------------------------------------------------
See accompanying notes to financial statements.
12 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 13
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
STATEMENT OF CHANGE IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE PERIOD
ENDED JULY 24, 1998 TO
OCTOBER 31, 1999 OCTOBER 31,1998 (a)
-------------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 534,505 $ 87,043
Net realized gain (loss) on investments 76,827 (8,935)
Net change in unrealized appreciation (depreciation) of
investments 8,790,010 (718,996)
------------ -----------
Net increase (decrease) in net assets resulting from
operations 9,401,342 (640,888)
------------ -----------
DISTRIBUTIONS TO CLASS R SHAREHOLDERS FROM: (B)
Net investment income (179,657) --
DISTRIBUTIONS TO CLASS Y SHAREHOLDERS FROM: (B)
Net investment income (59,524) --
DISTRIBUTIONS TO LOCAL FUND SHAREHOLDERS FROM:
Net investment income (251,510) (68,433)
------------ -----------
DECREASE IN NET ASSETS FROM SHAREHOLDER DISTRIBUTIONS (490,691) (68,433)
------------ -----------
CAPITAL SHARE TRANSACTIONS: (c)
Net proceeds from sale of shares 95,453,068 23,141,368
Net asset value of shares issued to shareholders from
reinvestment of dividends 490,698 68,425
Cost of shares redeemed (7,068,579) (275,087)
------------ -----------
INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE
TRANSACTIONS 88,875,187 22,934,706
------------ -----------
NET INCREASE IN NET ASSETS 97,785,838 22,225,385
NET ASSETS--BEGINNING OF PERIOD 22,325,385 100,000
------------ -----------
NET ASSETS--END OF PERIOD $120,111,223 $22,325,385
============ ===========
Undistributed (distributions in excess of) net realized gain
(loss) on investments included in net assets at end of
period $ 67,892 $ (8,935)
============ ===========
Undistributed net investment income included in net assets
at end of period $ 62,424 $ 18,610
============ ===========
SHARE ACTIVITY: (c)
Shares sold 8,334,075 2,324,247
Reinvestment of dividends 43,870 7,654
Shares redeemed (616,230) (30,570)
------------ -----------
Net increase in number of shares 7,761,715 2,301,331
============ ===========
</TABLE>
- ------------------------------------------------------
(a) Local Fund Shares for the period from July 24, 1998 (commencement of
operations) through October 31, 1998.
(b) The Class R and Class Y Shares were first offered on November 2, 1998.
(c) For the current period, both the Capital Share Transactions and Share
Activity sections represent Class R, Class Y, and Local Fund Shares
combined. Prior period data reflect Local Fund Shares only.
See accompanying notes to financial statements.
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 13
<PAGE> 14
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS R SHARES CLASS Y SHARES LOCAL FUND SHARES
----------------------- ----------------------- ---------------------------------------
PERIOD FROM PERIOD FROM YEAR PERIOD FROM
NOVEMBER 2, 1998 NOVEMBER 2, 1998 ENDED JULY 24, 1998 TO
TO OCTOBER 31, 1999 (b) TO OCTOBER 31, 1999 (b) OCTOBER 31, 1999 OCTOBER 31, 1998 (a)
----------------------- ----------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING
OF PERIOD $ 9.66 $ 9.66 $ 9.66 $ 10.00
Net investment income 0.09 0.10 0.12 0.04
Net realized gain (loss)
and unrealized
appreciation
(depreciation) 2.25 2.27 2.27 (0.35)
------- ------- ------- -------
Total from investment
operations 2.34 2.37 2.39 (0.31)
------- ------- ------- -------
Dividends from net
investment income (0.09) (0.09) (0.10) (0.03)
------- ------- ------- -------
Net increase (decrease) in
net asset value 2.25 2.28 2.29 (0.34)
------- ------- ------- -------
NET ASSET VALUE -- END OF
PERIOD $ 11.91 $ 11.94 $ 11.95 $ 9.66
======= ======= ======= =======
Total Return 24.27% 24.64% 24.85% (3.08)%
Net Assets, End of Period
(000) $72,049 $17,389 $30,674 $22,325
Ratio of expenses to
average net assets 0.63%(c) 0.48%(c) 0.35% 0.35%(c)
Ratio of expenses to
average net assets* 0.83%(c) 0.67%(c) 0.52% 0.64%(c)
Ratio of net investment
income to average net
assets 0.69%(c) 0.87%(c) 1.05% 1.55%(c)
Ratio of net investment
income to average net
assets* 0.49%(c) 0.67%(c) 0.88% 1.26%(c)
Portfolio turnover (d) 55.07% 55.07% 55.07% 3.07%
</TABLE>
- ------------------------------------------------------
* Ratios calculated as if no fees were waived or expenses reimbursed.
(a) Local Fund Shares commenced operations on July 24, 1998.
(b) Class R and Class Y Shares were first offered on November 2, 1998.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.
See accompanying notes to the financial statements.
14 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 15
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
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 30, 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. The accompanying financial statements and
financial highlights relate to the Nationwide S&P 500 Index Fund (the "Fund")
only, a non-diversified portfolio.
The Fund currently offers three classes of shares: Class R, Class Y, and Local
Fund Shares. The Class R and Local Fund Shares are purchased with a 0.15% and
0.07% 12b-1 fee, respectively. The Class Y Shares have no 12b-1 fee. The Class R
and Class Y Shares are subject to a 0.25% administrative servicing fee.
(A) SECURITY VALUATION
1. 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.
2. 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.
3. 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 administrator or sub-administrator, 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 includes, where applicable, the pro rata amortization of premium or
discount.
(C) FEDERAL INCOME TAXES
The Fund's policy is to qualify as a regulated investment company under the
Internal Revenue Code, and to distribute all taxable income, if any, to its
shareholders. Therefore no provision has been made for federal income taxes as
it is the intention of the Fund to continue such qualification and to distribute
all taxable income, if any, to its shareholders. 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 Fund. Withholding
taxes have been paid or provided for in accordance with the applicable tax rates
and rules.
As of October 31,1999, the Fund had no net capital loss carry over.
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 15
<PAGE> 16
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
(D) DIVIDENDS TO SHAREHOLDERS
1. Dividend income, if any, is paid quarterly and is recorded on the
ex-dividend date.
2. Distributable net realized capital gains, if any, are declared and
distributed at least annually.
3. 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 Fund. For the year ended October 31, 1999, no
reclassifications were necessary.
(E) EXPENSES
General expenses of the Trust, not directly attributable to the Fund or to any
class of shares, are allocated to the Fund based upon the Fund's relative
average net assets or another appropriate basis, as approved by the Trust's
Board of Trustees. Once these expenses are allocated to the Fund, they are
sub-allocated to the classes based on total shares outstanding for each class.
Direct expenses of the Fund are allocated to the Fund and sub-allocated to the
classes as described above.
Direct expenses of a class are allocated to that class unless otherwise directed
by the Trust's Board of Trustees. For example, distribution fees 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 that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
16 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 17
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
(G) CAPITAL SHARE TRANSACTIONS
Transactions in class level shares of the Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL TRANSACTIONS
--------------------
PERIOD FROM
NOVEMBER 2, 1998 TO
OCTOBER 31, 1999
--------------------
<S> <C>
CLASS R SHARES:
Proceeds from shares
issued................... $69,746,897
Dividends reinvested....... 179,657
Cost of shares redeemed.... (403,176)
-----------
Change in net assets... $69,523,378
===========
CLASS Y SHARES:
Proceeds from shares
issued................... $21,188,128
Dividends reinvested....... 59,524
Cost of shares redeemed.... (4,730,253)
-----------
Change in net assets... $16,517,399
===========
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------
<S> <C>
LOCAL FUND SHARES:
Proceeds from shares
issued................... $4,518,043
Dividends reinvested....... 251,517
Cost of shares redeemed.... (1,935,150)
----------
Change in net assets... $2,834,410
==========
</TABLE>
<TABLE>
<CAPTION>
SHARE TRANSACTIONS:
--------------------
PERIOD FROM
NOVEMBER 2, 1998 TO
OCTOBER 31, 1999
--------------------
<S> <C>
CLASS R SHARES:
Issued..................... 6,068,255
Reinvested................. 15,874
Redeemed................... (35,005)
-----------
Change in shares....... 6,049,124
===========
CLASS Y SHARES:
Issued..................... 1,862,525
Reinvested................. 5,266
Redeemed................... (411,712)
-----------
Change in shares....... 1,456,079
===========
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED
OCTOBER 31, 1999
--------------------
<S> <C>
LOCAL FUND SHARES:
Issued..................... 403,295
Reinvested................. 22,730
Redeemed................... (169,513)
----------
Change in shares....... 256,512
==========
</TABLE>
2. TRANSACTIONS WITH AFFILIATES
On September 1, 1999, Villanova Mutual Fund Capital (VMF) replaced Nationwide
Advisory Services, Inc. (NAS), an affiliated company, as investment adviser to
the Fund. The Dreyfus Corporation (a wholly-owned subsidiary of Mellon Bank
Corp.) was selected to subadvise the Fund. 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 the Fund. From such management fees, and
pursuant to the subadvisory agreement, VMF pays subadvisory fees to The Dreyfus
Corporation. Additional information regarding investment advisory fees is as
follows for the year ended October 31, 1999:
<TABLE>
<CAPTION>
AVERAGE TOTAL ADVISORY PAID TOTAL ADVISORY PAID
DAILY ADVISORY FEE TO ADVISORY FEE TO
NET ASSETS FEE RETAINED SUBADVISER FEE RETAINED SUBADVISER
---------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Up to $250 million............... 0.13% 0.06% 0.07% $79,372 $42,763 $36,609
Next $250 million................ 0.13% 0.07% 0.06%
Next $500 million................ 0.13% 0.08% 0.05%
$1 billion and more.............. 0.13% 0.09% 0.04%
</TABLE>
VMF has voluntarily agreed to waive fees or reimburse expenses of the Fund in
order to maintain expense ratios at or below the stated expense caps. Fund
expenses were limited to 0.63% for Class R Shares, 0.48% for Class Y
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 17
<PAGE> 18
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
shares, and 0.35% for Local Fund Shares. During the period ended October 31,
1999, fees were waived as per the following table:
<TABLE>
<CAPTION>
TOTAL NET
FUND FEES FUND
EXPENSES WAIVED* EXPENSES
-------- ------- --------
<S> <C> <C>
$408,563 $111,401 $297,162
</TABLE>
* Includes advisory, fund administration and transfer and dividend disbursing
agent fees.
NAS may receive fees from the Class R Shares and the Local Fund Shares of the
Fund for distribution services pursuant to a Rule 12b-1 Distribution Plan
approved by the Board of Trustees. These fees are based on average daily net
assets of the respective class of the Fund at an annual rate of 0.15% for Class
R Shares and 0.07% for the Local Fund Shares. During the period ended October
31, 1999, the Fund paid distribution fees totaling $57,790.
On September 1, 1999, Villanova SA Capital Trust (VSA) replaced NAS as the
administrator. Pursuant to a Fund Administration Agreement, VSA receives fees
from the Fund for fund administration services that are calculated daily and
paid monthly. During the period ended October 31, 1999, fund administration fees
were paid according to the following schedule:
<TABLE>
<CAPTION>
AVERAGE DAILY FUND ADMINISTRATION
NET ASSETS FEE FEES
------------- ---- -------------------
<S> <C> <C>
Up to $1 billion 0.05% $30,506
Next $1 billion 0.04%
</TABLE>
Nationwide Investors Services, Inc. ("NISI"), a subsidiary of VSA, serves as
Transfer and Dividend Disbursing Agent for the Fund. For these services, NISI
receives fees based on average daily net assets of the Fund at an annual rate of
0.01%. During the period ended October 31, 1999, the Fund paid transfer agent
fees of $6,101.
Also, on September 1, 1999, VSA entered into an agreement with BISYS Fund
Services Ohio, Inc., to provide sub-administration and sub-transfer agent
services to the Fund.
As stated above, on September 1, 1999, NAS was replaced by VMF as investment
advisor and by VSA as 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 VMF and 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 year ended October 31, 1999.
Pursuant to a servicing agreement, financial institutions or other service
providers including Nationwide Financial Services, Inc., may receive fees under
the terms of an Administrative Services Plan for providing administrative
support services to the Shareholders of certain classes of shares of the Fund.
Such services include but are not limited to the following: establishing and
maintaining shareholder accounts, processing purchase and redemption
transactions, arranging bank wires, performing shareholder sub-accounting,
answering inquires regarding the Fund and other such services. These fees are
based on an annual rate of up to 0.25% of the average daily net
18 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
<PAGE> 19
NATIONWIDE(R) MUTUAL FUNDS
NATIONWIDE(R) S&P 500 INDEX FUND
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
assets of the Class R and Class Y Shares. For the period ended October 31, 1999
the Fund paid administrative servicing fees totaling $83,438.
3. 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 Statement of Operations. No compensating balances are required.
4. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding U.S. Government and short-term
securities) for the year ended October 31, 1999, are summarized below. There
were no purchases or sales of U.S. Government Obligations.
<TABLE>
<CAPTION>
SECURITIES
- -------------------------------
PURCHASES SALES
--------- -----------
<S> <C>
$122,258,217 $33,497,633
</TABLE>
Realized gains and losses have been computed on the first-in, first-out basis.
Included in net unrealized appreciation at October 31, 1999, based on cost for
federal income tax purposes are the following components:
<TABLE>
<CAPTION>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION (DEPRECIATION) APPRECIATION
- ------------ -------------- ------------
<S> <C> <C>
$12,998,626 ($5,096,353) $7,902,273
</TABLE>
5. 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 telecommunications, 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 partners) 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
their ongoing risk-management strategy.
6. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For corporate shareholders, 94.5% of the Nationwide S&P 500 Index Fund income
dividends and short-term capital gain distributions in the fiscal year ended
October 31, 1999, qualify for the corporate dividend received deduction.
NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT 19
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
Nationwide Mutual Funds:
We have audited the accompanying statement of assets and liabilities of
Nationwide Mutual Funds-Nationwide S&P 500 Index Fund (the Fund), including the
statement of investments, as of October 31, 1999, and the related statement of
operations for the year then ended, the statement of changes in net assets for
the year then ended and for the period from July 24, 1998 to October 31, 1998,
and the financial highlights for each of the periods indicated herein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements 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
Fund as of October 31, 1999, the results of its operations for the year then
ended, the changes in its net assets for the year then ended and for the period
from July 24, 1998 to October 31, 1998, and financial highlights for the periods
indicated herein, in conformity with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
December 17, 1999
20 NATIONWIDE(R) S&P 500 INDEX FUND ANNUAL REPORT
