<PAGE> 1
[Picture of People]
ANNUAL REPORT
PRESTIGE ADVISOR SERIES
99
[INVESCO(R) LOGO]
[GOLDMAN SACHS LOGO]
[BRINSON PARTNERS, INC. LOGO]
[LAZARD LOGO]
[JP MORGAN LOGO]
[NATIONWIDE(R) Family of Funds LOGO]
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[Picture of McFerson, Gasper, Hondros]
Left:
DIMON R. MCFERSON
Right:
JOSEPH J. GASPER
Seated:
PAUL J. HONDROS
MESSAGE
TO SHAREHOLDERS OCTOBER 31, 1999
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
The Prestige Advisor Series marked one year of performance at the close of
fiscal 1999. Introduced in November 1998, the Series offers investors the
opportunity to choose from among five mutual 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.
Results for the funds in the Prestige Series were mixed, with two funds
outperforming their respective benchmarks and three lagging their benchmarks.
These returns came amidst continued strong momentum in the U.S. stock market and
an improved global economic outlook.
The unmanaged S&P 500 Index (an indicator of trends among U.S. large
"blue-chip" stocks) surged +25.7%. The unmanaged Morgan Stanley Capital
International EAFE Index (an indicator of trends among international stocks)
climbed +23.0%.
In the U.S., market dominance by technology issues, as well as a continued
bias toward growth stocks versus value stocks during fiscal 1999, benefited
investors in two Prestige Advisor Series Funds: the Prestige Large Cap Growth
Fund and the Prestige Balanced Fund. At the same time, investors in the Prestige
Large Cap Value Fund and the Prestige Small Cap Fund were negatively impacted.
In international markets, strong performance by Japanese stocks was the key
driver. Stock selection in Japan contributed positively to the Prestige
International Fund's performance during fiscal 1999. However, the Fund trailed
its benchmark for the period.
PORTFOLIO MANAGEMENT
As we start the new fiscal year, we will keep a strong focus on investment
quality. Our select group of sub-advisors and our tenured team of internal
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. With the introduction
of the Prestige Advisor Series in November 1998, we increased our ability to
deliver both. In 2000, we plan to further expand our Nationwide Family of Funds
menu to include specialty portfolios offering exposure to specific market
sectors or industries--in the U.S. and abroad.
<PAGE> 3
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/ Joseph 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
1 Message to
Shareholders
2 Fund Highlights
5 Large Cap Value Fund
8 Large Cap Growth Fund
12 Balanced Fund
19 Small Cap Fund
24 International Fund
28 Statement of Assets
and Liabilities
30 Statement of
Operations
32 Statement of Changes
in Net Assets
34 Financial Highlights
37 Notes to Financial
Statements
46 Independent Auditors'
Report
49 Trustees and
Officers
<PAGE> 4
PRESTIGE ADVISOR SERIES(SM) HIGHLIGHTS
- --------------------------------------------------------------------------------
PRESTIGE LARGE CAP VALUE FUND
[Chart]
FUND PERFORMANCE - CLASS Y SHARES
$10,000 Lump Sum Investment
Value of Initial Value of reinvested
Investment distributions
11/98 $10,000 $10,000
1999 $10,350 $10,405
The value of an investment in the Large Cap Value Fund is illustrated in the
chart above. An investment of $10,000 made on 11/02/98 (the Fund's inception
date) would have earned an average annual compound return of 4.05% for the
period ended October 31, 1999. The chart above illustrates the growth of this
investment to $10,405. The 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. The Class Y Shares are not
subject to front-end sales charges.
TOP FIVE HOLDINGS
(Composition Subject to Change)
VALUE PORTFOLIO%
- -----------------------------------------------------------------
Wells Fargo Co. $1,302,200 4.86%
- -----------------------------------------------------------------
Federal Express Corp. $ 994,743 3.71%
- -----------------------------------------------------------------
Burlington Northern Sante Fe Corp. $ 812,812 3.03%
- -----------------------------------------------------------------
Electronic Data Systems Corp. $ 807,300 3.01%
- -----------------------------------------------------------------
Dominion Resources, Inc. $ 803,687 3.00%
- -----------------------------------------------------------------
PRESTIGE LARGE CAP GROWTH FUND
[Chart]
FUND PERFORMANCE - CLASS Y SHARES
$10,000 Lump Sum Investment
Value of Initial Value of reinvested
Investment distributions
11/98 $10,000 $10,000
1999 $13,600 $13,600
The value of an investment in the Large Cap Growth Fund is illustrated in the
chart above. An investment of $10,000 made on 11/02/98 (the Fund's inception
date) would have earned an average annual compound return of 36.00% for the
period ended October 31, 1999. The chart above illustrates the growth of this
investment to $13,600. The 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. The Class Y Shares are not
subject to front-end sales charges.
TOP FIVE HOLDINGS
(Composition Subject to Change)
VALUE PORTFOLIO%
- -----------------------------------------------------------------
General Electric Co. $2,331,675 5.95%
- -----------------------------------------------------------------
Microsoft Corp. $2,036,375 5.20%
- -----------------------------------------------------------------
Merck & Co., Inc. $1,463,950 3.74%
- -----------------------------------------------------------------
Cisco Systems, Inc. $1,361,600 3.47%
- -----------------------------------------------------------------
Intel Corp. $1,355,156 3.46%
- -----------------------------------------------------------------
2 NATIONWIDE
<PAGE> 5
PRESTIGE ADVISOR SERIES(SM) HIGHLIGHTS
- --------------------------------------------------------------------------------
PRESTIGE BALANCED FUND
[Chart]
FUND PERFORMANCE - CLASS Y SHARES
$10,000 Lump Sum Investment
Value of Initial Value of reinvested
Investment distributions
11/98 $10,000 $10,000
1999 $11,130 $11,362
The value of an investment in the Balanced Fund is illustrated in the chart
above. An investment of $10,000 made on 11/02/98 (the Fund's inception date)
would have earned an average annual compound return of 13.62% for the period
ended October 31, 1999. The chart above illustrates the growth of this
investment to $11,362. The 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. The Class Y Shares are not
subject to front-end sales charges.
TOP FIVE HOLDINGS
(Composition Subject to Change)
VALUE PORTFOLIO%
- ---------------------------------------------------------
FNMA $1,081,399 14.01%
- ---------------------------------------------------------
US Treasury $ 731,741 9.48%
- ---------------------------------------------------------
GNMA $ 473,161 6.13%
- ---------------------------------------------------------
Microsoft Corp. $ 238,441 3.09%
- ---------------------------------------------------------
Intel Corp. $ 136,290 1.77%
- ---------------------------------------------------------
PRESTIGE SMALL CAP FUND
[Chart]
FUND PERFORMANCE - CLASS Y SHARES
$10,000 Lump Sum Investment
Value of Initial Value of reinvested
Investment distributions
11/98 $10,000 $10,000
1999 $11,200 $11,236
The value of an investment in the Small Cap Fund is illustrated in the chart
above. An investment of $10,000 made on 11/02/98 (the Fund's inception date)
would have earned an average annual compound return of 12.36% for the period
ended October 31, 1999. The chart above illustrates the growth of this
investment to $11,236. The 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. The Class Y Shares are not
subject to front-end sales charges.
TOP FIVE HOLDINGS
(Composition Subject to Change)
VALUE PORTFOLIO%
- ---------------------------------------------------------
Broadvision, Inc. $459,900 2.11%
- ---------------------------------------------------------
Macromedia, Inc. $322,187 1.48%
- ---------------------------------------------------------
TriQuint Semiconductor, Inc. $320,000 1.47%
- ---------------------------------------------------------
IDEC Pharmaceuticals Corp. $313,706 1.44%
- ---------------------------------------------------------
Bank United Corp. $304,200 1.40%
- ---------------------------------------------------------
NATIONWIDE 3
<PAGE> 6
PRESTIGE ADVISOR SERIES(SM) HIGHLIGHTS
- --------------------------------------------------------------------------------
PRESTIGE INTERNATIONAL FUND
[Chart]
FUND PERFORMANCE - CLASS Y SHARES
$10,000 Lump Sum Investment
Value of Initial Value of reinvested
Investment distributions
11/98 $10,000 $10,000
1999 $11,670 $11,757
Value of initial investment Value of reinvested distributions
The value of an investment in the International Fund is illustrated in the chart
above. An investment of $10,000 made on 11/02/98 (the Fund's inception date)
would have earned an average annual compound return of 17.57% for the period
ended October 31, 1999. The chart above illustrates the growth of this
investment to $11,757. The 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. The Class Y Shares are not
subject to front-end sales charges.
TOP FIVE HOLDINGS BY COUNTRY
(Composition Subject to Change)
VALUE PORTFOLIO%
- ---------------------------------------------------
Japan $3,781,056 25.92%
- ---------------------------------------------------
Great Britain (U.K.) $3,330,172 22.83%
- ---------------------------------------------------
France $1,913,725 13.12%
- ---------------------------------------------------
Germany $1,499,730 10.28%
- ---------------------------------------------------
Switzerland $ 573,032 3.93%
- ---------------------------------------------------
4 NATIONWIDE
<PAGE> 7
PRESTIGE ADVISOR SERIES(SM)
- --------------------------------------------------------------------------------
PRESTIGE LARGE CAP VALUE FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Prestige Large Cap Value Fund (Class A) for the
12-month period ended October 31, 1999, was 3.86%(*), compared to 16.52% for the
Russell 1000 Value Index.
Investors have come to rely heavily on momentum-based strate- gies, and
this style has proven to be successful recently. The prime favorites of these
momentum strategies have been the "new economy" technology, telecommunications
equipment and telecommunications service stocks, which comprise a meaningful
proportion of total market capitalization as measured by the Wilshire 5000 Stock
Index. Underlying business fundamentals are not a stock selection criterion for
these momentum players, and stock prices in these "hot" industries have become
severely extended. In fact, our bottom-up stock analysis indicates that there
are more extreme valuation anomalies among industries and sectors in the
marketplace today than we have ever seen. As a result, growth stocks have
outperformed value stocks.
We continue to think the best values, as well as some of the best earnings
comparisons over the next few years, will be evident in select basic industry
and transportation companies.
Given the shift toward momentum-based styles, investors today have little
tolerance for a shortfall in quarterly earnings or even the perception that
management is guiding toward lower projections. These earnings disappointments
often have little longer-term fundamental relevance. The Fund owns a number of
companies where the reduction in stock price related to recent earnings
disappointment was unwarranted. Burlington Northern and Federal Express are
examples where the market lowered the relative price of these stocks and,
therefore, created an enhanced opportunity to add value from these holdings.
The Fund is overweighted in basic industries and transportation and is
underweighted in drugs, technology, energy, and telecommunications. We continue
to feel that the largest capitalization companies are overvalued relative to the
smaller capitalization companies in the index. The portfolio is, therefore,
significantly underweighted with respect to the largest companies in the index.
The current market environment creates challenges as well as opportunities
for investors with a clearly defined price-value approach and a strong adherence
to discipline in the face of market adversity. We are unwavering in our
commitment to a price/value discipline and believe the stocks we hold present
exciting future return possibilities. We are redoubling our efforts to
capitalize on those situations that we believe will create the best
opportunities for the Fund.
BRINSON PARTNERS, INC.
(*)PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
FUND VALUE $26,793,056
[Pie Chart]
PORTFOLIO COMPOSITION
(Subject to Change)
Repurchase Agreement 2.1%
Common Stock 97.5%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN
(For Period Ended October 31, 1999)
CLASS A CLASS B CLASS Y(3)
YEARS W/O SC(*) W/SC(1) W/O SC(*) W/SC(2) W/O SC W/SC
- --------------------------------------------------------------------
Life 3.86% -2.11% 2.50% -2.50% 4.05% -
- --------------------------------------------------------------------
Life of the Fund is since 11/02/98.
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 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 Class Y Shares are not subject to any sales charges.
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.
[Chart]
FUND PERFORMANCE
Russell
Class Y CPI 1000 Growth Class A Class B
11/98 $10,000 $10,000 $10,000 $9,425 $10,000
1999 $10,405 $10,256 $11,652 $9,789 $ 9,750
Comparative performance of $10,000 invested in the Large Cap Value Fund, the
Russell 1000 Value Index (Russell 1000 Value)(*) and the Consumer Price Index
(CPI)(**) since inception (11/02/98) to 10/31/99. Unlike our Fund, these indices
do not reflect any fees, expenses or sales charges. The Class A Shares include a
front-end sales charge.
* The Russell 1000 Value is comprised of the 1,000 largest U.S. companies,
based upon total market capitalization whose stocks have a greater than
average value orientation.
** The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
NATIONWIDE 5
<PAGE> 8
STATEMENT OF INVESTMENTS PRESTIGE LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (97.5%)
- ---------------------------------------------------------
AEROSPACE (1.4%)
19,000 Lockheed Martin Corp. $ 380,000
----------
- ---------------------------------------------------------
AIRLINES (3.7%)
23,100 Federal Express Corp.* 994,743
----------
- ---------------------------------------------------------
CAPITAL GOODS (5.6%)
8,700 Emerson Electric Co. 522,544
5,900 Illinois Tool Works, Inc. 432,175
7,200 Pentair, Inc. 270,900
11,900 York International Corp. 280,394
----------
1,506,013
----------
- ---------------------------------------------------------
CHEMICALS (4.4%)
4,100 Dow Chemical Co. 484,825
7,200 Du Pont (E.I.) De Nemours & Co. 463,950
19,000 Lyondell Chemical Co. 230,375
----------
1,179,150
----------
- ---------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (5.2%)
15,100 Lafarge Corp. 448,281
11,500 Southdown, Inc. 555,594
7,700 USG Corp. 381,631
----------
1,385,506
----------
- ---------------------------------------------------------
CONSUMER NON-CYCLICAL (2.8%)
6,800 National Service Industries, Inc. 219,300
15,200 Newell Rubbermaid, Inc. 526,300
----------
745,600
----------
- ---------------------------------------------------------
DRUGS (2.0%)
17,300 Watson Pharmaceuticals, Inc.* 549,275
----------
- ---------------------------------------------------------
ELECTRONICS (4.4%)
24,800 Advanced Micro Devices, Inc.* 491,350
23,600 Raytheon Co. 687,350
----------
1,178,700
----------
- ---------------------------------------------------------
FINANCIAL / BANKS (16.0%)
25,180 AmSouth Bancorp 648,385
8,900 Bank of America Corp. 572,937
13,500 Fleet Boston Corp. 588,938
35,800 Hibernia Corp. 507,913
11,200 PNC Bank Corp. 667,800
27,200 Wells Fargo Co. 1,302,200
----------
4,288,173
----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- ---------------------------------------------------------
FINANCIAL / MISCELLANEOUS (4.4%)
20,000 GreenPoint Financial Corp. $ 570,000
13,700 Household International, Inc. 611,363
----------
1,181,363
----------
- ---------------------------------------------------------
FOOD & RELATED (0.9%)
9,300 Philip Morris Cos., Inc. 234,244
----------
- ---------------------------------------------------------
HEALTH CARE (5.3%)
26,100 St. Jude Medical, Inc.* 714,488
13,900 United Heath Care Corp. 718,456
----------
1,432,944
----------
- ---------------------------------------------------------
INSURANCE (1.3%)
1,050 AON Corp. 37,275
5,400 MBIA, Inc. 308,138
----------
345,413
----------
- ---------------------------------------------------------
INSURANCE / LIFE (0.2%)
1,300 Aetna, Inc. 65,325
----------
- ---------------------------------------------------------
LEISURE PRODUCTS (0.8%)
15,300 Mattel, Inc. 204,637
----------
- ---------------------------------------------------------
MOTOR VEHICLES (4.8%)
8,100 Fleetwood Enterprises, Inc. 176,681
11,100 Johnson Controls, Inc. 674,325
12,500 Lear Corp.* 421,875
----------
1,272,881
----------
- ---------------------------------------------------------
NATURAL GAS (1.1%)
9,100 New Century Energies, Inc. 296,319
----------
- ---------------------------------------------------------
OIL / DOMESTIC (1.5%)
21,600 Valero Energy Corp. 396,900
----------
- ---------------------------------------------------------
OIL EQUIPMENT & SERVICES (0.7%)
8,200 Ultramar Diamond Shamrock Corp. 200,900
----------
- ---------------------------------------------------------
RAILROADS (4.5%)
25,500 Burlington Northern Santa Fe Corp. 812,812
16,400 Norfolk Southern Corp. 400,775
----------
1,213,587
----------
- ---------------------------------------------------------
RAW MATERIALS (1.1%)
22,300 IMC Global, Inc. 284,325
----------
6 NATIONWIDE
<PAGE> 9
STATEMENT OF INVESTMENTS PRESTIGE LARGE CAP VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- ---------------------------------------------------------
RETAIL (1.8%)
26,500 Consolidated Stores Corp.* $ 485,281
----------
- ---------------------------------------------------------
RETAIL / FOOD & DRUG (0.1%)
33 Delhaize America, Inc. 621
----------
- ---------------------------------------------------------
SERVICES/COMPUTER SERVICES (5.0%)
7,900 Computer Sciences Corp.* 542,631
13,800 Electronic Data Systems Corp. 807,300
----------
1,349,931
----------
- ---------------------------------------------------------
TELECOMMUNICATIONS (6.3%)
7,500 AT&T Corp. 350,625
6,600 Nextel Communications, Inc.* 568,838
12,800 U.S. West Communications Group 781,600
----------
1,701,063
----------
- ---------------------------------------------------------
TRANSPORTATION (2.0%)
15,800 GATX Corp. 524,362
----------
- ---------------------------------------------------------
UTILITIES / ELECTRIC (10.2%)
18,500 Carolina Power & Light Co. 638,250
33,200 Central & Southwest Corp. 736,625
14,700 CMS Energy Corp. 542,063
16,700 Dominion Resources, Inc. 803,687
----------
2,720,625
----------
TOTAL COMMON STOCK (cost $26,930,753) 26,117,881
----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (2.1%)
- ---------------------------------------------------------
$575,000 Fifth Third Bank 5.06%, 11/01/99,
Collateralized by $587,000 FHLMC
Gold Pool #E00570, 6.00%,
09/01/13, market value $587,000
(cost $575,000) 575,000
-----------
Total investments (cost $27,505,753) $26,692,881
===========
- ---------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLMC Federal Home Loan Mortgage Corp.
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $27,627,525.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
At October 31, 1999, the Fund's open futures contracts were as follows:
MARKET VALUE UNREALIZED
NUMBER OF COVERED BY APPRECIATION AT
CONTRACTS CONTRACT TYPE** EXPIRATION CONTRACTS 10/31/1999
- ----------------------------------------------------------------------------
Purchase(4) Standard December $1,376,200 $89,247
& Poor's 500
** CASH PLEDGED AS COLLATERAL.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NATIONWIDE 7
<PAGE> 10
PRESTIGE ADVISOR SERIES(SM)
- --------------------------------------------------------------------------------
PRESTIGE LARGE CAP GROWTH FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Prestige Large Cap Growth Fund (Class A) for the
12-month period ended October 31, 1999, was 35.80%*, compared to 34.24% for the
Russell 1000 Growth Index.
Two major themes characterized the 12-month reporting period: First,
investors continued to favor large capitalization over smaller capitalization
stocks. The Index's return of 34.24% significantly overshadowed the 12-month
returns of the Russell Midcap Index and the Russell 2000 Index, which posted
17.10% and 14.88% in returns, respectively. Second, the market maintained a bias
toward growth stocks versus value stocks; the Index also significantly
outperformed the Russell 1000 Value Index, which fell to 16.52%.
In managing the Fund, we do not take size or sector bets. We hope to add
value through individual stock selection. Based on rigorous testing of the
variables that have led to excess returns in the past, the Fund prefers stocks
with good momentum, lower-than-average risk, favorable fundamental research
analyst opinions, and attractive valuations. Over the long term, these factors
have led to excess returns, although they typically do not produce positive
results simultaneously. For the 12 months ended October 31, 1999, returns
attributable to our value and momentum themes both produced higher- than-average
returns. Returns attributable to stocks with lower risk were average. The
research theme behaved in the opposite direction to what we expected, however,
as the returns attributable to research were only modestly negative.
GOLDMAN SACHS ASSET MANAGEMENT
*PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
FUND VALUE $39,183,315
[Pie Chart]
PORTFOLIO COMPOSITION
(Subject to Change)
Repurchase Agreement 1.8%
Common Stock 98.0%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN
(For Period Ended October 31, 1999)
CLASS A CLASS B CLASS Y(3)
YEARS W/O SC* W/SC(1) W/O SC* W/SC(2) W/O SC W/SC
- ------------------------------------------------------------------
Life 35.80% 27.99% 35.00% 30.00% 36.00% -
- ------------------------------------------------------------------
Life of the Fund is since 11/02/98.
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 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 Class Y Shares are not subject to any sales charges.
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.
[Chart]
FUND PERFORMANCE
Russell
Class A CPI Class B 1000 Growth Class Y
11/98 $ 9,425 $10,000 $10,000 $10,000 $10,000
1999 $12,799 $10,256 $13,000 $13,424 $13,600
Comparative performance of $10,000 invested in the Large Cap Growth Fund, the
Russell 1000 Growth Index (Russell 1000 Growth)* and the Consumer Price Index
(CPI)** since inception (11/02/98) to 10/31/99. Unlike our Fund, these indices
do not reflect any fees, expenses or sales charges. The Class A Shares include a
front-end sales charge.
* The Russell 1000 Growth is comprised of the 1,000 largest U.S. companies,
based upon total market capitalization whose stocks have a greater than
average growth orientation.
** 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 PRESTIGE LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
Common Stock (98.0%)
- -------------------------------------------------------------
AEROSPACE (0.6%)
4,100 General Dynamics Corp. $ 227,294
200 United Technologies Corp. 12,100
----------
239,394
----------
- -------------------------------------------------------------
AIRLINES (0.2%)
1,500 Delta Air Lines, Inc. 81,656
----------
- -------------------------------------------------------------
APPAREL (0.7%)
4,700 Nike, Inc. Class B 265,256
----------
- -------------------------------------------------------------
BEVERAGES / ALCOHOLIC (0.2%)
400 Anheuser-Busch Cos., Inc. 28,725
900 Fortune Brands, Inc. 31,894
----------
60,619
----------
- -------------------------------------------------------------
BEVERAGES / SOFT DRINK (2.0%)
8,700 Coca-Cola Co. 513,300
8,200 PepsiCo, Inc. 284,438
----------
797,738
----------
- -------------------------------------------------------------
BIOTECHNOLOGY (0.1%)
400 Immunex Corp.* 25,200
----------
- -------------------------------------------------------------
BROADCAST MEDIA / CABLE TELEVISION (4.3%)
900 Comcast Corp. Special Class A 37,912
6,500 Cox Communications, Inc. Class A* 295,344
10,200 Infinity Broadcasting Corp.* 352,538
13,000 Time Warner, Inc. 905,938
500 Univision Communications, Inc. 42,531
1,000 Viacom, Inc. Class B* 44,750
----------
1,679,013
----------
- -------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES (0.3%)
1,800 Convergys Corp.* 35,213
7,700 Olsten Corp. 77,481
----------
112,694
----------
- -------------------------------------------------------------
CAPITAL GOODS (6.9%)
3,700 Eaton Corp. 278,425
17,200 General Electric Co. 2,331,675
800 Parker-Hannifin Corp. 36,650
1,400 Tyco International Ltd. 55,913
----------
2,702,663
----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------
CHEMICALS (0.2%)
700 Dow Chemical Co. $ 82,775
----------
- -------------------------------------------------------------
COMPUTER EQUIPMENT (10.2%)
5,500 Dell Computer Corp.* 220,687
10,200 EMC Corp.* 744,600
7,400 Hewlett-Packard Co. 548,063
11,800 International Business Machines Corp. 1,160,825
700 Lexmark International Group, Inc.* 54,644
9,100 Sun Microsystems, Inc.* 962,894
3,000 VERITAS Software Corp.* 323,625
----------
4,015,338
----------
- -------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (12.3%)
1,700 At Home Corp.* 63,537
500 Automatic Data Processing, Inc. 24,094
18,400 Cisco Systems, Inc.* 1,361,600
600 CMGI, Inc.* 65,662
2,600 DST Systems, Inc.* 165,587
1,000 Exodus Communications, Inc.* 86,000
8,900 First Data Corp. 406,619
300 Intuit, Inc.* 8,738
22,000 Microsoft Corp.* 2,036,375
500 Network Solutions, Inc.* 59,250
1,300 PSINet, Inc.* 46,800
700 Siebel Systems, Inc.* 76,869
10,000 Unisys Corp.* 242,500
600 VeriSign, Inc.* 74,100
600 Yahoo!, Inc.* 107,437
----------
4,825,168
----------
- -------------------------------------------------------------
CONSUMER DURABLES (0.6%)
3,300 Whirlpool Corp. 229,969
----------
- -------------------------------------------------------------
CONSUMER NON-CYCLICAL (3.1%)
11,600 Procter & Gamble Co. 1,216,550
----------
- -------------------------------------------------------------
DRUGS (10.9%)
300 Allergan, Inc. 32,212
7,200 Amgen, Inc. 574,200
1,500 Biogen, Inc.* 111,188
16,100 Bristol-Meyers Squibb Co. 1,236,681
900 Eli Lilly & Co. 61,988
1,600 Genzyme Corp.* 61,200
18,400 Merck & Co., Inc. 1,463,950
15,500 Pfizer, Inc. 612,250
2,500 Schering-Plough Corp. 123,750
----------
4,277,419
----------
NATIONWIDE 9
<PAGE> 12
STATEMENT OF INVESTMENTS PRESTIGE LARGE CAP GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------------
ELECTRONICS (8.1%)
1,500 Applied Micro Circuits Corp.* $ 116,719
500 Broadcom Corp. Class A* 63,906
17,500 Intel Corp. 1,355,156
1,400 LSI Logic Corp.* 74,463
300 Motorola, Inc. 29,231
1,500 PMC-Sierra, Inc.* 141,375
900 Scientific-Atlanta, Inc. 51,525
6,200 Solectron Corp.* 466,550
9,000 Texas Instruments, Inc. 807,750
1,000 Xilinx, Inc.* 78,625
----------
3,185,300
----------
- --------------------------------------------------------------------
FINANCIAL / BANKS (0.1%)
528 FirStar Corp. 15,510
----------
- --------------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (1.2%)
1,250 Citigroup, Inc. 67,656
1,900 Lehman Brothers Holding, Inc. 140,006
400 Morgan Stanley Dean Witter & Co. 44,125
5,400 Schwab (Charles) Corp. (The) 210,263
----------
462,050
----------
- --------------------------------------------------------------------
FOOD & RELATED (3.9%)
14,500 ConAgra, Inc. 377,906
15,700 IBP, Inc. 375,819
20,200 Nabisco Group Holdings Corp. 258,812
9,100 Nabisco Holdings Corp. Class A 340,113
2,000 Philip Morris Cos., Inc. 50,375
1,725 Unilever NV 115,036
----------
1,518,061
----------
- --------------------------------------------------------------------
FURNITURE / FURNISHINGS (0.1%)
2,200 Shaw Industries, Inc. 33,962
----------
- --------------------------------------------------------------------
HEALTH CARE (6.0%)
1,300 Abbott Laboratories 52,487
100 Bausch & Lomb, Inc. 5,400
200 Cardinal Health, Inc. 8,625
14,700 Columbia/HCA Healthcare Corp. 354,637
10,700 Johnson & Johnson Co. 1,120,825
1,200 Medtronic, Inc. 41,550
900 PacifiCare Health Systems, Inc.* 35,494
2,300 Summit Technology, Inc.* 35,794
4,200 Tenet Healthcare Corp.* 81,638
200 Trigon Healthcare, Inc.* 5,675
6,600 United Heathcare Corp. 341,137
5,000 Wellpoint Health Networks, Inc.* 290,000
----------
2,373,262
----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------------
HOTELS / MOTELS (0.2%)
1,800 Marriott International, Inc. Class A $ 60,637
----------
INSURANCE (1.3%)
4,875 American International Group, Inc. 501,820
----------
- --------------------------------------------------------------------
INSURANCE / LIFE (1.2%)
4,350 Providian Corp. 474,150
----------
- --------------------------------------------------------------------
INSURANCE / PROPERTY & CASUALTY (0.3%)
3,000 Travelers Property Casualty Corp. Class A 108,000
----------
- --------------------------------------------------------------------
LEISURE PRODUCTS (0.1%)
700 Hasbro, Inc. 14,437
----------
- --------------------------------------------------------------------
MORTGAGE / ASSET BACKED (0.5%)
2,700 Fannie Mae 191,025
300 Freddie Mac 16,219
----------
207,244
----------
- --------------------------------------------------------------------
MOTOR VEHICLES (3.8%)
19,000 Delphi Automotive Systems Corp. 312,312
6,900 Ford Motor Co. 378,638
4,800 Hertz Corp. 208,200
4,900 Johnson Controls, Inc. 297,675
7,400 Navistar International Corp.* 308,488
----------
1,505,313
----------
- --------------------------------------------------------------------
OIL & GAS / EXPLORATION & PRODUCTION (0.5%)
3,300 Royal Dutch Petroleum Co. 197,794
----------
- --------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.7%)
6,900 Georgia Pacific Corp. 273,844
----------
- --------------------------------------------------------------------
PHOTOGRAPHIC (0.1%)
600 Eastman Kodak Co. 41,362
----------
- --------------------------------------------------------------------
PRINTING & PUBLISHING (0.2%)
1,100 Electronics for Imaging, Inc.* 44,344
800 Tribune Co. 48,000
----------
92,344
----------
10 NATIONWIDE
<PAGE> 13
STATEMENT OF INVESTMENTS PRESTIGE LARGE CAP GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------------
RESTAURANTS (0.1%)
800 McDonald's Corp. $ 33,000
-----------
- -------------------------------------------------------------------
RETAIL (4.1%)
900 Amazon.com, Inc.* 63,562
5,700 Circuit City Stores-Circuit City Group 243,319
200 Costco Wholesale Corp.* 16,063
5,100 Home Depot, Inc. 385,050
100 Kohls Corp.* 7,481
7,000 Limited, Inc. (The) 287,875
2,000 TJX Cos., Inc. 54,250
9,900 Wal-Mart Stores, Inc. 565,537
-----------
1,623,137
-----------
- -------------------------------------------------------------------
SERVICES (6.2%)
6,400 America Online, Inc. 830,000
500 Computer Sciences Corp.* 34,344
200 Electronic Data Systems Corp. 11,700
200 Marsh & McLennan Cos., Inc. 15,812
1,000 Novell, Inc.* 20,063
200 Omnicom Group 17,600
14,950 Oracle Corp.* 711,059
2,200 QUALCOMM, Inc.* 490,050
21,600 Republic Services, Inc. Class A* 264,600
1,000 Sabre Holdings Corp.* 44,438
-----------
2,439,666
-----------
- -------------------------------------------------------------------
TELECOMMUNICATIONS (6.6%)
1,200 Alltel Corp. 99,900
2,300 AT&T Corp. 107,525
2,100 Level 3 Communications, Inc.* 143,588
14,200 Lucent Technologies, Inc. 912,350
13,000 MCI WorldCom, Inc.* 1,115,562
600 Nextel Communications, Inc.* 51,713
1,300 NEXTLINK Communications Class A* 77,756
900 Qwest Communications International, Inc.* 32,400
1,000 RCN Corp.* 47,875
-----------
2,588,669
-----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------------
UTILITIES / ELECTRIC (0.1%)
900 Pinnacle West Capital Corp $ 33,187
-----------
TOTAL COMMON STOCK (cost $35,966,246) 38,394,201
-----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (1.8%)
- -------------------------------------------------------------------
$715,000 Fifth Third Bank 5.06%, 11/01/99,
Collateralized by $730,000 FHLMC
Gold Pool #E00570, 6.00%,
09/01/13, market value $730,000
(cost $715,000) 715,000
-----------
TOTAL INVESTMENTS (cost $36,681,246) $39,109,201
===========
- -------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLMC Federal Home Loan Mortgage Corp.
- -----------------------------------------------------------------------
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $36,842,488
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
At October 31, 1999, the Fund's open futures contracts were as follows:
MARKET VALUE UNREALIZED
NUMBER OF COVERED BY APPRECIATION AT
CONTRACTS CONTRACT TYPE** EXPIRATION CONTRACTS 10/31/1999
- -----------------------------------------------------------------------
Purchase 2 Standard December $688,100 $56,436
& Poor's 500
Purchase 1 E-mini Standard December 65,000 219
& Poor's 500
** CASH PLEDGED AS COLLATERAL.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NATIONWIDE 11
<PAGE> 14
PRESTIGE ADVISOR SERIES(SM)
- --------------------------------------------------------------------------------
PRESTIGE BALANCED FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Prestige Balanced Fund (Class A) for the 12-month
period ended October 31, 1999, was 13.47%, compared to the Fund's benchmark of
25.67% for the S&P 500, 0.53% for the Lehman Brothers Aggregate Bond Index, and
15.61%* for a combination of 60% S&P 500 and 40% Lehman Brothers Aggregate
indices.
During the first half of the year, strong stock selection in the telephone
and technology sectors contributed positively to performance as we underweighted
Bell South Corp. (-23%) and overweighted EMC Corp. (+42%). Conversely, the
Fund's holdings in Service Corp. (-81%) and Philip Morris (-25%) detracted from
performance.
The broadening of the U.S. equity market enhanced the Fund's performance in
the second quarter. This broadening effect was favorable to the Fund as it
benefited as much from being underweighted in many of the former market leaders,
such as GE and Microsoft, as it did from being overweighted in many of the
formerly overlooked non-"Nifty-Fifty" names.
Fund results were dampened at the end of September, however, with the
return of an extremely narrow market environment. The technology sector was the
only one of 16 groups we follow to make headway during the third quarter (+6%),
bringing year-to-date gains to 31%. Driving factors included the explosive
growth of the Internet as well as the lack of evidence of a much-anticipated Y2K
spending moratorium. Strong earnings results by Intel and Sun Microsystems
allowed these stocks to advance despite the rising interest rate environment.
Rising interest rates impacted financial stocks (-15%) and the damage from
Hurricane Floyd was the major factor impacting the insurance sector (-17%). The
insurance sector was also hurt by Unum Provident (-29%) unexpectedly posting
weak second quarter results in its inaugural quarter as a merged disability
insurer. The services sector continues to be pulled down by the underperformance
of Waste Management (-64%) and Service Corp. International (-45%) as both
companies pre-announced earnings disappointments.
In fixed income markets, the U.S. Treasury market held up reasonably well,
while increased corporate and government agency debt issuance caused spreads to
widen. The Fund was conservatively positioned in the credit sectors and held a
heavy allocation in U.S. Treasuries and mortgage-backed securities as of the
third quarter. After the Fed tightening, we began adding high quality and more
liquid corporate and agency debt at the wider spread levels. Given our
expectation of rising rates, we will generally maintain shorter-than-index
duration in the fixed income portion of the Fund. Continued interest rate
volatility will present opportunities for tactical value-added around this
position. Going forward, we plan to raise our corporate bond allocation and
reduce our allocations to Treasuries and mortgage-backed securities.
J.P. MORGAN INVESTMENT MANAGEMENT, INC.
*PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DIVIDENDS REINVESTED.
FUND VALUE $7,718,726
[Pie Chart]
PORTFOLIO COMPOSITION
(Subject to Change)
Asset-Backed Securities 2.8%
Common Stock 59.9%
U.S. Government Obligations 31.8%
Corporate Bonds 3.0%
Canadian Bonds 0.7%
Repurchase Agreement 13.2%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN
(For Period Ended October 31, 1999)
CLASS A CLASS B CLASS Y(3)
YEARS W/O SC* W/SC(1) W/O SC* W/SC(2) W/O SC W/SC
- --------------------------------------------------------------------
Life 13.47% 6.95% 12.54% 7.54% 13.62% -
- --------------------------------------------------------------------
Life of the Fund is since 11/02/98.
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance date.
* 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 Class Y Shares are not subject to any sales charges.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more than original cost. Past performance is no guarantee of
future results.
[Chart]
FUND PERFORMANCE
S&P 500 Class Y Class B Class A LBAB
11/98 $10,000 $10,000 $10,000 $ 9,425 $10,000
1999 $12,567 $11,362 $10,754 $10,695 $10,053
Comparative performance of $10,000 invested in the Balanced Fund, S&P 500* and
the Lehman Brothers Aggregate Bond Index (LBAB)** since inception (11/02/98) to
10/31/99. Unlike our Fund, these indices do not reflect any fees, expenses or
sales charges. The Class A Shares include a front-end sales charge.
* The S&P 500 is a market-weighted, unmanaged index of 500 stocks in a
variety of industry sectors designed to measure performance of the broad
domestic economy.
** The LBAB an unmanaged index comprised of the Lehman Brothers
Government/Corporate Bond Index and two Lehman Brothers asset- backed
securities indices.
12 NATIONWIDE
<PAGE> 15
STATEMENT OF INVESTMENTS PRESTIGE BALANCED FUND
- --------------------------------------------------------------------------------
October 31, 1999
PRINCIPAL SECURITY VALUE
ASSET BACKED SECURITIES (2.8%)
- ---------------------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (2.8%)
$70,000 Citibank Credit Card Master Trust I, Series 1999-1,
Class A, 5.50%, 02/15/06 $ 66,780
40,000 Citibank Credit Card Master Trust I, Series 1999-6,
Class A, 0.00%, 08/15/06 28,829
40,000 Green Tree Financial Corp., Series 1994-1,
Class A4, 7.20%, 04/15/19 40,278
50,000 Sears Credit Account Master Trust, Series 1999-2,
Class A, 6.35%, 02/15/07 49,745
30,000 Sears Credit Account Master Trust, Series 1999-1,
Class A, 5.65%, 03/17/09 28,834
---------
TOTAL ASSET BACKED SECURITIES (cost $213,866) 214,466
---------
CANADIAN BOND (0.7%)
- ---------------------------------------------------------------------------
55,000 Ontario (Province of), 7.625%, 06/22/04
(cost $56,790) 56,853
---------
PRINCIPAL SECURITY VALUE
COMMON STOCK (59.9%)
- ---------------------------------------------------------------------------
AEROSPACE (0.4%)
305 Boeing Co. (The) 14,049
140 Goodrich (B.F.) Co. 3,316
600 Lockheed Martin Corp. 12,000
---------
29,365
---------
- ---------------------------------------------------------------------------
AIRLINES (0.1%)
90 AMR Corp.* 5,715
2 Federal Express Corp.* 86
220 Southwest Airlines 3,699
---------
9,500
---------
- ---------------------------------------------------------------------------
ALUMINUM (0.3%)
2 Alcan Aluminium Ltd. 66
264 Alcoa, Inc. 16,038
150 Reynolds Metals Co. 9,066
---------
25,170
---------
- ---------------------------------------------------------------------------
APPAREL (0.1%)
130 Jones Apparel Group, Inc.* 4,111
---------
- ---------------------------------------------------------------------------
BEVERAGES / ALCOHOLIC (0.4%)
665 Seagram Co. Ltd. 32,834
---------
- ---------------------------------------------------------------------------
BEVERAGES / SOFT DRINK (0.9%)
681 Coca Cola Co. 40,179
917 PepsiCo, Inc. 31,808
---------
71,987
---------
PRINCIPAL SECURITY VALUE
COMMON STOCK (CONTINUED)
- ---------------------------------------------------------------------------
BIOTECHNOLOGY (0.1%)
20 Human Genome Sciences, Inc. $ 1,748
6 Immunex Corp.* 378
---------
2,126
---------
- ---------------------------------------------------------------------------
BROADCAST MEDIA / CABLE TELEVISION (1.8%)
916 AT&T Corp. - Liberty Media Group Class A* 36,354
892 Comcast Corp. Special Class A 37,575
890 MediaOne Group, Inc.* 63,246
---------
137,175
---------
- ---------------------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES (0.3%)
190 3COM Corp.* 5,510
1 Compaq Computer Corp. 19
8 Convergys Corp.* 157
60 Herman Miller, Inc. 1,301
680 Xerox Corp. 19,040
---------
26,027
---------
- ---------------------------------------------------------------------------
CAPITAL GOODS (4.0%)
210 Applied Materials, Inc.* 18,861
4 Caterpillar, Inc. 221
306 Deere & Co. 11,092
90 Eaton Corp. 6,772
286 Emerson Electric Co. 17,178
1,295 General Electric Co. 175,553
216 Genuine Parts Co. 5,630
114 Grainger (W.W.), Inc. 4,831
6 Illinois Tool Works, Inc. 440
80 Ingersoll-Rand Co. 4,180
112 ITT Industries, Inc. 3,829
2 Parker-Hannifin Corp. 92
80 Perkin-Elmer Corp. (The) 5,190
1,322 Tyco International Ltd. 52,797
---------
306,666
---------
- ---------------------------------------------------------------------------
CHEMICALS (1.4%)
480 Air Products & Chemicals, Inc. 13,200
201 Allied-Signal, Inc. 11,444
18 Dow Chemical Co. 2,128
1 Du Pont (E.I.) De Nemours & Co. 64
260 Lyondell Chemical Co. 3,153
827 Monsanto Co. 31,840
4 Occidental Petroleum Corp. 91
106 Praxair, Inc. 4,956
444 Rohm & Haas Co. 16,983
266 Solutia, Inc. 4,572
304 Union Carbide Corp. 18,544
---------
106,975
---------
NATIONWIDE 13
<PAGE> 16
STATEMENT OF INVESTMENTS PRESTIGE BALANCED FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------------
COMPUTER EQUIPMENT (2.7%)
600 Dell Computer Corp.* $ 24,075
530 EMC Corp.* 38,690
1,002 International Business Machines Corp. 98,572
96 Quantum Corp. - DLT & Storage Systems* 1,482
3 Quantum Corp. - Hard Disk Drive* 18
426 Sun Microsystems, Inc.* 45,076
90 Symbol Technology, Inc. 3,578
---------
211,491
---------
- -------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (5.4%)
330 Automatic Data Processing, Inc. 15,902
132 BMC Software, Inc.* 8,473
1,794 Cisco Systems, Inc.* 132,756
8 Electronic Arts, Inc.* 647
40 Exodus Communications, Inc.* 3,440
236 First Data Corp. 10,782
2,576 Microsoft Corp.* 238,441
6 Network Associates, Inc.* 110
138 Seagate Technology* 4,062
---------
414,613
---------
- -------------------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (0.1%)
6 Owens Corning 123
4 Sherwin Williams Co. 89
60 USG Corp. 2,974
---------
3,186
---------
- -------------------------------------------------------------------
CONSUMER DURABLES (0.1%)
2 Whirlpool Corp. 139
---------
- -------------------------------------------------------------------
CONSUMER NON-CYCLICAL (1.8%)
150 Clorox Co. (The) 6,141
4 Colgate-Palmolive Co. 242
676 Gillette Co. (The) 24,463
336 Kimberly Clark Corp. 21,210
829 Procter & Gamble Co. 86,941
---------
138,997
---------
- -------------------------------------------------------------------
CONTAINERS (0.1%)
240 Smurfit-Stone Container Corp.* 5,190
66 Temple-Inland, Inc. 3,836
200 Tenneco, Inc. 3,200
---------
12,226
---------
- -------------------------------------------------------------------
DRUGS (4.9%)
304 ALZA Corp.* 13,015
1,090 American Home Products Corp. 56,952
96 Amgen, Inc. 7,656
1,280 Bristol-Meyers Squibb Co. 98,320
860 Eli Lilly & Co. 59,232
280 Forest Labs Class A* 12,845
72 Genzyme Corp.* 2,754
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------------
DRUGS (CONTINUED)
8 Genzyme Molecular Oncology* $ 40
20 IDEC Pharmaceuticals Corp.* 2,324
4 MedImmune, Inc.* 448
384 Merck & Co., Inc. 30,552
496 Pfizer, Inc. 19,592
540 Schering-Plough Corp. 26,730
571 Warner-Lambert Co. 45,573
120 Watson Pharmaceuticals, Inc.* 3,810
---------
379,843
---------
- -------------------------------------------------------------------
ELECTRONICS (3.2%)
4 Advanced Micro Devices, Inc.* 79
6 Conexant Systems, Inc.* 560
126 Cooper Industries, Inc. 5,426
20 DoubleClick, Inc.* 2,800
96 Harris Corp. 2,154
50 Hubbell, Inc. Class B 1,384
1,760 Intel Corp. 136,290
324 Motorola, Inc. 31,570
90 National Semiconductor Corp.* 2,694
100 Raytheon Co. 2,912
248 Raytheon Co. Class A 6,805
2 Rockwell International Corp. 97
520 Texas Instruments, Inc. 46,670
84 Xilinx, Inc.* 6,605
---------
246,046
---------
- -------------------------------------------------------------------
FINANCIAL / BANKS (3.9%)
110 Ambac Financial 6,572
271 AmSouth Bancorp 6,978
42 Associated Banc-Corp. 1,616
38 Astoria Financial 1,368
30 BancWest Corp. 1,254
1,291 Bank of America Corp. 83,108
811 Bank One Corp. 30,463
149 Charter One Financial, Inc. 3,660
8 Chase Manhattan Corp. (The) 699
84 Compass Bancshares, Inc. 2,242
126 Dime Bancorp, Inc. 2,252
100 First Tennessee National Corp. 3,400
733 First Union Corp. 31,290
2 FirStar Corp. 59
66 FirstMerit Corp. 1,745
194 Fleet Boston Corp. 8,463
106 Hibernia Corp. 1,504
175 Huntington Bancshares, Inc. 5,184
336 Keycorp 9,387
10 M&T Bank Corp. 4,955
2 Marshall & Ilsley Corp. 134
46 Mercantile Bankshare Corp. 1,656
460 National City Corp. 13,570
8 National Commerce Bancorp 200
92 North Fork Bancorp, Inc. 1,903
40 Pacific Century Financial Corp. 913
60 Peoples Heritage Financial Group 1,140
220 PNC Bank Corp. 13,118
20 Provident Financial Group 859
14 NATIONWIDE
<PAGE> 17
STATEMENT OF INVESTMENTS PRESTIGE BALANCED FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- ---------------------------------------------------------
FINANCIAL / BANKS (CONTINUED)
170 Regions Financial Corp. $ 5,111
2 Republic New York Corp. 126
110 SouthTrust Corp. 4,400
94 Sovereign Bancorp, Inc. 828
134 Summit Bancorp 4,640
64 TCF Financial Corp. 1,888
550 U.S. Bancorp Class A 20,384
104 Union Planters Corp. 4,628
436 Wells Fargo Co. 20,874
16 Wilmington Trust Corp. 868
--------
303,439
--------
- ---------------------------------------------------------
FINANCIAL / MISCELLANEOUS (3.1%)
4 American Express Co. 616
306 Associates First Capital Corp. 11,169
88 Bear Stearns Cos., Inc. 3,751
6 Capital One Financial Corp. 318
110 CIT Group, Inc. (The) 2,626
2,127 Citigroup, Inc. 115,124
48 FINOVA Group, Inc. 2,115
34 First Virginia Banks, Inc. 1,628
38 Golden West Financial Corp. 4,246
330 Goldman Sachs Group, Inc. 23,430
78 GreenPoint Financial Corp. 2,223
360 Household International, Inc. 16,065
8 Lehman Brothers Holding, Inc. 590
270 Merrill Lynch & Co., Inc. 21,195
4 Morgan Stanley Dean Witter & Co. 441
108 Paine Webber Group, Inc. 4,401
300 Schwab (Charles) Corp. (The) 11,681
280 TD Waterhouse Group, Inc.* 3,553
5 Waddell & Reed Financial, Inc. Class A 120
5 Waddell & Reed Financial, Inc. Class B 116
432 Washington Mutual, Inc. 15,525
--------
240,933
--------
- ---------------------------------------------------------
FOOD & RELATED (1.4%)
176 BestFoods, Inc. 10,340
8 Campbell Soup Co. 360
2 General Mills 174
220 Heinz (H.J.) Co. 10,505
84 Hershey Foods Corp. 4,242
2 Kellogg Co. 80
34 Nabisco Holdings Corp. Class A 1,271
1,688 Philip Morris Cos., Inc. 42,516
8 Ralston-Ralston Purina Group 251
560 Sara Lee Corp. 15,155
376 Unilever NV 25,075
--------
109,969
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- ---------------------------------------------------------
FURNITURE / FURNISHINGS (0.1%)
316 Leggett & Platt, Inc. $ 7,011
--------
- ---------------------------------------------------------
GOLD (0.1%)
240 Freeport-McMoRan Copper & Gold, Inc. 4,005
--------
- ---------------------------------------------------------
HEALTH CARE (1.2%)
820 Abbott Laboratories 33,108
4 Bausch & Lomb, Inc. 216
190 Becton Dickinson & Co. 4,821
292 Boston Scientific Corp.* 5,877
515 Columbia/HCA Healthcare Corp. 12,424
360 HealthSouth Corp.* 2,070
132 Humana, Inc.* 908
116 Johnson & Johnson Co. 12,151
7 LifePoint Hospitals, Inc.* 83
88 Manor Care, Inc.* 1,386
290 Medtronic, Inc. 10,041
70 St. Jude Medical, Inc.* 1,916
268 Tenet Healthcare Corp.* 5,209
7 Triad Hospitals, Inc.* 68
66 United HeathCare Corp. 3,411
60 Wellpoint Health Networks, Inc.* 3,480
--------
97,169
--------
- ---------------------------------------------------------
HOTELS / MOTELS (0.2%)
436 Hilton Hotels Corp. 4,033
180 International Game Technology 3,352
110 Mandalay Resort Group* 2,049
288 Mirage Resorts, Inc.* 4,194
6 Park Place Entertainment Corp.* 79
290 Starwood Hotels & Resorts Worldwide 6,652
--------
20,359
--------
- ---------------------------------------------------------
INSURANCE (1.7%)
2 AEGON NV 184
1,257 Allstate Corp. 36,139
133 American International Group, Inc. 13,691
400 AON Corp. 14,200
220 AXA Financial, Inc. 7,054
8 Chubb Corp. 439
360 Hartford Financial Services Group 18,652
162 MBIA, Inc. 9,244
48 Mercury General Corp. 1,353
206 SAFECO Corp. 5,665
362 St. Paul Cos., Inc. 11,584
372 Unum Provident Corp. 12,252
--------
130,457
--------
NATIONWIDE 15
<PAGE> 18
STATEMENT OF INVESTMENTS PRESTIGE BALANCED FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------
INSURANCE / LIFE (0.3%)
116 Aetna, Inc. $ 5,829
160 CIGNA Corp. 11,960
2 Lincoln National Corp. 92
154 Torchmark Corp. 4,803
--------
22,684
--------
- -------------------------------------------------------------
INSURANCE / PROPERTY & CASUALTY (0.1%)
40 Fremont General Corp. 345
76 Travelers Property Casualty Corp. Class 2,736
--------
3,081
--------
- -------------------------------------------------------------
LEISURE PRODUCTS (0.1%)
108 Hasbro, Inc. 2,228
380 Mattel, Inc. 5,082
--------
7,310
--------
- -------------------------------------------------------------
MORTGAGE / ASSET BACKED (0.3%)
80 Countrywide Credit Industries, Inc. 2,715
41 Fannie Mae 2,901
300 Freddie Mac 16,219
--------
21,835
--------
- -------------------------------------------------------------
MOTOR VEHICLES (0.9%)
216 Dana Corp. 6,386
629 Delphi Automotive Systems Corp. 10,339
798 Ford Motor Co. 43,790
4 General Motors Corp. 281
116 Lear Corp.* 3,915
70 PACCAR, Inc. 3,299
--------
68,010
--------
- -------------------------------------------------------------
NATURAL GAS (0.1%)
66 Columbia Energy Group 4,290
74 Consolidated Natural Gas Co. 4,736
2 Kinder Morgan, Inc.* 40
--------
9,066
--------
- -------------------------------------------------------------
OIL & GAS / EXPLORATION & PRODUCTION (1.1%)
2 BP Amoco PLC ADR 115
90 Conoco, Inc. Class A 2,469
398 Conoco, Inc. Class B 10,796
1,188 Royal Dutch Petroleum Co. 71,206
--------
84,586
--------
- -------------------------------------------------------------
OIL / DOMESTIC (0.2%)
318 Phillips Petroleum Co. 14,787
128 Tosco Corp. 3,240
4 Union Pacific Resources Group, Inc. 58
--------
18,085
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------
OIL / INTERNATIONAL (2.0%)
110 Chevron Corp. $ 10,044
881 Exxon Corp. 65,249
631 Mobil Corp. 60,892
330 Texaco, Inc. 20,254
6 Unocal Corp. 207
--------
156,646
--------
- -------------------------------------------------------------
OIL EQUIPMENT & SERVICES (0.1%)
44 Cooper Cameron Corp.* 1,702
56 Diamond Offshore Drilling, Inc. 1,778
112 Ensco International, Inc. 2,170
140 Global Marine, Inc.* 2,126
136 R&B Falcon Corp.* 1,692
40 Smith International, Inc.* 1,383
60 Ultramar Diamond Shamrock Corp. 1,470
--------
12,321
--------
- -------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.2%)
62 Bowater, Inc. 3,255
2 Champion International Corp. 116
250 Fort James Corp. 6,578
54 Georgia Pacific Corp. 2,143
150 International Paper Co. 7,894
8 Louisiana-Pacific Corp. 101
6 Mead Corp. 216
--------
20,303
--------
- -------------------------------------------------------------
PHOTOGRAPHIC (0.3%)
394 Eastman Kodak Co. 27,161
--------
- -------------------------------------------------------------
POLLUTION CONTROL (0.1%)
715 Waste Management, Inc. 13,138
--------
- -------------------------------------------------------------
PRINTING & PUBLISHING (0.7%)
270 Gannett Co., Inc. 20,824
124 Knight-Ridder, Inc. 7,874
296 New York Times Co. (The) Class A 11,914
124 Times Mirror Co. (The) 8,943
2 Tribune Co. 120
12 Washington Post Co. Class B 6,385
--------
56,060
--------
- -------------------------------------------------------------
RAILROADS (0.3%)
258 Burlington Northern Santa Fe Corp. 8,224
116 CSX Corp. 4,756
210 Norfolk Southern Corp. 5,132
138 Union Pacific Corp. 7,693
--------
25,805
--------
16 NATIONWIDE
<PAGE> 19
STATEMENT OF INVESTMENTS PRESTIGE BALANCED FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------
RAW MATERIALS (0.1%)
240 IMC Global, Inc. $ 3,060
---------
- -------------------------------------------------------------
RESTAURANTS (0.1%)
6 McDonald`s Corp. 248
---------
- -------------------------------------------------------------
RETAIL (3.3%)
80 Abercrombie & Fitch Co.* 2,180
4 Circuit City Stores-Circuit City Group 171
339 Dayton Hudson Corp. 21,908
6 Dillard`s, Inc. 113
208 Federated Department Stores, Inc.* 8,879
656 Gap, Inc. 24,354
426 Home Depot, Inc. 32,163
471 Kmart Corp.* 4,739
280 May Department Stores Co. 9,712
102 Nordstrom, Inc. 2,544
252 Penney (J.C.) Co., Inc. 6,394
359 Sears, Roebuck & Co. 10,119
308 TJX Cos., Inc. 8,355
2,124 Wal-Mart Stores, Inc. 121,334
---------
252,965
---------
- -------------------------------------------------------------
RETAIL / FOOD & DRUG (0.5%)
305 Albertson`s, Inc. 11,075
606 Kroger Co.* 12,612
374 Safeway, Inc.* 13,207
---------
36,894
---------
- -------------------------------------------------------------
SERVICES (1.6%)
550 America Online, Inc. 71,328
1,411 Cendant Corp.* 23,282
8 Computer Associates International, Inc. 452
180 E*TRADE Group, Inc.* 4,286
270 Electronic Data Systems Corp. 15,795
236 Equifax, Inc. 6,372
6 Marsh & McLennan Cos., Inc. 474
40 Ryder System, Inc. 855
451 Service Corp. International 4,313
---------
127,157
---------
- -------------------------------------------------------------
STEEL (0.1%)
228 Allegheny Teledyne, Inc. 3,463
80 USX-U.S. Steel Group, Inc. 2,045
---------
5,508
---------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------
TELECOMMUNICATIONS (6.0%)
842 AT&T Corp. $ 39,363
453 Bell Atlantic Corp. 29,417
8 Cincinnati Bell, Inc. 166
421 Global Crossing Ltd.* 14,577
603 GTE Corp. 45,225
210 Level 3 Communications, Inc.* 14,359
1,680 Lucent Technologies, Inc. 107,940
1,174 MCI WorldCom, Inc.* 100,744
2,136 SBC Communications, Inc. 108,802
2 Sprint Corp. (FON Group) 149
8 Sprint Corp. (PCS Group)* 664
---------
461,406
---------
- -------------------------------------------------------------
TIRE & RUBBER (0.1%)
192 Goodyear Tire & Rubber Co. 7,932
---------
- -------------------------------------------------------------
TRANSPORTATION (0.1%)
20 CNF Transportation, Inc. 661
---------
- -------------------------------------------------------------
UTILITIES / ELECTRIC (1.4%)
110 Allegheny Energy, Inc. 3,499
2 Ameren Corp. 76
140 Constellation Energy Group 4,296
260 Carolina Power & Light Co. 8,970
477 Central & Southwest Corp. 10,583
134 Cinergy Corp. 3,785
108 CMS Energy Corp. 3,982
190 Dominion Resources, Inc. 9,144
130 DTE Energy Co. 4,314
6 Edison International 178
224 Entergy Corp. 6,706
160 FPL Group, Inc. 8,050
110 GPU, Inc. 3,733
8 Illinova Corp. 254
4 Niagara Mohawk Holdings, Inc.* 64
110 NiSource, Inc. 2,255
2 Northeast Utilities 42
300 Northern States Power Co. 6,450
336 PG&E Corp. 7,707
76 Pinnacle West Capital Corp. 2,803
140 PP&L Resources, Inc. 3,789
120 Reliant Energy, Inc. 3,270
120 TECO Energy, Inc. 2,648
258 Texas Utilities Co. 9,998
4 Western Resources, Inc. 92
106 Wisconsin Energy Corp. 2,372
---------
109,060
---------
TOTAL COMMON STOCK (cost $4,136,988) 4,622,801
---------
NATIONWIDE 17
<PAGE> 20
STATEMENT OF INVESTMENTS PRESTIGE BALANCED FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
PRINCIPAL SECURITY VALUE
CORPORATE BONDS (3.0%)
- --------------------------------------------------------------
CHEMICALS (0.3%)
$25,000 Du Pont (E.I.) De Nemours & Co.,
6.75%, 10/15/04 $ 25,116
----------
- --------------------------------------------------------------
ENTERTAINMENT (0.4%)
30,000 Time Warner, Inc., 7.97%, 08/15/04 31,034
----------
- --------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (1.3%)
25,000 Caterpillar Financial Services Corp.,
6.875%, 08/01/04 24,891
75,000 Ford Motor Credit Co., 7.375%, 10/28/09 75,678
----------
100,569
----------
- --------------------------------------------------------------
TELECOMMUNICATIONS (1.0%)
45,000 MCI Worldcom, Inc., 6.40%, 08/15/05 43,719
30,000 U.S. West Communications,
7.20%, 11/01/04 30,250
----------
73,969
----------
TOTAL CORPORATE BONDS (cost $228,662) 230,688
----------
U.S. GOVERNMENT SPONSORED AND AGENCY
OBLIGATIONS (31.8%)
- --------------------------------------------------------------
GOVERNMENT - AGENCY (1.6%)
130,000 FHLB, 5.125%, 02/26/02 126,927
----------
Total government agency (cost $129,357) 126,927
----------
- --------------------------------------------------------------
GOVERNMENT - MORTGAGE-BACKED OBLIGATIONS (20.7%)
50,000 FHLMC, 5.125%, 10/15/08 44,887
35,000 FNMA, 6.00%, 05/15/08 33,481
145,000 FNMA, 6.625%, 09/15/09 144,288
180,000 FNMA, 6.50%, 11/15/14 176,456
55,000 FNMA, 6.16%, 08/07/28 49,530
100,000 FNMA, 6.00%, 11/15/29 93,188
610,000 FNMA, 6.50%, 11/15/29 584,456
55,000 GNMA Single-Family, Pool 781096,
6.50%, 12/15/28 52,601
289,300 GNMA Single Family. Pool 434145,
7.00%, 01/15/29 283,861
139,318 GNMA Single-Family, Pool 486311,
7.00%, 02/15/29 136,699
----------
TOTAL GOVERNMENT - MORTGAGE-BACKED OBLIGATIONS
(cost $1,617,592) 1,599,447
----------
- --------------------------------------------------------------
GOVERNMENT TREASURY (9.5%)
45,000 U.S. Treasury Bond, 8.875%, 02/15/19 56,574
135,000 U.S. Treasury Bond, 6.75%, 08/15/26 140,695
530,000 U.S. Treasury Note, 6.25%, 02/28/02 534,472
----------
Total government treasury (cost $742,064) 731,741
----------
Total U.S. government obligations (cost $2,489,013) 2,458,115
----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (13.2%)
- --------------------------------------------------------------
$1,018,000 Fifth Third Bank 5.06%, 11/01/99,
Collateralized by $1,039,000 FHLMC
Gold Pool #E00570, 6.00%,
09/01/13, market value $1,039,000
(cost $1,018,000) $1,018,000
----------
TOTAL INVESTMENTS (cost $8,143,320) $8,600,923
==========
- --------------------------------------------------------------
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
GNMA Government National Mortgage Association
COST FOR FEDERAL INCOME TAX PURPOSES: $8,147,308.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE
OF NET ASSETS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 NATIONWIDE
<PAGE> 21
PRESTIGE ADVISOR SERIES(SM)
- --------------------------------------------------------------------------------
PRESTIGE SMALL CAP FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
The total return for the Prestige Small Cap Fund (Class A) for the 12-month
period ended October 31, 1999, was 12.18%*, compared to 14.88% for the Russell
2000 Index.
For the first six months of the fiscal year, the small cap market was
clearly led by Internet stocks, which collectively reached unprecedented
valuation levels. Not surprisingly, the technology stocks were the clear leaders
over the last 12 months, dramatically outperforming other sectors. In fact, many
of the commodity- sensitive and financial stocks were hurt by the rising trend
in interest rates. As a result, small cap growth stocks were up 29.28% for the
12 months ended October as measured by the Russell 2000 Index, whereas their
value counterparts were up a mere 0.72% as measured by the Russell 2000 Value
Index. The worst performing sector during this time frame was health care stocks
related to patient management, such as HMO's. The sharp cutback in Medicare
reimbursement has put a financial squeeze on all hospitals.
The stock selection tools that were effective in this time frame were those
measuring business momentum. The companies that tended to outperform in each
sector were ones with more rapid earnings growth, and companies where analysts
were increasing earnings estimates. Conversely, stock selection tools that
measured relative valuation, such as P/E ratio, actually hurt performance. In
fact, companies with the very highest levels of valuation tended to perform the
best. This was particularly true in the first half of the fiscal year. During
the second half of the year, our stock selection tools began to perform on a
more historically normal basis and, as a result, the relative performance of the
portfolio improved.
Looking forward, we see two encouraging developments for small cap stocks.
First, they have the lowest level of valuation relative to large cap stocks that
we have seen in 20 years. This provides an important recovery opportunity.
Second, interest rates have increased sharply over the past 18 months. As rates
peak, small cap stocks should benefit, as they have in the past.
INVESCO MANAGEMENT & RESEARCH, INC.
*PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS
REINVESTED.
FUND VALUE $21,804,276
[Chart]
PORTFOLIO COMPOSITION
(Subject to Change)
Repurchase Agreement 3.5%
Common Stock 96.2%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN
(For Period Ended October 31, 1999)
CLASS A CLASS B CLASS Y(3)
YEARS W/O SC* W/SC(1) W/O SC* W/SC(2) W/O SC W/SC
- -----------------------------------------------------------------
Life 12.18% 5.73% 11.70% 6.70% 12.36% -
- -----------------------------------------------------------------
Life of the Fund is since 11/02/98.
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 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 Class Y Shares are not subject to any sales charges.
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.
[Chart]
FUND PERFORMANCE
2000
Class A Class B Class Y Russell CPI
11/98 $ 9,425 $10,000 $10,000 $10,000 $10,000
1999 $10,573 $10,670 $11,236 $11,488 $10,256
Comparative performance of $10,000 invested in the Small Cap Fund, Russell 2000
Small Stock Index (Russell 2000)* and the Consumer Price Index (CPI)** since
inception (11/02/98) to 10/31/99. Unlike our Fund, these indices do not reflect
any fees, expenses or sales charges. The Class A Shares include a front-end
sales charge.
* The Russell 2000 is comprised of approximately 2000 companies with small
market capitalizations relative to the market capitalizations of other U.S.
companies.
** The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
NATIONWIDE 19
<PAGE> 22
STATEMENT OF INVESTMENTS PRESTIGE SMALL CAP FUND
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (96.2%)
- ------------------------------------------------------------------
AEROSPACE (0.2%)
3,500 GenCorp, Inc. $ 39,812
---------
- ------------------------------------------------------------------
AIRLINES (0.5%)
3,100 America West Holdings Corp. Class A* 64,131
2,000 SkyWest, Inc. 49,625
---------
113,756
---------
- ------------------------------------------------------------------
APPAREL (0.4%)
3,900 Cato Corp. (The) Class A 44,850
2,100 Kellwood Co. 37,144
---------
81,994
---------
- ------------------------------------------------------------------
AUTO & AUTO PARTS (1.9%)
7,600 Arvin Industries, Inc. 216,600
6,600 Oshkosh Truck Corp. 198,412
---------
415,012
---------
- ------------------------------------------------------------------
BEVERAGES / ALCOHOLIC (0.4%)
1,600 Canandaigua Wine Co. Class A 96,800
---------
- ------------------------------------------------------------------
BROADCAST MEDIA / CABLE TELEVISION (0.2%)
4,500 General Cable Corp. 33,187
---------
- ------------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES (1.5%)
2,100 American Management Systems, Inc.* 54,338
1,600 Jacobs Energy Group, Inc.* 56,800
4,900 Professional Detailing, Inc.* 122,500
2,400 True North Communications, Inc. 96,750
---------
330,388
---------
- ------------------------------------------------------------------
CAPITAL GOODS (0.4%)
4,100 Milacron, Inc. 67,394
600 NACCO Industries, Inc. Class A 27,825
---------
95,219
---------
- ------------------------------------------------------------------
CHEMICALS (1.9%)
700 Fuller (H.B.) Co. 38,325
2,200 Geon Co. (The) 57,750
16,300 Grace (W.R.) & Co.* 243,481
1,700 MacDermid, Inc. 57,588
3,500 Omnova Soultions, Inc.* 24,500
---------
421,644
---------
- ------------------------------------------------------------------
COMMUNICATION EQUIPMENT (0.9%)
1,200 Carrier Access Corp.* 59,325
2,200 Harmonic, Inc.* 130,625
---------
189,950
---------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- ------------------------------------------------------------------
COMPUTER EQUIPMENT (3.3%)
3,400 Computer Task Group, Inc. $ 42,925
3,700 In Focus Systems, Inc.* 73,306
5,000 Macromedia, Inc.* 322,187
4,000 MICROS Systems, Inc.* 185,125
1,800 Xircom, Inc.* 90,788
---------
714,331
---------
- ------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (8.9%)
4,700 Aspect Development, Inc.* 166,262
2,200 AVT Corp.* 73,700
1,100 Black Box Corp.* 55,825
6,300 Broadvision, Inc.* 459,900
2,500 Clarify, Inc.* 193,125
12,700 Harbinger Corp.* 202,406
3,200 Kronos, Inc.* 143,600
7,600 Mastech Corp.* 130,150
1,800 Mercury Interactive Corp.* 146,025
1,800 MicroStrategy, Inc.* 173,925
2,700 MMC Networks, Inc.* 86,063
1,700 Pinnacle Systems, Inc.* 47,175
900 QRS Corp.* 50,063
---------
1,928,219
---------
- ------------------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (4.6%)
2,900 Carlisle Cos., Inc. 96,425
3,500 Centex Construction Products, Inc., 124,469
10,900 Elcor Corp. 268,412
3,100 EMCOR Group, Inc.* 58,125
2,500 Granite Construction, Inc. 51,719
6,900 Insituform Technologies, Inc. Class A* 165,169
3,200 NVR, Inc.* 131,200
7,200 Standard Pacific Corp. 77,400
1,300 TJ International, Inc. 40,300
---------
1,013,219
---------
- ------------------------------------------------------------------
CONSUMER DURABLES (0.4%)
3,000 Fossil, Inc.* 82,875
---------
- ------------------------------------------------------------------
CONSUMER NON-CYCLICAL (0.5%)
5,800 Tupperwarere Corp. 114,912
---------
- ------------------------------------------------------------------
DISTRIBUTION (0.5%)
3,000 United Stationers, Inc.* 76,500
3,200 Watsco, Inc. 32,400
---------
108,900
---------
- ------------------------------------------------------------------
DRUGS (3.4%)
7,000 Alpharma, Inc. Class A 246,313
5,966 Bindley Western Industries, Inc. 74,948
4,100 ChiRex, Inc.* 115,825
2,700 IDEC Pharmaceuticals Corp.* 313,706
---------
750,792
---------
20 NATIONWIDE
<PAGE> 23
STATEMENT OF INVESTMENTS PRESTIGE SMALL CAP FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------
EDUCATION (0.9%)
8,600 DeVry, Inc.* $ 181,137
1,700 Sylvan Learning Systems, Inc.* 21,994
---------
203,131
---------
- -------------------------------------------------------------
ELECTRONICS (9.5%)
8,900 Aeroflex, Inc.* 49,506
2,600 Alpha Industries, Inc.* 143,650
11,500 Amkor Technology, Inc.* 232,156
1,400 Cree Research, Inc.* 59,763
1,800 Dallas Semiconductor Corp. 105,975
4,000 DII Group, Inc. (The)* 144,000
10,600 Elantec Semiconductor, Inc.* 226,575
2,400 Lam Research Corp.* 202,650
1,800 Lattice Semiconductor Corp.* 63,675
4,400 Mercury Computer Systems, Inc.* 197,450
4,400 Pioneer-Standard Electronics, Inc. 57,475
4,600 Sawtek, Inc.* 188,600
1,550 Transwitch Corp.* 72,947
4,000 TriQuint Semiconductor, Inc.* 320,000
---------
2,064,422
---------
- -------------------------------------------------------------
ENTERTAINMENT (1.5%)
20,700 Argosy Gaming Co.* 256,162
3,100 Station Casinos, Inc.* 74,981
---------
331,143
---------
- -------------------------------------------------------------
FINANCIAL / BANKS (9.6%)
2,800 BancWest Corp. 117,075
7,800 Bank United Corp. 304,200
2,320 Commerce Bancorp, Inc. 103,965
8,400 Downey Financial Corp. 185,850
2,100 Flagstar Bancorp, Inc. 32,419
5,800 Imperial Bancorp* 143,912
9,600 New Century Financial Corp.* 131,400
9,400 OceanFirst Financial Corp. 168,025
5,900 Pacific Capital Bancorp 195,437
8,200 PFF Bancorp, Inc. 167,075
2,925 Provident Bankshares Corp. 62,979
4,700 Republic Bancorp, Inc. 61,688
2,200 Silicon Valley Bancshares* 71,775
3,400 Southwest Bancorp of Texas, Inc.* 59,075
4,800 Trustmark Corp. 109,800
5,300 Washington Federal, Inc. 120,906
1,900 Webster Financial Corp. 54,388
---------
2,089,969
---------
- -------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (2.2%)
4,000 Affiliated Managers Group, Inc.* 107,000
4,900 Americredit Corp.* 85,137
1,900 Creditrust Corp.* 33,844
3,700 Metris Cos., Inc. 127,419
1,800 Radian Group, Inc. 95,062
1,750 Southwest Securities Group, Inc. 41,672
---------
490,134
---------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -------------------------------------------------------------
FOOD & RELATED (1.3%)
2,600 Corn Products International, Inc. $ 84,662
4,700 Del Monte Foods Co.* 65,506
2,700 Earthgrains Co. (The) 61,594
3,400 Jack in the Box, Inc.* 81,813
---------
293,575
---------
- -------------------------------------------------------------
HEALTH CARE (4.7%)
1,800 CONMED Corp.* 44,887
5,200 Cytyc Corp.* 206,700
4,800 Datascope Corp.* 172,800
2,800 Gliatech, Inc.* 22,925
3,200 Hanger Orthopedic Group, Inc.* 39,400
2,900 Healthcare Realty Trust, Inc. 55,825
1,900 King Pharmaceuticals, Inc.* 57,475
3,000 Laser Vision Centers, Inc.* 25,781
7,000 LTC Properties, Inc. 74,375
2,300 MedQuist, Inc.* 73,600
2,600 Mentor Corp. 61,263
1,800 ResMed, Inc.* 62,325
3,500 Zoll Medical Corp.* 126,875
---------
1,024,231
---------
- -------------------------------------------------------------
HOME BUILDING (0.9%)
3,800 Pulte Corp. 76,475
5,300 Ryland Group, Inc. (The) 109,313
---------
185,788
---------
- -------------------------------------------------------------
HOTELS / MOTELS (1.2%)
12,200 Aztar Corp.* 118,187
4,700 Felcor Lodging Trust, Inc. 79,900
2,700 Hospitality Properties Trust 57,038
---------
255,125
---------
- -------------------------------------------------------------
INSURANCE (1.4%)
4,400 Hooper Holmes, Inc. 118,250
1,800 Horace Mann Educators Corp. 50,738
8,700 Philadelphia Consilidated Holding Corp.* 126,150
---------
295,138
---------
- -------------------------------------------------------------
INSURANCE / LIFE (1.5%)
3,416 Delphi Financial Group, Inc. 109,312
8,900 Presidential Life Corp. 163,538
2,300 UICI* 60,950
---------
333,800
---------
- -------------------------------------------------------------
LEISURE PRODUCTS (0.1%)
1,100 Bally Total Fitness Holding Corp.* 26,469
---------
NATIONWIDE 21
<PAGE> 24
STATEMENT OF INVESTMENTS PRESTIGE SMALL CAP FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -----------------------------------------------------------------------
MACHINERY (3.6%)
1,500 Advanced Energy Industries, Inc.* $ 61,687
3,700 Applied Science & Technology, Inc.* 90,650
2,400 Astec Industries, Inc.* 56,250
6,500 Graco, Inc. 217,750
2,700 Imation Corp.* 82,856
1,800 Manitowoc Co., Inc. (The) 53,775
4,600 MotivePower Industries, Inc.* 54,913
1,800 Tecumseh Products Co. 86,288
2,900 Terex Corp.* 76,669
----------
780,838
----------
- -----------------------------------------------------------------------
MANUFACTURING & CONSUMER GOODS (0.2%)
4,400 Circor International, Inc. 41,800
----------
- -----------------------------------------------------------------------
MANUFACTURING / DIVERSIFIED (1.1%)
3,400 AptarGroup, Inc. 91,375
7,800 Esterline Technologies Corp.* 107,250
3,300 JLG Industries, Inc. 42,281
----------
240,906
----------
- -----------------------------------------------------------------------
METALS (2.0%)
1,000 Gilead Sciences, Inc.* 63,187
6,200 Intermet Corp. 62,775
2,500 Ryerson Tull, Inc. 51,250
10,350 Stillwater Mining Co.* 208,294
1,600 Texas Industries, Inc. 57,300
----------
442,806
----------
- -----------------------------------------------------------------------
NATURAL GAS (0.8%)
3,000 ONEOK, Inc. 87,563
2,100 People`s Energy Corp. 79,800
----------
167,363
----------
- -----------------------------------------------------------------------
OIL & GAS / EXPLORATION & PRODUCTION (1.4%)
3,100 Basin Exploration, Inc.* 50,956
7,100 Energen Corp. 131,350
1,900 Evergreen Resources, Inc.* 41,088
1,600 Stone Energy Corp.* 77,800
----------
301,194
----------
- -----------------------------------------------------------------------
OIL / DOMESTIC (0.3%)
3,200 Valero Energy Corp. 58,800
----------
- -----------------------------------------------------------------------
OIL / INTERNATIONAL (0.4%)
2,500 HS Resources, Inc.* 39,062
1,300 Newfield Exploration Co.* 38,269
----------
77,331
----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- -----------------------------------------------------------------------
OIL EQUIPMENT & SERVICES (2.8%)
4,200 Drill-Quip, Inc.* $ 98,175
2,900 Hanover Compressor Co.* 107,300
1,400 Helmerich & Payne, Inc. 33,337
1,700 SEACOR SMIT, Inc.* 77,775
12,900 Seitel, Inc.* 102,394
4,800 Tesoro Petroleum Corp.* 58,200
8,800 Watts Industries, Inc. 120,450
----------
597,631
----------
- -----------------------------------------------------------------------
PRINTING & PUBLISHING (1.6%)
5,100 Hollinger International, Inc. 52,912
2,700 Mail-Well, Inc.* 36,113
5,800 McClatchy Co. (The) 227,650
600 Media General, Inc. Class A 32,775
----------
349,450
----------
- -----------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (2.9%)
9,800 Bedford Property Investors, Inc. 171,500
6,400 Capital Automotive REIT* 81,600
4,300 Gables Residential Trust 104,006
3,900 Kilroy Realty Corp. 74,831
3,000 Macerich Co. (The) 60,000
3,700 Prentiss Properties Trust 79,319
3,400 SL Green Realty Corp. 61,838
----------
633,094
----------
- -----------------------------------------------------------------------
RESTAURANTS (1.5%)
5,250 CEC Entertainment, Inc.* 168,328
2,400 Cheesecake Factory, Inc. (The)* 73,500
3,600 NPC International, Inc.* 43,200
1,800 RARE Hospitality International, Inc. * 35,888
----------
320,916
----------
- -----------------------------------------------------------------------
RETAIL (3.5%)
4,700 Ethan Allen Interiors, Inc. 167,144
2,800 Footstar, Inc.* 98,000
3,900 Genesco, Inc.* 51,675
2,900 Haverty Furniture Co., Inc. 39,875
3,300 OshKosh B`Gosh, Inc. 67,650
2,800 Quiksilver, Inc.* 39,550
2,500 ShopKo Stores, Inc.* 62,656
2,500 Whitehall Jewellers, Inc.* 65,156
4,100 Zale Corp.* 171,688
----------
763,394
----------
- -----------------------------------------------------------------------
SERVICES (2.2%)
1,500 AHL Services, Inc.* 28,500
3,300 Jefferies Group, Inc. 70,331
4,400 Lason, Inc.* 163,488
6,800 Pre-Paid Legal Services, Inc.* 164,900
4,100 Sybase, Inc.* 55,350
----------
482,569
----------
22 NATIONWIDE
<PAGE> 25
STATEMENT OF INVESTMENTS PRESTIGE SMALL CAP FUND CONTINUED
- --------------------------------------------------------------------------------
October 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------
STEEL (0.9%)
2,500 AK Steel Holding Corp. $ 43,281
5,900 Oregon Steel Mills, Inc. 49,781
6,500 Worthington Industries, Inc. 108,063
-----------
201,125
-----------
- --------------------------------------------------------------
TELECOMMUNICATIONS (2.3%)
4,000 Polycom, Inc.* 200,000
11,195 Price Communications Corp.* 243,491
1,800 US LEC Corp. Class A* 49,838
-----------
493,329
-----------
- --------------------------------------------------------------
TEXTILES (0.8%)
4,600 Springs Industries, Inc. Class A 183,137
-----------
- --------------------------------------------------------------
TOBACCO (0.4%)
3,500 Universal Corp. 82,250
-----------
- --------------------------------------------------------------
TRANSPORTATION (0.9%)
8,300 Dollar Thrifty Automotive Group, Inc.* 140,062
3,700 Werner Enterprises, Inc. 58,969
-----------
199,031
-----------
- --------------------------------------------------------------
UTILITIES / ELECTRIC (1.9%)
3,000 Cleco Corp. 99,375
2,700 Hawaiian Electric Industries, Inc. 91,294
13,000 Public Service Co. of New Mexico 232,375
-----------
423,044
-----------
TOTAL COMMON STOCK (cost $20,563,020) 20,963,943
-----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (3.5%)
- --------------------------------------------------------------
$766,000 Fifth Third Bank 5.06%, 11/01/99,
Collateralized by $782,000 FHLMC
Gold Pool #E00570, 6.00%,
09/01/13, market value $782,000
(cost $766,000) $ 766,000
-----------
TOTAL INVESTMENTS (cost $21,329,020) $21,729,943
===========
- --------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLMC Federal Home Loan Mortgage Corp.
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $21,344,378.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NATIONWIDE 23
<PAGE> 26
PRESTIGE ADVISOR SERIES(SM)
- --------------------------------------------------------------------------------
PRESTIGE INTERNATIONAL FUND
Management Discussion of Fund Performance
The total return for the Prestige International Fund (Class A) for the
12-month period ended October 31, 1999, was 17.33%*, compared to 23.03% for the
MSCI/EAFE Index.
In the third quarter, international equity markets rose 4.4%, outperforming
the falling U.S. market by 11%, the widest quarterly margin in more than a
decade. Investors shifted their attention to international markets where
valuations appeared less stretched and companies took action to improve their
financial productivity. The European equity market overcame a surprise interest
rate hike in the U.K. to edge higher on merger and acquisition activity that was
considerable both in size and novelty, but Japan was the main international
performance driver. The Japanese equity market raced 15.8% higher during the
third quarter as the local economy continued to show signs of recovery and
companies embraced change. The burgeoning recovery attracted foreign capital
into Japan and drove the yen to its highest level versus the U.S. dollar since
1995. While many are concerned that a strong yen could stall Japan's recovery,
the key remains change at the company level, as it does in Europe.
Within the Fund, stock selection in Japan was the primary contributor to
performance throughout 1999, through the fiscal year end on October 31. The
Fund's best performer over the past year was Sumitomo Trust & Bank, as banking
industry consolidation drove the stock higher. One of the largest negative
performance drivers was British Aerospace, which suffered amid concerns over
competitive implications of the Dasa/Aerospatiale Matra merger, as well as the
backwash of profit warnings in the U.S.
Economic hopes and concerns may influence stock price movements, but
corporate actions to improve financial productivity and strategic positioning in
a world of heightening global competition remain the most enduring performance
driver. Amid this changing landscape, we will continue to root out the most
financially productive companies, with a particular focus on those companies
that are positioning themselves to compete on an international basis.
LAZARD ASSET MANAGEMENT
*PERFORMANCE WITHOUT SALES CHARGE AND ASSUMING ALL DISTRIBUTIONS REINVESTED.
FUND VALUE $14,589,425
[Chart]
PORTFOLIO COMPOSITION
(Subject to Change)
Repurchase Agreement 3.6%
Common Stock 95.1%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN
(For Period Ended October 31, 1999)
CLASS A CLASS B CLASS Y(3)
YEARS W/O SC* W/SC(1) W/O SC* W/SC(2) W/O SC W/SC
- -------------------------------------------------------------------
Life 17.33% 10.58% 16.58% 11.58% 17.57% -
- -------------------------------------------------------------------
Life of the Fund is since 11/02/98.
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 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 Class Y Shares are not subject to any sales charges.
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.
[Chart]
FUND PERFORMANCE
CPI Class B Class A Class Y MSCI/EAFF
11/98 $10,000 $10,000 $ 9,425 $10,000 $10,000
1999 $10,256 $11,058 $11,158 $11,757 $12,303
Comparative performance of $10,000 invested in the International Fund, Morgan
Stanley Capital International - Europe, Australia, and Far East Index
(MSCI/EAFE)* and the Consumer Price Index (CPI)** since inception (11/02/98) to
10/31/99. Unlike our Fund, these indices do not reflect any fees, expenses or
sales charges. The Class A Shares include a front-end sales charge.
* The MSCI/EAFE is an unmanaged index generally representative of the
performance of international stock markets.
** The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
24 NATIONWIDE
<PAGE> 27
STATEMENT OF INVESTMENTS PRESTIGE INTERNATIONAL FUND
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (95.1%)
- --------------------------------------------------------------------------------
AUSTRALIA (1.7%)
Metals (1.7%)
23,400 Broken Hill Proprietary Co. Ltd. $ 241,664
---------
- --------------------------------------------------------------------------------
DENMARK (1.5%)
Telecommunications (1.5%)
3,500 Tele Danmark AS 212,316
---------
- --------------------------------------------------------------------------------
FINLAND (0.9%)
Financial / Banks (0.4%)
9,600 Merita PLC 55,598
---------
Paper & Forest Products (0.5%)
2,200 UPM-Kymmene OYJ 69,372
---------
Total Finland 124,970
---------
- --------------------------------------------------------------------------------
FRANCE (13.1%)
Construction & Building Materials (2.3%)
1,100 Compagnie de Saint Gobain 190,771
860 Suez Lyonnaise des Eaux 138,753
---------
329,524
---------
Drugs (1.5%)
4,000 Rhone-Poulenc SA 223,670
---------
Financial / Banks (1.7%)
2,900 Banque Nationale de Paris 254,520
---------
Insurance (1.6%)
1,650 Axa 232,568
---------
Oil / International (2.2%)
2,338 Total Fina SA 315,783
---------
Services (1.4%)
2,677 Vivendi 202,731
---------
Telecommunications (1.9%)
1,800 Alcatel 280,954
---------
Tire & Rubber (0.5%)
1,700 Compagnie Generale des
Etablissements Michelin 73,975
---------
TOTAL FRANCE 1,913,725
---------
- --------------------------------------------------------------------------------
GERMANY (10.3%)
Airlines (0.9%)
6,100 Deutsche Lufthansa AG 128,232
---------
Chemicals (1.4%)
238 Celanese AG* 3,746
4,330 Hoechst AG 191,104
---------
194,850
---------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------------------------
GERMANY (CONTINUED)
Insurance (1.4%)
657 Allianz AG $ 198,951
---------
Manufacturing & Consumer Goods (2.4%)
2,610 Siemens AG 234,692
5,000 Thyssen Krupp AG* 118,247
---------
352,939
---------
Motor Vehicles (1.3%)
2,500 DaimlerChrysler AG 193,951
---------
Retail (1.2%)
3,400 Metro AG 180,471
---------
Telecommunications (0.5%)
1,580 Deutsche Telekom AG 72,822
---------
Utilities / Electric (1.2%)
3,280 Veba AG 177,514
---------
TOTAL GERMANY 1,499,730
---------
- --------------------------------------------------------------------------------
ITALY (2.5%)
Financial / Banks (0.5%)
5,700 San Paolo - IMI SPA 73,811
---------
Oil / International (1.1%)
27,400 ENI SPA 160,126
---------
Telecommunications (0.9%)
27,400 Telecom Italia SPA 134,495
---------
TOTAL ITALY 368,432
---------
- --------------------------------------------------------------------------------
JAPAN (25.9%)
Beverages / Alcoholic (1.5%)
15,000 Asahi Breweries Ltd. 213,156
---------
Business Equipment & Services (1.3%)
7,000 Canon, Inc. 197,873
---------
Consumer Non-Cyclical (1.4%)
7,000 KAO Corp. 213,300
---------
Drugs (1.0%)
5,000 Sankyo Co. Ltd. 142,296
---------
Electronics (3.6%)
2,200 Sony Corp. 342,775
1,860 TDK Corp. ADR 179,839
---------
522,614
---------
Financial / Banks (5.5%)
14,000 Fuji Bank Ltd. (The) 191,836
18,000 Industrial Bank of Japan Ltd. (The) 243,197
36,000 Sumitomo Trust & Banking Co.
Ltd. (The) 367,727
---------
802,760
---------
NATIONWIDE 25
<PAGE> 28
STATEMENT OF INVESTMENTS PRESTIGE INTERNATIONAL FUND CONTINUED
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------------------------
JAPAN (CONTINUED)
Financial / Miscellaneous (2.9%)
1,900 Orix Corp. $ 254,887
2,500 Promise Co. Ltd. 167,689
---------
422,576
---------
Leisure Products (1.2%)
1,100 Nintendo Co. Ltd. 174,444
---------
Motor Vehicles (1.7%)
41,000 Nissan Motor Co. Ltd. 245,544
---------
Telecommunications (4.7%)
15 Nippon Telegraph & Telephone Corp. 229,973
17 NTT Mobile Communications
Network, Inc. 451,227
---------
681,200
---------
Tobacco (1.1%)
15 Japan Tobacco, Inc. 165,293
---------
TOTAL JAPAN 3,781,056
---------
- --------------------------------------------------------------------------------
NETHERLANDS (3.8%)
Beverages / Alcoholic (1.2%)
3,500 Heineken NV 178,384
---------
Electronics (1.2%)
1,672 Koninklijke (Royal) Philips
Electronics NV 171,348
---------
Financial / Banks (1.4%)
3,580 ING Groep NV 211,022
---------
TOTAL NETHERLANDS 560,754
---------
- --------------------------------------------------------------------------------
SINGAPORE (1.9%)
Financial / Banks (1.9%)
15,450 Oversea-Chinese Banking Corp. Ltd. 116,075
21,000 United Overseas Bank Ltd. 159,033
---------
TOTAL SINGAPORE 275,108
---------
- --------------------------------------------------------------------------------
SPAIN (3.8%)
Financial / Banks (0.1%)
800 Argentaria, Caja Postal y Banco
Hipotecario de Espana SA 17,742
---------
Telecommunications (2.4%)
21,016 Telefonica SA 345,481
---------
Utilities / Electric (1.3%)
9,200 Endesa SA 184,019
---------
TOTAL SPAIN 547,242
---------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------------------------
SWEDEN (3.0%)
Auto & Auto Parts (0.3%)
1,700 Volvo AB Class B $ 43,851
--------
Consumer Durables (1.1%)
8,300 Electrolux AB 165,230
--------
Financial / Banks (1.6%)
9,000 Nordbanken Holding AB 52,438
13,000 Svenska Handelsbanken AB 179,894
--------
232,332
--------
TOTAL SWEDEN 441,413
--------
- --------------------------------------------------------------------------------
SWITZERLAND (3.9%)
Drugs (1.4%)
17 Roche Holding AG 204,174
--------
Insurance (1.1%)
290 Zurich Allied AG 164,252
--------
Manufacturing & Consumer Goods (1.4%)
2,031 ABB Ltd. 204,606
--------
TOTAL SWITZERLAND 573,032
--------
- --------------------------------------------------------------------------------
UNITED KINGDOM (22.8%)
Aerospace (1.6%)
40,200 British Aerospace PLC 234,511
--------
Auto & Auto Parts (0.3%)
3,000 GKN PLC 47,949
--------
Beverages / Alcoholic (1.2%)
18,000 Diageo PLC 181,654
--------
Chemicals (1.2%)
17,200 Imperial Chemical Industries, Inc. 170,758
--------
Drugs (2.4%)
5,342 AstraZeneca Group PLC 241,240
8,600 Smithkline Beecham PLC 110,640
--------
351,880
--------
Financial / Banks (3.4%)
11,500 Halifax Group PLC 146,722
14,800 HSBC Holdings PLC 177,630
7,300 National Westminster Bank PLC 164,591
--------
488,943
--------
Food & Related (1.9%)
17,700 Cadbury Schweppes PLC 115,817
17,739 Unilever PLC 164,320
--------
280,137
--------
26 NATIONWIDE
<PAGE> 29
STATEMENT OF INVESTMENTS PRESTIGE INTERNATIONAL FUND CONTINUED
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
- --------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Insurance (2.9%)
10,300 Allied Zurich PLC $ 124,229
9,400 Prudential Corp. PLC 147,232
21,836 Royal & Sun Alliance
Insurance Group PLC 148,344
----------
419,805
----------
Manufacturing & Consumer Goods (1.0%)
29,100 Invensys PLC 142,778
----------
Oil / International (1.5%)
22,400 BP Amoco PLC 217,053
----------
Printing & Publishing (0.9%)
23,100 Reed International PLC 134,567
----------
Retail (1.0%)
19,400 Great Universal Stores PLC 147,076
----------
Retail / Food & Drug (0.5%)
23,400 Tesco PLC 69,501
----------
Services (1.3%)
25,100 Granada Group PLC 198,115
----------
Tobacco (0.9%)
19,900 British American Tobacco PLC 131,600
----------
Utilities / Electric (0.8%)
16,778 British Energy PLC* 113,845
----------
TOTAL UNITED KINGDOM 3,330,172
----------
TOTAL COMMON STOCK (COST $13,264,740) 13,869,614
----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (3.6%)
- --------------------------------------------------------------------------------
$529,000 Fifth Third Bank 5.06%, 11/01/99,
Collateralized by $540,000 FHLMC
Gold Pool #E00570, 6.00%,
09/01/13, market value $540,000
(cost $529,000) $ 529,000
----------
TOTAL INVESTMENTS (COST $13,793,740) $14,398,614
==========
- --------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
AB Aktiebolag (Swedish stock exchange)
ADR American Depositary Receipt
AG Aktiengesellschaft (German, or Swiss Stock Cos.)
AS Limited
FHLMC Federal Home Loan Mortgage Corp.
NV Naamloze Vennootschap (Dutch Corp.)
OYJ Limited
PLC Public Limited Company (British, Finnish, or Irish)
SA Societe Anonyme (French, Belgian Corp., Swiss, Spanish
or Portuguese Corp.)
SPA Societa per Azioni (Italian Corp.)
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $13,810,985.
PORTFOLIO HOLDING PERCENTAGES REPRESENT MARKET VALUE AS A PERCENTAGE OF NET
ASSETS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
NATIONWIDE 27
<PAGE> 30
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------
OCTOBER 31, 1999
PRESTIGE PRESTIGE PRESTIGE
LARGE CAP LARGE CAP BALANCED
VALUE FUND GROWTH FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (cost $26,930,753, $35,966,246,
$7,125,319) $ 26,117,881 $38,394,201 $7,582,923
Repurchase agreements (cost $575,000, $715,000, $1,018,000) 575,000 715,000 1,018,000
Cash 411 145 640
Receivable for Fund shares sold 2,094 73,483 45,671
Receivable for futures variation margin 70,700 54,045 -
Receivable for investment securities sold 1,971,855 1,134,000 1,141,729
Accrued interest and dividends receivable 29,036 15,968 24,961
Restricted Cash 112,500 101,828 -
Withholding tax reclaim receivable - 21 75
------------ ----------- ----------
Total assets 28,879,477 40,488,691 9,813,999
------------ ----------- ----------
LIABILITIES
Payable for investment securities purchased 1,187,613 715,000 2,060,235
Payable for Fund shares redeemed 857,269 532,932 -
Accrued management fees 16,475 25,160 4,711
Accrued fund administration fees 6,387 6,387 6,387
Accrued transfer agent fees, Class A Shares 26 765 284
Accrued transfer agent fees, Class B Shares 338 1,204 344
Accrued transfer agent fees, Class Y Shares 5 35 25
Accrued distribution fees, Class A Shares 5,349 6,796 516
Accrued distribution fees, Class B Shares 104 850 1,716
Accrued administrative servicing fees, Class A Shares 2,985 3,613 19
Accrued administrative servicing fees, Class Y Shares 108 768 215
Other accrued expenses 9,762 11,866 20,821
------------ ----------- ----------
Total liabilities 2,086,421 1,305,376 2,095,273
------------ ----------- ----------
NET ASSETS $26,793,056 $39,183,315 $7,718,726
============ =========== ==========
NET ASSETS REPRESENTED BY:
Capital $27,617,009 $36,344,137 $7,105,132
Net unrealized appreciation (depreciation) from investments and futures (723,625) 2,484,610 457,604
Accumulated undistributed (distributions in excess of) net realized
gain (loss) from investments and futures (101,097) 354,568 139,859
Accumulated undistributed (distributions in excess of) net investment
income 769 - 16,131
------------ ----------- ----------
NET ASSETS $26,793,056 $39,183,315 $7,718,726
------------ ----------- ----------
NET ASSETS:
Class A Shares $25,882,537 $33,409,513 $2,531,840
Class B Shares 155,466 1,178,961 2,107,234
Class Y Shares 755,053 4,594,841 3,079,652
------------ ----------- ----------
Total $26,793,056 $39,183,315 $7,718,726
============ =========== ==========
SHARES OUTSTANDING (unlimited number of shares authorized)
Class A Shares 2,508,466 2,460,875 227,547
Class B Shares 15,182 87,362 188,105
Class Y Shares 72,934 337,965 276,675
------------ ----------- ----------
Total 2,596,582 2,886,202 692,327
============ =========== ==========
NET ASSET VALUE PER SHARE:
Class A Shares $ 10.32 $ 13.58 $ 11.13
Class B Shares $ 10.24 $ 13.50 $ 11.20
Class Y Shares $ 10.35 $ 13.60 $ 11.13
OFFERING PRICE (100%/(100%-Maximum Sales Charge)
of net asset value adjusted to nearest cent) per share
Class A Shares* $ 10.95 $ 14.41 $ 11.81
Class B Shares** $ 10.24 $ 13.50 $ 11.20
Class Y Shares*** $ 10.35 $ 13.60 $ 11.13
------------ ----------- ----------
Maximum front-end sales charge - Class A Shares 5.75% 5.75% 5.75%
============ =========== ==========
- -----------------------------------------------------------------------------------------------------------------------
* CLASS A SHARES INCLUDE A FRONT-END SALES CHARGE.
** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD.
*** CLASS Y SHARES ARE NOT SUBJECT TO A FRONT-END SALES CHARGE.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
28 NATIONWIDE
<PAGE> 31
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES CONTINUED
- ------------------------------------------------------------------------------------------------------------------------
OCTOBER 31, 1999
PRESTIGE PRESTIGE
SMALL CAP INTERNATIONAL
FUND FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities, at value (cost $20,563,020, $13,264,740) $20,963,943 $ 13,869,614
Repurchase agreements (cost $766,000, $529,000) 766,000 529,000
Foreign currency, at value (cost $2,955) - 2,955
Cash 947 5,737
Receivable for Fund shares sold 197,768 192,829
Receivable for investment securities sold 665,000 566,066
Accrued interest and dividends receivable 17,313 19,421
Withholding tax reclaim receivable - 4,129
----------- ------------
Total assets 22,610,971 15,189,751
----------- ------------
LIABILITIES
Payable for investment securities purchased 766,000 544,617
Payable for Fund shares redeemed 1,091 11,348
Payable for foreign currency contracts - 640
Payable for translation of assets and liabilities in foreign currencies - 243
Accrued management fees 16,859 10,124
Accrued fund administration fees 6,387 6,387
Accrued transfer agent fees, Class A Shares - 82
Accrued transfer agent fees, Class B Shares 179 126
Accrued transfer agent fees, Class Y Shares 14 5
Accrued distribution fees, Class A Shares 4,060 2,846
Accrued distribution fees, Class B Shares 162 36
Accrued administrative servicing fees, Class A Shares 2,268 1,557
Accrued administrative servicing fees, Class Y Shares 198 96
Other accrued expenses 9,477 22,219
----------- ------------
Total liabilities 806,695 600,326
----------- ------------
NET ASSETS $21,804,276 $14,589,425
=========== ============
NET ASSETS REPRESENTED BY:
Capital $21,223,752 $13,866,699
Net unrealized appreciation from investments
and translation of assets and liabilities
in foreign currencies 400,923 603,990
Accumulated undistributed net realized gain (loss)
from investments and foreign currency transactions 179,087 119,323
Accumulated undistributed (distributions in excess of) net investment income 514 (587)
----------- ------------
Net assets $21,804,276 $14,589,425
=========== ============
Net assets:
Class A Shares $19,830,398 $13,861,552
Class B Shares 214,733 58,692
Class Y Shares 1,759,145 669,181
----------- ------------
Total $21,804,276 $14,589,425
=========== ============
SHARES OUTSTANDING (unlimited number of shares authorized):
Class A Shares 1,772,626 1,189,856
Class B Shares 19,223 4,907
Class Y Shares 157,100 57,328
----------- ------------
Total 1,948,949 1,252,091
=========== ============
NET ASSET VALUE PER SHARE:
Class A Shares $ 11.19 $ 11.65
Class B Shares $ 11.17 $ 11.96
Class Y Shares $ 11.20 $ 11.67
OFFERING PRICE (100%/(100%-Maximum Sales Charge) of net asset value
adjusted to nearest cent) per share
Class A Shares* $ 11.87 $ 12.36
Class B Shares** $ 11.17 $ 11.96
Class Y Shares*** $ 11.20 $ 11.67
----------- ------------
Maximum front-end sales charge - Class A Shares 5.75% 5.75%
=========== ============
- -----------------------------------------------------------------------------------------------------------------------
* CLASS A SHARES INCLUDE A FRONT-END SALES CHARGE.
** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD.
*** CLASS Y SHARES ARE NOT SUBJECT TO A FRONT-END SALES CHARGE.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NATIONWIDE 29
<PAGE> 32
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999
PRESTIGE PRESTIGE PRESTIGE
LARGE CAP LARGE CAP BALANCED
VALUE FUND GROWTH FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $121,068 $ 75,690 $ 52,133
Interest 39,454 30,287 147,708
Withholding tax - (40) -
--------- --------- --------
Total income 160,522 105,937 199,841
--------- --------- --------
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment management fees 62,525 89,668 48,069
Distribution fees, Class A Shares 13,930 17,883 5,160
Distribution fees, Class B Shares 12,165 12,247 18,713
Fund administration fees 75,000 75,000 75,000
Transfer agent fees, Class A Shares 478 2,858 801
Transfer agent fees, Class B Shares 763 4,088 801
Transfer agent fees, Class Y Shares 156 283 247
Administrative servicing fees, Class A Shares 6,093 7,497 40
Administrative servicing fees, Class Y Shares 3,236 6,543 4,589
Shareholders' reports 9,500 7,515 12,000
Registration fees 26,000 26,345 26,000
Professional services 15,200 16,393 15,200
Custodian fees 6,000 8,020 12,200
Trustees' fees and expenses 156 134 174
Other 3,453 9,301 13,308
--------- --------- --------
Total expenses before waived or reimbursed expenses 234,655 283,775 232,302
Total waived or reimbursed expenses (131,865) (143,912) (151,435)
--------- --------- --------
Net expenses 102,790 139,863 80,867
--------- --------- --------
NET INVESTMENT INCOME (LOSS) $ 57,732 $(33,926) $118,974
========= ========= ========
- -----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from investments
and futures $(101,097) $388,494 $139,859
Net change in unrealized appreciation
(depreciation) on investments and futures (723,625) 2,484,610 457,604
--------- --------- --------
Net realized and unrealized gain (loss) from
investments and futures (824,722) 2,873,104 597,463
--------- --------- --------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM OPERATIONS $(766,990) $2,839,178 $716,437
========= ========= ========
- -----------------------------------------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 NATIONWIDE
</TABLE>
<PAGE> 33
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS CONTINUED
- -----------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999
PRESTIGE PRESTIGE
SMALL CAP INTERNATIONAL
FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Dividends $84,356 $95,304
Interest 27,046 26,416
Withholding tax (7) (5,228)
-------- --------
Total income 111,395 116,492
-------- --------
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment management fees 64,998 45,208
Distribution fees, Class A Shares 10,600 8,068
Distribution fees, Class B Shares 8,944 8,962
Fund administration fees 75,000 75,000
Transfer agent fees, Class A Shares 500 308
Transfer agent fees, Class B Shares 700 308
Transfer agent fees, Class Y Shares 171 120
Administrative servicing fees, Class A Shares 4,651 3,221
Administrative servicing fees, Class Y Shares 3,741 2,477
Shareholders' reports 9,432 7,300
Registration fees 26,000 26,153
Professional services 15,197 16,338
Custodian fees 10,497 35,849
Trustees' fees and expenses 135 165
Other 6,744 6,331
-------- --------
Total expenses before waived or reimbursed expenses 237,310 235,808
Total waived or reimbursed expenses (140,626) (160,537)
-------- --------
Net expenses 96,684 75,271
-------- --------
- -----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) $14,711 $41,221
======== ========
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain from investments
and foreign currency transactions $179,087 $96,323
Net change in unrealized appreciation
on investments and translation of assets
and liabilities in foreign currencies 400,923 603,990
-------- --------
Net realized and unrealized gain from
investments and foreign currencies 580,010 700,313
-------- --------
NET INCREASE IN ASSETS RESULTING FROM OPERATIONS $ 594,721 $ 741,534
======== ========
- -----------------------------------------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NATIONWIDE 31
<PAGE> 34
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999
PRESTIGE PRESTIGE PRESTIGE
LARGE CAP LARGE CAP BALANCED
VALUE FUND GROWTH FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $ 57,732 $ (33,926) $ 118,974
Net realized gain (loss) from investments and futures (101,097) 388,494 139,859
Net change in unrealized appreciation (depreciation)
on investments and futures (723,625) 2,484,610 457,604
---------- ---------- ---------
Net increase (decrease) in net assets resulting
from operations (766,990) 2,839,178 716,437
---------- ---------- ---------
- -----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (47,051) - (40,667)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (1,352) - (8,769)
DISTRIBUTIONS TO CLASS Y SHAREHOLDERS FROM:
Net investment income (8,560) - (53,407)
---------- ---------- ---------
DECREASE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (56,963) - (102,843)
---------- ---------- ---------
- ------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares 34,485,142 48,565,205 7,357,732
Net asset value of shares issued to shareholders
from reinvestment of dividends 56,963 - 102,843
Cost of shares redeemed (6,925,096) (12,221,068) (355,443)
---------- ---------- ---------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS 27,617,009 36,344,137 7,105,132
---------- ---------- ---------
NET INCREASE IN NET ASSETS 26,793,056 39,183,315 7,718,726
NET ASSETS--BEGINNING OF PERIOD - - -
---------- ---------- ---------
NET ASSETS--END OF PERIOD $26,793,056 $39,183,315 $7,718,726
========== ========== =========
Undistributed (distributions in excess of) net realized
gain on investments and futures at end of period $ (101,097) $ 354,568 $ 139,859
========== ========== =========
Undistributed (distributions in excess of) net investment
income included in net assets at end of period $ 769 $ - $ 16,131
========== ========== =========
SHARE ACTIVITY:*
Shares sold 3,241,641 3,828,192 714,777
Reinvestment of dividends 5,617 - 9,526
Shares redeemed (650,676) (941,990) (31,976)
---------- ---------- ---------
Net increase in number of shares 2,596,582 2,886,202 692,327
========== ========== =========
- ------------------------------------------------------------------------------------------------------------------------
* BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT
CLASSES A, B, AND Y SHARES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
32 NATIONWIDE
<PAGE> 35
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS CONTINUED
- ------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999
Prestige Prestige
Small Cap International
Fund Fund
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets:
OPERATIONS:
Net investment income $ 14,711 $ 41,221
Net realized gain from investments and
foreign currency transactions 179,087 96,323
Net change in unrealized appreciation
on investments and translation of assets
and liabilities in foreign currencies 400,923 603,990
----------- -----------
Net increase in net assets resulting
from operations 594,721 741,534
----------- -----------
- ------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (9,191) (7,780)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income - (653)
DISTRIBUTIONS TO CLASS Y SHAREHOLDERS FROM:
Net investment income (5,006) (10,375)
----------- -----------
DECREASE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (14,197) (18,808)
----------- -----------
- ------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares 26,363,039 20,167,857
Net asset value of shares issued to shareholders
from reinvestment of dividends 14,212 18,805
Cost of shares redeemed (5,153,499) (6,319,963)
----------- -----------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS 21,223,752 13,866,699
----------- -----------
NET INCREASE IN NET ASSETS 21,804,276 14,589,425
NET ASSETS--BEGINNING OF PERIOD - -
----------- -----------
NET ASSETS--END OF PERIOD $21,804,276 $14,589,425
----------- -----------
Undistributed net realized gain on investments
and foreign currency transactions
included in net assets at end of period $ 179,087 $ 119,323
=========== ===========
Undistributed net investment income
included in net assets at end of period $ 514 $ (587)
=========== ===========
SHARE ACTIVITY:*
Shares sold 2,410,464 1,801,109
Reinvestment of dividends 1,349 1,754
Shares redeemed (462,864) (550,772)
----------- -----------
Net increase in number of shares 1,948,949 1,252,091
=========== ===========
- ------------------------------------------------------------------------------------------------------------------------
* Both the Capital Share Transactions and Share Activity sections represent
Classes A, B, and Y Shares.
</TABLE>
See accompanying notes to financial statements.
NATIONWIDE 33
<PAGE> 36
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
PRESTIGE LARGE CAP VALUE FUND
PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999 CLASS A SHARES CLASS B SHARES CLASS Y SHARES
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD 10.00 $10.00 $10.00
Net investment income 0.07 (0.02) 0.08
Net realized gain (loss) and unrealized
appreciation (depreciation) 0.32 0.27 0.33
------ ------ ------
Total from investment operations 0.39 0.25 0.41
------ ------ ------
Dividends from net investment income (0.07) (0.01) (0.06)
Total distributions (0.07) (0.01) (0.06)
------ ------ ------
Net increase in net asset value 0.32 0.24 0.35
------ ------ ------
NET ASSET VALUE--END OF PERIOD $10.32 $ 10.24 $ 10.35
====== ====== ======
Total Return (excluding sales charges) 3.86% 2.50% 4.05%
Net Assets, End of Period (000) $ 25,883 $ 155 $ 755
Ratio of expenses to average net assets (a) 1.15% 1.90% 1.00%
Ratio of expenses to average net assets* (a) 1.87% 5.34% 4.21%
Ratio of net investment income to average net assets (a) 0.85% (0.13%) 0.77%
Ratio of net investment income to average net assets* (a) 0.13% (3.57%) (2.44%)
Portfolio turnover (b) 120.94% 120.94% 120.94%
- -----------------------------------------------------------------------------------------------------------------------------
PRESTIGE LARGE CAP GROWTH FUNG
PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999 CLASS A SHARES CLASS B SHARES CLASS Y SHARES
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 10.00
Net investment loss (0.04) (0.12) (0.01)
Net realized gain (loss) and unrealized
appreciation (depreciation) 3.62 3.62 3.61
------ ------ ------
Net increase in net asset value 3.58 3.50 3.60
------ ------ ------
NET ASSET VALUE--END OF PERIOD $ 13.58 $ 13.50 $ 13.60
====== ====== ======
Total Return (excluding sales charges) 35.80% 35.00% 36.00%
Net Assets, End of Period (000) $ 33,410 $1,179 $ 4,594
Ratio of expenses to average net assets (a) 1.20% 1.95% 1.05%
Ratio of expenses to average net assets* (a) 1.69% 5.26% 3.46%
Ratio of net investment income (loss) to average net assets (a) (0.27%) (0.97%) (0.09%)
Ratio of net investment income to average net assets* (a) (0.76%) (4.28%) (2.49%)
Portfolio turnover (b) 65.27% 65.27% 65.27%
- -----------------------------------------------------------------------------------------------------------------------------
*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.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
</TABLE>
34 NATIONWIDE
<PAGE> 37
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
PRESTIGE LARGE CAP GROWTH FUND
PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999 CLASS A SHARES CLASS B SHARES CLASS Y SHARES
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE-BEGINNING OF PERIOD $ 10.00 $10.00 $10.00
Net investment income 0.22 0.13 0.22
Net realized gain (loss) and unrealized
appreciation (depreciation) 1.12 1.12 1.13
-------- -------- -------
Total from investment operations 1.34 1.25 1.35
-------- -------- -------
Dividends from net investment income (0.21) (0.05) (0.22)
Net increase in net asset value 1.13 1.20 1.13
-------- -------- -------
NET ASSET VALUE-END OF PERIOD $ 11.13 $ 11.20 $ 11.13
======== ======== =======
Total Return (excluding sales charges) 13.47% 12.54% 13.62%
Net Assets, End of Period (000) $ 2,532 $2,107 $3,080
Ratio of expenses to average net assets (a) 1.10% 1.85% 0.95%
Ratio of expenses to average net assets(*) (a) 3.44% 4.25% 3.30%
Ratio of net investment income to average net assets (a) 2.02% 1.25% 2.17%
Ratio of net investment income to average net assets(*) (a) (0.31%) (1.15%) (0.18%)
Portfolio turnover (b) 205.14% 205.14% 205.14%
- -----------------------------------------------------------------------------------------------------------------------------
PRESTIGE SMALL CAP FUND
PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999 CLASS A SHARES CLASS B SHARES CLASS Y SHARES
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE-BEGINNING OF PERIOD $ 10.00 $10.00 $10.00
Net investment income (loss) 0.03 (0.05) 0.04
Net realized gain (loss) and unrealized
appreciation (depreciation) 1.19 1.22 1.19
-------- -------- -------
Total from investment operations 1.22 1.17 1.23
-------- -------- -------
Dividends from net investment income (0.03) - (0.03)
Net increase in net asset value 1.19 1.17 1.20
-------- -------- -------
NET ASSET VALUE-END OF PERIOD $ 11.19 $11.17 $11.20
======== ======== =======
Total Return (excluding sales charges) 12.18% 11.70% 12.36%
Net Assets, End of Period (000) $19,830 $ 215 $1,759
Ratio of expenses to average net assets (a) 1.35% 2.10% 1.20%
Ratio of expenses to average net assets(*) (a) 2.24% 6.57% 4.87%
Ratio of net investment income to average net assets (a) 0.29% (0.46%) 0.39%
Ratio of net investment income to average net assets(*) (a) (0.61%) (4.93%) (3.27%)
Portfolio turnover (b) 81.24% 81.24% 81.24%
- -----------------------------------------------------------------------------------------------------------------------------
(*)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.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
</TABLE>
NATIONWIDE 35
<PAGE> 38
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
PRESTIGE INTERNATIONAL FUND
PERIOD FROM NOVEMBER 2, 1998 TO OCTOBER 31, 1999 CLASS A SHARES CLASS B SHARES CLASS Y SHARES
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE-BEGINNING OF PERIOD $ 10.00 $10.00 $10.00
Net investment income 0.11 0.07 0.14
Net realized gain (loss) and unrealized
appreciation (depreciation) 1.62 1.90 1.61
-------- ------- -------
Total from investment operations 1.73 1.97 1.75
-------- ------- -------
Dividends from net investment income (0.08) (0.01) (0.08)
Net increase in net asset value 1.65 1.96 1.67
-------- ------- -------
NET ASSET VALUE-END OF PERIOD $ 11.65 $11.96 $11.67
======== ======= =======
Total Return (excluding sales charges) 17.33% 16.58% 17.57%
Net Assets, End of Period (000) $ 13,862 $ 59 $ 669
Ratio of expenses to average net assets (a) 1.30% 2.05% 1.25%
Ratio of expenses to average net assets(*) (a) 2.87% 7.59% 6.30%
Ratio of net investment income to average net assets (a) 0.59% 0.62% 1.40%
Ratio of net investment income to average net assets(*) (a) (0.98%) (4.91%) (3.65%)
Portfolio turnover 27.72% 27.72% 27.72%
- -----------------------------------------------------------------------------------------------------------------------------
(A) ANNUALIZED.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
</TABLE>
36 NATIONWIDE
<PAGE> 39
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 ("NIF
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 (the
"Funds"), each with its own investment objectives. This report contains the
financial statements and financial highlights of the five Funds listed below
which comprise the Prestige Advisor Series. The Funds in the Prestige
Advisor Series commenced operations on November 2, 1998:
- Prestige Large Cap Value Fund
- Prestige Large Cap Growth Fund
- Prestige Balanced Fund
- Prestige Small Cap Fund
- Prestige International Fund
The Funds currently offer Class A, B, and Y Shares. Class A Shares are purchased
with a front-end sales load, a 0.25% 12b-1 fee and 0.25% administrative
servicing fee. Class B Shares are subject to a contingent deferred sales charge
("CDSC") on redemption and a 1.00% 12b-1 fee. Class Y Shares are purchased
without a front-end sales charge or CDSC fee and do not bear a 12b-1 fee. Class
Y Shares are subject to a 0.25% administrative service fee and are only offered
to certain classes of investors.
(a) SECURITY VALUATION - ALL FUNDS
(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) U.S. Government securities are valued at the last quoted bid price as
provided by an independent pricing agent. All of the debt securities
are valued by a combination of daily quotes and matrix evaluations as
provided by an independent pricing service.
(3) 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.
(4) Foreign Currency Transactions. Fluctuations in the value of investments
resulting from changes in foreign exchange rates are included with net
realized and unrealized gain or loss from investments.
Net realized gains or losses arising from sales of foreign currencies,
security transactions, income receipts and expense payments are
recorded on the Fund's books in the U.S. dollar equivalent of amounts
actually received or paid. Net unrealized gains or losses arise from
accounting records denominated in foreign currencies and then
translated into U.S. dollars.
(5) Forward Foreign Currency Contracts. The Funds may enter into forward
foreign currency exchange contracts (forward exchange contracts) which
are obligations to purchase or sell a foreign currency at a specified
rate on a certain date in the future. A net realized gain or loss would
be incurred if the value of the contract increases or decreases between
the date the contract is opened and the date it is closed. Forward
exchange contracts are marked to market daily and this change in value
is reflected in the Statement of Assets and Liabilities as a net
receivable/payable for foreign currency contracts sold/purchased.
At or before the closing of a forward exchange contract, a Fund may
either sell a portfolio security and make delivery of the currency, or
retain the security and fully or partially offset its contractual
obligation to deliver the currency by purchasing a second contract. If
the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund, at the time of execution of the offsetting
transaction, will incur a gain or loss to the extent that movement has
occurred in forward contract prices.
Forward exchange contracts can be used to hedge the risks associated
with commitments to purchase securities denominated in foreign
currencies for agreed amounts. The precise matching of forward exchange
contract amounts and the value of the securities involved generally
will not be possible because the value of such securities, measured in
the foreign currency, will change after the forward exchange contract
has been established. Thus, the Fund may need to purchase or sell
foreign currencies in the spot (cash) market
N A T I O N W I D E 37
<PAGE> 40
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
p to the extent such foreign currencies are not covered by forward
exchange contracts. The Fund could be exposed to risk if a counter
party is unable to meet the terms of a forward exchange contract or if
the value of the currency changes unfavorably. The projection of
short-term currency market movements is difficult, and the successful
execution of a short-term hedging strategy is highly uncertain.
(6) Futures contracts and options traded on a commodities exchange or board
of trade are valued the last sales price at the close of trading, or if
there was no sale, the quoted bid price at the close of trading.
Futures are used for purposes other than hedging.
(7) 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 includes, where applicable, the pro rata amortization of premium or
discount.
(c) FEDERAL INCOME TAXES
Each Funds policy is to qualify as a regulated investment company under the
Internal Revenue Code and to distribute all taxable income to shareholders.
Therefore no provision has been made for federal income taxes as it is the
intention of such 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 Large Cap
Value Fund had a net capital loss carry forward of $101,097. If unused it will
expire in 8 years.
(d) DIVIDENDS TO SHAREHOLDERS
(1) Dividend income, if any, is declared and 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.
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. For the period ended October 31, 1999, the following
reclasses were necessary:
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT CAPITAL
INCOME GAIN
- --------------------------------------------------------------------------------
Large Cap Growth $(33,926) $33,926
International (23,002) 23,002
(e) EXPENSES
General expenses of the Trust, not directly attributable to a Fund 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 shares outstanding of each class.
Direct expenses of a Fund are allocated to that Fund and sub- allocated to the
classes in the methods mentioned above. Direct expenses of a class are allocated
to that class unless otherwise directed by the Trust's Board of Trustees.
Distribution fees, transfer agent 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.
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.
38 N A T I O N W I D E
<PAGE> 41
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(g) CAPITAL SHARE TRANSACTIONS
Transactions in class level shares of the Funds were as follows:
<TABLE>
<CAPTION>
LARGE CAP VALUE(a) LARGE CAP GROWTH(a) BALANCED(a)
---------------------------------------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
NOVEMBER 2, 1998 NOVEMBER 2, 1998 NOVEMBER 2, 1998
CAPITAL TRANSACTIONS: TO OCTOBER 31, 1999 TO OCTOBER 31, 1999 TO OCTOBER 31, 1999
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 30,294,612 $ 40,634,346 $ 2,460,604
Dividends reinvested 47,051 - 40,667
Cost of shares redeemed (3,441,343) (9,077,683) (162,529)
------------ ------------ ------------
Change in net assets $ 26,900,320 $ 31,556,663 $ 2,338,742
============ ============ ============
CLASS B SHARES:
Proceeds from shares issued$ 1,487,920 $ 2,128,414 $ 1,896,555
Dividends reinvested 1,352 - 8,769
Cost of shares redeemed (1,438,785) (1,288,432) (1,201)
------------ ------------ ------------
Change in net assets $ 50,487 $ 839,982 $ 1,904,123
============ ============ ============
CLASS Y SHARES:
Proceeds from shares issued$ 2,702,610 $ 5,802,445 $ 3,000,573
Dividends reinvested 8,560 - 53,407
Cost of shares redeemed (2,044,968) (1,854,953) (191,713)
------------ ------------ ------------
Change in net assets $ 666,202 $ 3,947,492 $ 2,862,267
============ ============ ============
<CAPTION>
- ----------------------------------------------------------------------------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
NOVEMBER 2, 1998 NOVEMBER 2, 1998 NOVEMBER 2, 1998
SHARE TRANSACTIONS: TO OCTOBER 31, 1999 TO OCTOBER 31, 1999 TO OCTOBER 31, 1999
- ----------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 2,833,811 3,157,580 238,374
Reinvested 4,668 - 3,764
Redeemed (330,013) (696,705) (14,591)
------------ ------------ ------------
Change in shares 2,508,466 2,460,875 227,547
============ ============ ============
CLASS B SHARES:
Issued 148,515 187,850 187,391
Reinvested 135 - 820
Redeemed (133,468) (100,488) (106)
------------ ------------ ------------
Change in shares 15,182 87,362 188,105
============ ============ ============
CLASS Y SHARES:
Issued 259,315 482,762 289,012
Reinvested 814 - 4,942
Redeemed (187,195) (144,797) (17,279)
------------ ------------ ------------
Change in shares 72,934 337,965 276,675
============ ============ ============
</TABLE>
(a) COMMENCED OPERATIONS ON NOVEMBER 2, 1998.
NATIONWIDE 39
<PAGE> 42
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
SMALL CAP(a) INTERNATIONAL(a)
---------------------------------------------
PERIOD FROM PERIOD FROM
NOVEMBER 2, 1998 NOVEMBER 2,1998
CAPITAL TRANSACTIONS: TO OCTOBER 31, 1999 TO OCTOBER 31, 1999
----------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 21,511,277 $ 16,120,547
Dividends reinvested 9,206 7,779
Cost of shares redeemed (1,967,495) (2,635,325)
------------ ------------
Change in net assets $ 19,552,988 $ 13,493,001
============ ============
CLASS B SHARES:
Proceeds from shares issued $ 1,209,089 $ 1,056,059
Dividends reinvested - 653
Cost of shares redeemed (1,120,100) (1,152,949)
------------ ------------
Change in net assets $ 88,989 $ (96,237)
============ ============
CLASS Y SHARES:
Proceeds from shares issued $ 3,642,673 $ 2,991,251
Dividends reinvested 5,006 10,373
Cost of shares redeemed (2,065,904) (2,531,690)
------------ ------------
Change in net assets $ 1,581,775 $ 469,934
============ ============
----------------------------------------------------------------------------
PERIOD FROM PERIOD FROM
NOVEMBER 2, 1998 NOVEMBER 2, 1998
SHARE TRANSACTIONS: TO OCTOBER 31, 1999 TO OCTOBER 31, 1999
----------------------------------------------------------------------------
CLASS A SHARES:
Issued 1,948,238 1,418,382
Reinvested 860 725
Redeemed (176,472) (229,251)
------------ ------------
Change in shares 1,772,626 1,189,856
============ ============
CLASS B SHARES:
Issued 119,232 104,928
Reinvested 0 63
Redeemed (100,009) (100,084)
------------ ------------
Change in shares 19,223 4,907
============ ============
CLASS Y SHARES:
Issued 342,994 277,799
Reinvested 489 966
Redeemed (186,383) (221,437)
------------ ------------
Change in shares 157,100 57,328
============ ============
----------------------------------------------------------------------------
</TABLE>
(a) COMMENCED OPERATIONS ON NOVEMBER 2, 1998.
4 0 N A T I O N W I D E
<PAGE> 43
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 the Fund. Fees are voluntarily waived or reimbursed to the Funds in
order to maintain expense ratios at or below stated expense caps. The following
table illustrates the stated expense caps for each class of share for the period
ended October 31, 1999:
EXPENSE CAPS
-------------------------------------------------
FUND CLASS A SHARES CLASS B SHARES CLASS Y SHARES
- --------------------------------------------------------------------------------
Large Cap Value 1.15% 1.90% 1.00%
Large Cap Growth 1.20% 1.95% 1.05%
Balanced 1.10% 1.85% 0.95%
Small Cap 1.35% 2.10% 1.20%
International 1.30% 2.05% 1.25%
The following table illustrates fees waived and reimbursed expenses of the Funds
for the period ended October 31, 1999.
TOTAL FEES
TOTAL FUND FEES OTHER FEES WAIVED/ NET FUND
FUND EXPENSES WAIVED* REIMBURSED REIMBURSED EXPENSES
- --------------------------------------------------------------------------------
Large Cap Value $234,655 $131,865 $ - $131,865 $102,790
Large Cap Growth 283,775 143,912 - 143,912 139,863
Balanced 232,302 124,917 26,518 151,435 80,867
Small Cap 237,310 140,626 - 140,626 96,684
International 235,808 120,943 39,594 160,537 75,271
*Fees Waived includes advisory, fund administration and transfer and dividend
disbursing agent fees.
Each waiver of advisory fees and/or assumption of other expenses by VMF or NAS
for a Fund is subject to a possible reimbursement by that Fund within five years
of the Fund's commencement of operations if such reimbursement can be achieved
within the foregoing annual expense limitations.
As stated above, VMF earns an annual advisory fee based on average daily net
assets. From such fees, pursuant to subadvisory agreements, VMF pays subadvisory
fees to the subadvisors for the day-to-day investment management services of
their respective portfolio. Additional information regarding the gross
investment advisory fees collected and paid to the subadvisors is as follows for
the period ended October 31, 1999.
N A T I O N W I D E 41
<PAGE> 44
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
<TABLE>
<CAPTION>
FUND AND TOTAL ADVISORY ADVISORY FEES SUBADVISORY FEE TOTAL FEES PAID TO
SUBADVISOR FEES RETAINED FEES PAID SCHEDULE FEES RETAINED SUBADVISOR
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Large Cap Value $ 62,525 $ 33,343 $ 29,182 Up to $100 million 0.75% 0.40% 0.35%
- Brinson Partners, Inc. $100 million or more 0.70% 0.40% 0.30%
------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth $ 89,668 $ 44,815 $ 44,853 Up to $150 million 0.80% 0.40% 0.40%
- Goldman Sachs $150 million or more 0.70% 0.40% 0.30%
Asset Management
------------------------------------------------------------------------------------------------------------------------------
Balanced $ 48,069 $ 25,632 $ 22,437 Up to $100 million 0.75% 0.40% 0.35%
- J.P. Morgan $100 million or more 0.70% 0.40% 0.30%
Investment
Management, Inc.
------------------------------------------------------------------------------------------------------------------------------
Small Cap $ 64,998 $ 27,362 $ 37,636 Up to $100 million 0.95% 0.40% 0.55%
- INVESCO $100 million or more 0.80% 0.40% 0.40%
Management
& Research, Inc.
------------------------------------------------------------------------------------------------------------------------------
International $ 45,208 $ 21,274 $ 23,934 Up to $200 million 0.85% 0.40% 0.45%
- Lazard Asset $200 million or more 0.80% 0.40% 0.40%
Management
------------------------------------------------------------------------------------------------------------------------------
</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>
FUND ADMINISTRATION(*) FUND ADMINISTRATION
FUND FEE FEE SCHEDULE
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Large Cap Value $ 75,000 Up to $250 million 0.10%
Large Cap Growth 75,000 Up to $750 million 0.06%
Balanced 75,000 On $1 billion and more 0.04%
Small Cap 75,000
International 75,000
</TABLE>
(*)The Fund Administration fee is subject to a minimum of $75,000
per Fund per year.
NAS receives fees for services as principal underwriter from Class A Shares
of the Funds in the form of front-end sales loads. Such fees are deducted
from and are not included in proceeds from sales of Class A Shares. From
such fees, NAS pays sales commissions, salaries, and other expenses. For
the period ended October 31, 1999, the fees were as follows:
FUND CLASS A SHARES
---------------------------------------------------------------------------
Large Cap Value $ 8,892
Large Cap Growth 25,927
Balanced 17,306
Small Cap 6,175
International 1,195
4 2 N A T I O N W I D E
<PAGE> 45
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
NAS receives fees for services as principal underwriter for the Class B
Shares of the Funds. Such fees are contingent deferred sales charges
(CDSCs) ranging from 5% to 1% imposed on redemptions which cause the
current value of an account to fall below the total purchase payments made
during the past five years. CDSCs collected for the period ended October
31, 1999, on redemptions of Class B Shares were as follows:
FUND CLASS B SHARES
---------------------------------------------------------------------------
Large Cap Value $ -
Large Cap Growth 306
Balanced 60
Small Cap 5
International 5
NAS may receive fees from Class A and Class B Shares of the Funds for
distribution of its shares 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 and 1.00% of Class B
Shares. For the period ended October 31, 1999, the 12b-1 fees received by
NAS were as follows:
FUND CLASS A SHARES CLASS B SHARES
---------------------------------------------------------------------------
Large Cap Value $ 13,930 $ 12,165
Large Cap Growth 17,883 12,247
Balanced 5,160 18,713
Small Cap 10,600 8,944
International 8,068 8,962
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 fee from each of the Funds at the
following rate: $18 per Fund account for Class A and B Shares, and 0.01% of
each Fund's average daily net assets for Class Y Shares.
As stated above, on September 1, 1999, NAS was replaced by VMF as an
investment advisor and 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 period ended October 31, 1999.
Also on September 1, 1999, VSA entered into an agreement with BISYS Fund
Services Ohio, Inc., to provide sub-administration and sub-transfer agent
services.
NFS and other financial institutions or servicing organizations may receive
fees under the terms of an Administrative Services Plan for providing
administrative support services including but not limited to the following:
establishing and maintaining shareholder accounts, processing purchase and
redemption transactions, arranging bank wires, performing shareholder
subaccounting, answering inquires regarding the Funds, and other such
services. These fees are based on an annual rate of up to 0.25% of the
average daily net assets of the Class A and Y Shares.
N A T I O N W I D E 4 3
<PAGE> 46
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
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 Statements of Operations. No compensating balances are
required.
4. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding U.S. Government and short-term
securities) and purchases and sales of U.S. Government securities for the
period ended October 31, 1999, are summarized as follows:
NON U.S. GOVERNMENT U.S. GOVERNMENT
SECURITIES SECURITIES
-------------------------------------------------------
PURCHASES SALES PURCHASES SALES
-------------------------------------------------------
Large Cap Value $37,424,128 $10,549,412 $ - $ -
Large Cap Growth 44,711,692 9,442,251 - -
Balanced 14,024,106 8,282,079 5,618,622 4,362,744
Small Cap 5,649,995 26,033,928 - -
International 14,721,935 1,627,719 - -
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 as follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ -----------------------
Large Cap Value $ 1,396,229 $ 2,152,379 $ (756,150)
Large Cap Growth 4,018,387 1,638,364 2,380,023
Balanced 757,991 304,376 453,615
Small Cap 2,107,186 1,721,621 385,565
International 1,126,849 540,104 586,745
The Large Cap Growth and Large Cap Value Fund engaged in trading financial
futures contracts. Each of these Funds is exposed to market risks in excess
of the amounts recognized in the statement of assets and liabilities as a
result of changes in the value of the underlying financial instruments.
Investments in financial futures require the Fund to "mark to market" such
futures on a daily basis to reflect the changes in the market value of the
contract at the close of each day's trading. Typically, variation margin
payments are made or received to reflect daily unrealized gains or losses.
When the contracts are closed, the Fund recognizes a realized gain or loss.
Realized gains and losses have been computed on the specific identification
method.
A stock index futures contract is a bilateral agreement pursuant to which
two parties agree to take or make delivery of any amount of cash equal to a
specified dollar amount times the difference between the stock index value
at the close of trading on the contracts and the price at which the futures
contract was originally struck. The Fund's purpose in entering into futures
contracts is to remain fully invested and reduce transaction costs.
Restricted cash represents collateral for the Funds' investments in futures
trading.
4 4 N A T I O N W I D E
<PAGE> 47
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
October 31, 1999
5. EURO CONVERSION
On January 1, 1999, eleven countries (Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain) in Europe
re-denominated their currency to the Euro currency. This re-denomination had
no tax implications and did not materially effect the Fund's financial
statements that hold currency and/or secu- rities denominated in the above
listed currencies.
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 Funds' 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.
7. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For corporate shareholders, 5.3% of the Large Cap Growth Fund, 56.2% of the
Large Cap Value Fund, 14.6% of the Balanced Fund, and 21.1% of the Small Cap
Fund income dividends and short-term capital gain distributions in the
fiscal year ended October 31, 1999, qualify for the corporate dividend
received deduction.
N A T I O N W I D E 4 5
<PAGE> 48
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-Prestige Advisor Series (comprised of Prestige
Large Cap Value Fund, Prestige Large Cap Growth Fund, Prestige Balanced
Fund, Prestige Small Cap Fund and Prestige International Fund)
(collectively, the Funds), including the statements of investments, as of
October 31, 1999, and the related statements of operations, statement of
changes in net assets and financial highlights for the period from November
2, 1998, through October 31, 1999. 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, the changes in their net assets and financial highlights for the
period from November 2, 1998, through October 31, 1999, in conformity with
generally accepted accounting principles.
KPMG LLP
COLUMBUS, OHIO
DECEMBER 17, 1999
46 N A T I O N W I D E
<PAGE> 49
(This Page Intentionally Left Blank.)
<PAGE> 50
(This Page Intentionally Left Blank.)
<PAGE> 51
- --------------------------------------------------------------------------------
TRUSTEES
Dimon R. McFerson
Chairman
Columbus, Ohio
Dr. John C. Bryant
Cincinnati, Ohio
Dr. C. Brent DeVore
Westerville, Ohio
Sue A. Doody
Columbus, Ohio
Robert M. Duncan
Columbus, Ohio
Dr. Thomas J. Kerr, IV
Westerville, Ohio
Douglas F. Kridler
Columbus, Ohio
Nancy C. Thomas
Louisville, Ohio
David C. Wetmore
Reston, Virginia
[Picture of people
walking]
- --------------------------------------------------------------------------------
OFFICERS
James F. Laird, Jr. - Treasurer
Elizabeth A. Davin - Secretary
Patricia J. Smith - Assistant Secretary
Charles S. Bath - Assistant Treasurer
Craig A. Carver - Assistant Treasurer
Scott A. Englehart - Assistant Treasurer
H. Carl Juckett - Assistant Treasurer
Edwin P. McCausland, Jr. - Assistant Treasurer
Karen R. Tackett - Assistant Treasurer
TRANSFER AGENT
Nationwide Investors Services, Inc.
P.O. Box 1492
Columbus, Ohio 43216-1492
CUSTODIAN
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263-0001
LEGAL COUNSEL
Dietrich, Reynolds & Koogler
One Nationwide Plaza
Columbus, Ohio 43215-2220
INDEPENDENT AUDITORS
KPMG LLP
Two Nationwide Plaza
Columbus, Ohio 43215-2537
DISTRIBUTOR
Nationwide Advisory Services, Inc.
Three Nationwide Plaza
Columbus, Ohio 43215-2220
- --------------------------------------------------------------------------------
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> 52
[Picture of Top]
[Logo NATIONWIDE(R) Family of Funds]
offered by Villanova Capital through Nationwide Advisory Services
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 ---------------
THREE NATIONWIDE PLAZA BULK RATE
COLUMBUS, OHIO 43215-2220 U.S. POSTAGE
PAID
OCTOBER 1999 Cleveland, OH
ANNUAL REPORT Permit No. 1702
---------------
HS-1214
