NATIONWIDE MUTUAL FUNDS, 485APOS, 2000-12-29

NATIONWIDE MUTUAL FUNDS
485APOS, 2000-12-29

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<PAGE> 1
'33 Act File No. 333-40455
'40 Act File No. 811-08495

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.

Post-Effective Amendment No. 28 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 29 [X]

(CHECK APPROPRIATE BOX OR BOXES)

NATIONWIDE MUTUAL FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
THREE NATIONWIDE PLAZA
COLUMBUS, OHIO 43216
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (614) 857-2308

SEND COPIES OF COMMUNICATIONS TO:

MR. DUANE LASSITER, ESQ.

STRADLEY, RONON STEVENS & YOUNG, LLP

2600 ONE COMMERCE SQUARE
PHILADELPHIA PENNSYLVANIA 19103-7098
(NAME AND ADDRESS OF AGENT FOR SERVICE)

It is proposed that this filing will become effective: (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)

[ ] on [date] pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(1)

[X] on March 1, 2001 pursuant to paragraph (a)(1)

[ ] 75 days after filing pursuant to paragraph (a)(2)

[ ] on [date] pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[ ] This post-effective amendment designated a new effective date for a
previously filed post-effective amendment.
<PAGE> 2

Explanatory Note

This filing includes Prospectuses for Gartmore Growth Fund, Gartmore Nationwide
Fund, Gartmore Millennium Growth Fund, Gartmore Growth 20 Fund, Gartmore Value
Opportunities Fund, Nationwide Large Cap Value Fund Gartmore Global Technology
and Communications Fund, Gartmore Emerging Markets Fund, Gartmore International
Growth Fund, Gartmore Global Leaders Fund, Gartmore OTC Fund, Gartmore
International Small Cap Growth Fund, Nationwide Large Cap Growth Fund,
Nationwide Small Cap Fund, Nationwide High Yield Bond Fund, Nationwide Bond
Fund, Nationwide Tax-Free Income Fund, Nationwide Government Bond Fund,
Nationwide Morley Enhanced Income Fund, Nationwide Money Market Fund, Nationwide
Investor Destinations Aggressive Fund, Nationwide Investor Destinations
Moderately Aggressive Fund, Nationwide Investor Destinations Moderate Fund,
Nationwide Investor Destinations Moderately Conservative Fund and Nationwide
Investor Destinations Conservative Fund and the combined Statement of Additional
Information for the funds listed above as well as the Gartmore European Growth
Fund, Gartmore Global Small Companies Fund, Nationwide Morley Capital
Accumulation Fund, Nationwide Growth Focus Fund, Nationwide Global Life Sciences
Fund, NorthPointe Small Cap Value Fund, Nationwide S&P 500 Index Fund,
Nationwide Small Cap Index Fund, Nationwide Mid Cap Market Index Fund,
Nationwide International Index Fund, Nationwide Bond Index Fund, Prestige
Balanced Fund and Prestige International Fund.

The Prospectuses for the Nationwide Morley Capital Accumulation Fund,
NorthPointe Small Cap Value Fund, Nationwide S&P 500 Index Fund, Nationwide
Small Cap Index Fund, Nationwide Mid Cap Market Index Fund, Nationwide
International Index Fund, and Nationwide Bond Index Fund will be filed on or
before March 1, 2001. The Prospectuses for the Gartmore European Growth Fund,
Gartmore Global Small Companies Fund, Nationwide Global Life Sciences Fund and
Nationwide Growth Focus Fund are expected to be filed at a later date. The
Prestige Balanced Fund and Prestige International Fund are expected to be
liquidated shortly after March 1, 2001.

<PAGE> 3

NATIONWIDE()(R) FAMILY OF FUNDS

Prospectus

March 1, 2001

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these Funds' shares or determined whether this
prospectus is complete or accurate. To state otherwise is a crime.

- Gartmore Growth Fund

(formerly "Nationwide Growth Fund")

-Gartmore Nationwide Fund

(formerly "Nationwide Fund")

-Nationwide Large Cap Value Fund

(formerly "Prestige Large Cap Value Fund")

- Gartmore Growth 20 Fund

- Gartmore Millennium Growth Fund

- Gartmore Value Opportunities Fund

(formerly "Nationwide Value Opportunities Fund")

<PAGE> 4

TABLE OF CONTENTS

FUND SUMMARIES............................................................... 2

Gartmore Growth Fund......................................................... 3

Gartmore Nationwide Fund..................................................... 6

Nationwide Large Cap Value Fund.............................................. 9

Gartmore Growth 20 Fund..................................................... 12

Gartmore Millennium Growth Fund............................................. 15

Gartmore Value Opportunities Fund........................................... 18

MORE ABOUT THE FUNDS......................................................... 21

Principal Investments and Techniques......................................... 21

Principal Investment Risks................................................... 22

MANAGEMENT................................................................... 24

Investment Adviser........................................................... 24

Portfolio Managers........................................................... 25

Subadviser................................................................... 25

BUYING, SELLING AND EXCHANGING FUND SHARES................................... 26

Choosing a Share Class....................................................... 26

Buying Shares................................................................ 27

Selling Shares............................................................... 31

Distribution Plan............................................................ 33

Exchanging Shares............................................................ 34

DISTRIBUTIONS AND TAXES...................................................... 35

Distributions of Income Dividends............................................ 35

Distributions of Capital Gains............................................... 35

Reinvesting Distributions.................................................... 35

State and Local Taxes........................................................ 35

Selling Fund Shares.......................................................... 35

Exchanging Fund Shares....................................................... 35

FINANCIAL HIGHLIGHTS......................................................... 36

ADDITIONAL INFORMATION............................................... BACK COVER

1
<PAGE> 5

FUND SUMMARIES

This prospectus provides information about six of the Nationwide(R) Mutual Funds
(together, the "Funds"). The following sections summarize key information about
the Funds, including information regarding the investment objectives, principal
strategies, principal risks, performance and fees for all the Funds. Each Fund's
investment objective can be changed without shareholder approval. Use the
summaries to compare the Funds with other mutual funds. More detailed
information about the risks and investment techniques of the Funds can be found
in "More About the Funds" beginning on page . "You" and "your" refer to
potential investors and current shareholders of one or more of the Funds.

The Fund Summaries contain a discussion of the general risks of investing in
each Fund. As with any mutual fund, there can be no guarantee that a Fund will
meet its goal or that a Fund's performance will be positive for any period of
time.

A QUICK NOTE ABOUT SHARE CLASSES

Each of the Funds has four different share classes:

Gartmore Growth Fund

(formerly the "Nationwide Growth Fund")

- Class A

- Class B

- Class C

- Class D

Gartmore Nationwide Fund

(formerly the "Nationwide Fund")

- Class A

- Class B

- Class C

- Class D

Nationwide Large Cap Value Fund

(formerly the "Prestige Large Cap Value Fund")

- Class A

- Class B

- Class C

- Institutional Service Class

Gartmore Growth 20 Fund

- Class A

- Class B

- Class C

- Institutional Service Class

Gartmore Millennium Growth Fund

(formerly the "Nationwide Mid Cap Growth Fund")

- Class A

- Class B

- Class C

- Class D

Gartmore Value Opportunities Fund

(formerly the "Nationwide Value Opportunities Fund")

- Class A

- Class B

- Class C

- Institutional Service Class

The fees, sales charges and expenses for each share class are different, but
each share class of a particular Fund represents an investment in the same
assets of that Fund. Having different share classes simply lets you choose the
cost structure that's right for you.

The fees and expenses for each Fund are set forth in the Fund Summaries. For
more information about which share class is right for you, see "Buying, Selling
and Exchanging Fund Shares -- Choosing a Share Class" beginning on page .

2
<PAGE> 6

FUND SUMMARIES -- GARTMORE GROWTH FUND

(FORMERLY "NATIONWIDE GROWTH FUND")

OBJECTIVE AND PRINCIPAL STRATEGIES

The Gartmore Growth Fund seeks long-term capital appreciation.

To achieve its objective, the Fund primarily invests in common stocks of large
capitalization companies. Under normal market conditions, the Fund invests at
least 65% of its total assets in common stocks and convertible securities, and
generally intends to be fully invested in these securities. The portfolio
manager will consider, among other things, a company's financial strength,
competitive position in its industry, projected future earnings, cash flows, and
dividends when deciding whether to buy or sell securities. The Fund looks for
companies whose earnings are expected to consistently grow faster than other
companies in the market. It generally will sell securities if:

THE BENEFITS OF RESEARCH
Through research, the portfolio manager and analysts
gather, check and analyze information about industries
and companies to determine if they are well positioned
for long-term growth. The Fund seeks companies that
have favorable long-term growth potential and the
financial resources to capitalize on growth
opportunities.

MARKET CAPITALIZATION is a common way to measure the
size of a company based on the price of its common
stock; it's simply the number of outstanding shares of
the company multiplied by the current share price.

- The price of the security is overvalued.

- The company's earnings are consistently lower than expected.

- More favorable opportunities are identified.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by the portfolio manager's ability to assess economic
conditions and investment opportunities.

STOCK MARKET RISK. Stock market risk is the risk that the Fund could lose value
if the individual stocks in which the Fund has invested or the overall stock
markets in which they trade go down. Individual stocks and the overall stock
markets may experience short-term volatility as well as extended periods of
decline or little growth. Individual stocks are affected by factors such as
corporate earnings, production, management and sales. Individual stocks may also
be affected by the demand for a particular type of stock, such as growth stocks
or the stocks of companies with a particular market capitalization. Stock
markets are affected by numerous factors, including interest rates, the outlook
for corporate profits, the health of the national and world economies, national
and world social and political events, and the fluctuations of other stock
markets around the world.

MARKET TRENDS RISK. Different types of stocks tend to shift into and out of
favor with stock market investors depending on market and economic conditions.
For instance, from time to time the stock market may not favor growth-oriented
stocks. Rather, the market could favor value stocks or may not favor equity
securities at all. Accordingly, since the Fund focuses on growth-style stocks,
performance may at times be better or worse than the performance of stock funds
that focus on other types of stocks, or that have a broader investment style.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" on page .

3
<PAGE> 7

Fund Summaries -- Gartmore Growth Fund

PERFORMANCE

The following bar chart and table show two aspects of the Fund: volatility and
performance. The bar chart shows the volatility -- or variability -- of the
Fund's annual total returns over time, and shows that fund performance can
change from year to year. The table shows the Fund's average annual total
returns for certain time periods compared to the returns of a broad-based
securities index. The bar chart and table provide some indication of the risks
of investing in the Fund. Remember, however, that past performance does not
guarantee similar results in the future.

ANNUAL RETURNS -- CLASS D SHARES(1)

Best Quarter: 23.0% 1st qtr. of 1997

Worst Quarter: % qtr. of

---------------

(1) These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown.

<TABLE>
<CAPTION>
Average annual returns(1) -- as of 12/31/00 1 year 5 years 10 years
--------------------------------------------------------------------------
<S> <C> <C> <C>
Class A shares(2) % % %
..........................................................................
Class B shares(2) % % %
..........................................................................
Class C shares(3) % % %
..........................................................................
Class D shares % % %
..........................................................................
Russell 1000(R) Growth Index(4) % % %
</TABLE>

---------------

(1) These returns reflect performance after sales charges and expenses are
deducted, and include the performance of its predecessor fund prior to May
11, 1998.

(2) These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the class (May 11, 1998), and which is the
same as the performance shown for Class D shares through May 11, 1998. The
returns have been restated for sales charges but not for fees applicable to
Class A and B shares. Had Class A or B shares been in existence for the time
periods presented, the performance of Class A and B shares would have been
lower as a result of their additional expenses.

(3)These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the Fund (May 11, 1998), and which is the
same as the performance shown for the Class D shares through May 11, 1998. In
addition for the period from May 11, 1998 through December 31, 2000 which is
prior to the implementation of Class C shares, the performance of Class C
shares is based on the performance shown for Class D shares. The returns have
been restated for sales charges but not for fees applicable to Class C
shares. Had Class C shares been in existence for the time periods presented,
the performance of Class C shares would have been lower as a result of its
additional expenses.

(4)The Russell 1000(R) Growth Index is an unmanaged index of growth securities
of large U.S. companies included in the Russell 1000(R) Index. These returns
do not include any sales charges or expenses. If sales charges and expenses
that deducted, the actual returns of this index would be lower.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Fees(1) Class A Class B Class C Class D
(paid directly from your investment) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) imposed 5.75%(2) None 1.00%
on purchases (as a percentage of 4.50%(2)
offering price)
...........................................................................
Maximum Deferred Sales Charge (Load) None(3) 5.00%(4) 1.00%(5) None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

4
<PAGE> 8

Annual Fund Operating Expenses Class A Class B Class C Class D
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.56% 0.56% 0.56% 0.56%
.....................................................................
Distribution and/or Service 0.25% 1.00% 1.00% None
(12b-1) Fees
.....................................................................
Other Expenses % % % %
---------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A and Class D shares decreases. For more information, see
"Buying, Selling and Exchanging Fund Shares -- Buying Shares -- Class A,
Class D and Class C sales charges" on page .

(3) A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(4) A CDSC ranging from 5% to 1% is charged when you sell Class B shares within
the first six years of purchase. Class B shares are converted to Class A
shares after you have held them for seven years. See "Buying, Selling and
Exchanging Fund Shares -- Selling Shares -- Contingent deferred sales charge
(CDSC) on Class A, Class B and Class C shares" beginning on page .

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year and no changes in expenses. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A shares $ $ $ $
.................................................................
Class B shares $ $ $ $
.................................................................
Class C shares $ $ $ $
.................................................................
Class D shares $ $ $ $
</TABLE>

You would pay the following expenses on the same investment if you did not sell
your shares(1):

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B shares $ $ $ $
.................................................................
Class C shares $ $ $ $
</TABLE>

---------------

(1)Expenses paid on the same investment in Class A and Class D shares do not
change whether or not you sell your shares.

5
<PAGE> 9

FUND SUMMARIES -- GARTMORE NATIONWIDE FUND

(FORMERLY "NATIONWIDE FUND")

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks total return through a flexible combination of current income and
capital appreciation.

To achieve its objective, the Fund invests primarily in the common stock and
convertible securities of companies with
consistent earnings performance, and
generally intends to be fully invested in
these securities. The Fund looks for
companies whose earnings are expected to
consistently grow faster than other
companies in the market. It usually will
sell securities if:

- The price of the security is overvalued.

- The company's earnings are consistently lower than expected.

- More favorable opportunities are identified.

TOTAL RETURN
Generally, total return means a combination of income
and capital appreciation. In other words, the Fund
looks for stocks and other securities that pay
dividends and other income, instead of relying solely
on the security's prospects for increasing in value.
Because, in most cases, a stock is more certain to pay
its scheduled dividends than increase in value, a
total return approach can help a fund achieve more
stable, dependable returns.

PRINCIPAL RISKS

For more detailed information about the Fund's investments and risks, see "More
About the Funds" on page .

6
<PAGE> 10

PERFORMANCE

ANNUAL RETURNS -- CLASS D SHARES(1)

Best Quarter: 18.5% 2nd qtr. of 1997
Worst Quarter: -11.24% 3rd qtr. of 1999
---------------

(1) These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown.

---------------

(1) These returns reflect performance after sales charges and expenses are
deducted, and include the performance of its predecessor fund prior to May
11, 1998.

(3)These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the Fund (May 11, 1998), and which is the
same as the performance shown for the Class D shares through May 11, 1998. In
addition, for the period from May 11, 1998 through December 31, 2000 which is
prior to the implementation of Class C shares, the performance of Class C
shares is based on the performance shown for Class D shares. The returns have
been restated for sales charges but not for fees applicable to Class C
shares. Had Class C shares been in existence for the time periods presented,
the performance of Class C shares would have been lower as a result of its
additional expenses.

(4) The Standard & Poor's 500 Index is an unmanaged index of 500 widely held
stocks of large U.S. companies that gives a broad look at how the stock
prices of large U.S. companies have performed. These returns do not include
the effect of any sales charges or expenses. If sales charges and expenses
were deducted, the actual returns of this Index would be lower.

7
<PAGE> 11

Fund Summaries -- Gartmore Nationwide Fund

(formerly "Nationwide Fund")

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Shareholder Fees(1) Class A Class B Class C Class D
(paid directly from your investment) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) imposed 5.75%(2) None 1.00%
on purchases (as a percentage of 4.50%(2)
offering price)
...........................................................................
Maximum Deferred Sales Charge (Load) None(3) 5.00%(4) 1.00%(5) None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

<TABLE>
<CAPTION>
Annual Fund Operating Expenses Class A Class B Class C Class D
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.58% 0.58% 0.58% 0.58%
.....................................................................
Distribution and/or 0.25% 1.00% 1.00% None
Service (12b-1) Fees
.....................................................................
Other Expenses % % % %
---------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(3) A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A shares $ $ $ $
................................................................
Class B shares $ $ $ $
................................................................
Class C shares $ $ $ $
................................................................
Class D shares $ $ $ $
</TABLE>

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1)Expenses paid on the same investment in Class A and Class D shares do not
change whether or not you sell your shares.

8
<PAGE> 12

FUND SUMMARIES -- NATIONWIDE LARGE CAP VALUE FUND

(FORMERLY "PRESTIGE LARGE CAP VALUE FUND")

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks to maximize total return, consisting of both capital appreciation
and current income.

Villanova Mutual Fund Capital Trust, the Fund's investment adviser (VMF), has
selected NorthPointe Capital, LLC as a subadviser to manage the Fund's portfolio
on a day-to-day basis. To achieve its objective, the Fund, under normal
circumstances, invests at least 65% of its total assets in equity securities of
large capitalization U.S. companies which are traded on major stock exchanges
and the over-the-counter markets. The Fund considers large capitalization
companies to be those with market capitalizations similar to the companies in
The Russell 1000(R) Value Index.(1) As of December 29, 2000, the market
capitalizations of companies in The Russell 1000(R) Value Index ranged from
$ million to $ billion. The market capitalization range for companies in
The Russell 1000(R) Value Index is updated annually.

The Fund looks for value oriented securities. To do this, the Subadviser will
begin by identifying securities of large capitalization companies and then
evaluating them by comparing the securities to factors which the subadviser
believes have predictive performance characteristics. These factors include
earnings momentum, price momentum and price to economic value. The subadviser
will also seek to minimize the Fund risk by looking for securities which have
not surprised the market. The subadviser will consider selling a security if
there are more attractive securities available, if the business environment is
changing or to control the overall risk of the Fund's portfolio.

Market capitalization is a common way to measure the size of a company based on
the price of its common stock; it is simply the number of outstanding shares of
the company multiplied by the current share price.

---------------

(1)The Russell 1000(R) Value Index is a registered service mark of The Frank
Russell Company which does not sponsor and is in no way affiliated with the
Fund.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that a you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by the subadviser's ability to assess economic conditions and
investment opportunities.

STOCK MARKET RISK. Stock market risk is the risk that the Fund could lose value
if the individual stocks in which the Fund has invested or the overall stock
markets in which they trade go down. Individual stocks and the overall stock
market may experience short-term volatility as well as extended periods of
decline or little growth. Individual stocks are affected by factors such as
corporate earnings, production, management and sales. Individual stocks may also
be affected by the demand for a particular type of stock, such as growth stocks
or the stocks of companies with a particular market capitalization. Stock
markets are affected by numerous factors, including interest rates, the outlook
for corporate profits, the health of the national and world economies, national
and world social and political events, and the fluctuations of other stock
markets around the world.

MARKET TRENDS RISK. Different types of stocks tend to shift into and out of
favor with stock market investors depending on market and economic conditions.
For instance, from time to time the stock market may not favor growth-oriented
stocks. Rather, the market could favor value stocks or may not favor equity
securities at all. Accordingly, since the Fund focuses on value-style stocks,
performance may at time be better or worse than the performance of stock funds
that focus on other types of stocks, or that have a broader investment style.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" on page .

9
<PAGE> 13

Fund Summaries -- Nationwide Large Cap Value Fund

(formerly "Prestige Large Cap Value Fund")

PERFORMANCE

The following bar chart and table show two aspects of the Fund: volatility and
performance. The bar chart shows the Fund's annual total returns over time, and
shows that Fund performance can change from year to year. The table shows the
Fund's average annual total returns for certain time periods compared to the
returns of a broad-based securities index. The bar chart and table provide some
indication of the risks of investing in the Fund. Remember, however, that past
performance does not guarantee similar results in the future.

ANNUAL RETURNS -- CLASS A SHARES(1)

--------------------------------------------------------------
<S> <C> <C>
1/1/00-12/31/00 10.17%
</TABLE>

Best Quarter: 10.62% 2nd qtr of 1999
Worst Quarter: -12.99% 3rd qtr of 1999

---------------

(1)These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown. The performance
reflects periods when the Fund's prior subadviser managed the Fund (through
February 28, 2001); beginning March 1, 2001, NorthPointe began managing the
Fund.

<TABLE>
<CAPTION>
One Since
Average annual returns( 1) -- as of December 31, 2000 Year Inception( 2)
--------------------------------------------------------------------------------
<S> <C> <C>
Class A shares % %
................................................................................
Class B shares % %
................................................................................
Class C shares(3) % %
................................................................................
Institutional Service Class shares % %
................................................................................
Russell 1000(R) Value Index(4) % %
</TABLE>

---------------

(1)These returns reflect performance after sales charges, if any, and expenses
are deducted.

(2)The Fund began operations on November 2, 1998.

(3)These returns include performance of the Fund which was achieved prior to the
creation of Class C shares (March 1, 2001), which is the same as the
performance shown for the Class B shares through December 31, 2000. The
returns have been restated for sales charges but not for fees applicable to
Class C shares. Had Class C shares been in existence for the time periods
presented, the performance of Class C shares would have been similar as a
result of similar expenses.

(4)The Russell 1000(R) Value Index is an unmanaged index of value securities of
large U.S. companies included in the Russell 1000(R) Value Index. These
returns do not include the effect of any sales charges or expenses. If sales
charges and expenses were deducted, the actual return of this Index would be
lower.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Large Cap Value Fund.

<TABLE>
<CAPTION>
Institutional
Service
Shareholder Fees(1) Class A Class B Class C Class
(paid directly from your investment) shares shares shares shares
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) imposed 5.75%(2) None 1.00% None
upon purchases (as a percentage of
offering price)
.................................................................................
Maximum Deferred Sales Charge (Load) None(3) 5.00%(4) 1.00%(5) None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

10
<PAGE> 14

<TABLE>
<CAPTION>
Institutional
Service
Annual Fund Operating Expenses Class A Class B Class C Class
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.75% 0.75% 0.75% 0.75%
...........................................................................
Distribution and/or Service 0.25% 1.00% 1.00% None
(12b-1) Fees
...........................................................................
Other Expenses % % % %
---------------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
...........................................................................
Amount of Fee Waiver/ % % % %
Expense Reimbursement
---------------------------------------------------------------------------
NET EXPENSES AFTER WAIVERS(6) % % % %
</TABLE>

---------------

(1)If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2)As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A, Class D and
Class C sales charges" on page .

(3)A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(4)A CDSC ranging from 5% to 1% is charged when you sell Class B shares within
the first six years of purchase. Class B shares are converted to Class A
shares after you have held them for seven years. See "Buying, Selling and
Exchanging Fund Shares -- Selling Shares -- Contingent deferred sales charge
(CDSC) on Class A, Class B and Class C shares" on page .

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6)VMF and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February 28,
2002. The Fund is authorized to reimburse VMF for management fees previously
waived and/or for the cost of Other Expenses paid by VMF provided that any
such reimbursement will not cause the Fund to exceed the expense limitations
noted above. The Fund's ability to reimburse VMF in this manner only applies
to fees paid or reimbursement made by VMF at some time within the first five
years from the time the Fund commenced operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
one year only. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares $ $ $ $
...............................................................
Class B Shares $ $ $ $
...............................................................
Class C Shares $ $ $ $
...............................................................
Institutional Service
Class Shares $ $ $ $
</TABLE>

You would pay the following expenses on the same investment if you did not sell
your shares(1):

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Shares $ $ $ $
...............................................................
Class C Shares $ $ $ $
...............................................................
</TABLE>

---------------

(1)Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

11
<PAGE> 15

FUND SUMMARIES -- GARTMORE GROWTH 20 FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long-term capital appreciation.

To achieve its objective, the Fund normally invests at least 65% of its assets
in common stock and convertible securities of companies of any market
capitalization in any country which demonstrate high growth potential. The
portfolio managers generally intend to be fully invested in these securities.
The Fund looks for companies whose earnings are expected to grow faster than
other companies in the market. The Fund typically focuses its investments in a
core group of 20 to 30 common stocks. It usually will sell portfolio securities
if:

- The outlook of a company's earnings growth becomes less attractive.

- More favorable opportunities are identified.

- There is a significant increase in share price volatility.

The Fund may also invest in debt securities, indexed/ structured securities,
high yield/ high-risk bonds, options, futures, swaps and other types of
derivatives for hedging purposes or non-hedging purposes such as seeking to
enhance return.

PRINCIPAL RISKS

SMALL CAP RISK. To the extent the Fund invests in securities of small
capitalization companies, the Fund's investments in smaller, newer companies may
be riskier than investments in larger, more established companies. The stocks of
smaller companies are usually less stable in price and less liquid than the
stocks of larger companies.

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counterparties
to over-the-counter derivative contracts present the same types of default risk
as issuers of fixed income securities. Derivatives can make the Fund less liquid
and harder to value, especially in declining markets. Also, the Fund may suffer
disproportionately heavy losses relative to the amount of its investments in
derivative contracts. Lastly, changes in the value of derivative contracts or
other hedging instruments may not match or fully offset changes on the value of
the hedged portfolio securities.

NON-DIVERSIFIED FUND RISK. In addition, the Fund is non-diversified. In other
words, it may hold larger positions in a smaller number of securities than a
diversified fund. Since the Fund normally concentrates in a core portfolio of 20
to 30 stocks, this risk may be increased. As a result, a single security's
increase or decrease in value may have a greater impact on the Fund's net asset
value and total return.

Because the appreciation or depreciation of a single stock may have a greater
impact on the net asset value (NAV) of the Fund and its performance, its share
price can be

12
<PAGE> 16

expected to fluctuate more than a comparable diversified fund. This fluctuation,
if significant, may affect the performance of the Fund. With regard to the Fund,
such risks are increased because the Fund normally concentrates its investments
in a core group of twenty to thirty common stocks.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" on page .

PERFORMANCE

No performance information is provided because the Fund did not begin operations
until June 30, 2000.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Institutional
Service
Shareholder Fees(1) Class A Class B Class C Class
(paid directly from your investment) shares shares shares shares
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) imposed 5.75%(2) None 1.00% None
on purchases (as a percentage of
offering price)
.................................................................................
Maximum Deferred Sales Charge (Load) None(3) 5.00%(4) 1.00%(5) None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

<TABLE>
<CAPTION>
Institutional
Service
Annual Fund Operating Expenses Class A Class B Class C Class
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees(6) 0.90% 0.90% 0.90% 0.90%
...........................................................................
Distribution and/or Service 0.25% 1.00% 1.00% None
(12b-1) Fees
...........................................................................
Other Expenses(7) % % % %
---------------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
...........................................................................
Amount of Fee Waiver/Expense % % % %
Reimbursement
---------------------------------------------------------------------------
NET EXPENSES AFTER WAIVERS(8) 1.60% 2.20% 2.20% 1.30%
</TABLE>

---------------

(1)If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(3)A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(4)A CDSC ranging from 5% to 1% is charged when you sell Class B shares within
the first six years of purchase. Class B shares are converted to Class A
shares after you have held them for seven years. See "Buying, Selling and
Exchanging Fund Shares -- Selling Shares -- (Contingent Deferred Sales Charge
(CDSC) on Class A, Class B and Class C shares" on page .

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6)The Fund commenced operations on June 30, 2000. As a result, the management
fee represents the fee which is payable to the VMF, the Fund's adviser under
its contract with the Fund. In addition, the management fee given above is a
base fee and may be higher or lower depending upon the Fund's performance
relative to its benchmark, the S&P 500 Index. For more information concerning
this Fund see the section entitled "Management" on page .

(7)As a new fund, these are estimates for the current fiscal year ending October
31, 2001. These estimates do not take into account the expense limitation
agreement between the Fund and VMF.

(8)VMF and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February 28,
2002. The Fund is authorized to reimburse VMF for management fees previously
waived and/or for the cost of Other Expenses paid by VMF provided that any
such reimbursement will not cause the Fund to exceed the expense limitations
noted above. The Fund's ability to reimburse VMF in this manner only applies
to fees paid or reimbursements made by VMF at some time within the first five
years from the time the Fund commenced operations.

13
<PAGE> 17

Fund Summaries -- Gartmore Growth 20 Fund

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
only one year. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
1 year 3 years
----------------------------------------------------------
<S> <C> <C>
Class A shares $ $
..........................................................
Class B shares $ $
..........................................................
Class C shares $ $
..........................................................
Institutional Service Class shares $ $
</TABLE>

You would pay the following expenses on the same investment if you did not sell
your shares(1):

<TABLE>
<CAPTION>
1 year 3 years
----------------------------------------------------------
<S> <C> <C>
Class B shares $ $
..........................................................
Class C shares $ $
</TABLE>

---------------

(1)Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

14
<PAGE> 18

FUND SUMMARIES -- GARTMORE MILLENNIUM GROWTH FUND

(FORMERLY "NATIONWIDE MID CAP GROWTH FUND")

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long-term capital appreciation.

To achieve its objective, the Fund invests primarily in securities of growth
companies that are creating fundamental changes in the economy. Typically, these
companies are characterized by new or innovative products, services or processes
with the potential to enhance earnings growth. Growth in earnings may lead to an
increase in the price of the stock.

The Fund invests primarily in stocks of companies in the services and
information area, which do business across country borders, although a portion
of its assets may be outside these areas. Companies in the services and
information area primarily include those involved in the fields of
telecommunications, computer systems and software, broadcasting and publishing,
health care, financial services and new age manufacturing.

The Fund has the ability to have up to 20% of its portfolio in short positions.

It generally will sell securities if:

-The price of the security is overvalued.

-The company's earnings are consistently lower than expected.

-More favorable opportunities are identified.

PRINCIPAL RISKS

MID CAP & SMALL CAP RISK. The Fund's investments in smaller, newer companies may
be riskier than investments in larger, more established companies. The stocks of
smaller companies are usually less stable in price and less liquid than the
stocks of larger companies.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" on page .

15
<PAGE> 19

Fund Summaries -- Gartmore Millennium Growth Fund

(formerly "Nationwide Mid Cap Growth Fund")

PERFORMANCE

The following bar chart and table show two aspects of the Fund: volatility and
performance. The bar chart shows the volatility -- or variability -- of the
Fund's annual total returns over time, and shows that Fund performance can
change from year to year. The table shows the Fund's average annual total
returns for certain time periods compared to the returns of a broad-based
securities index. The bar chart and table provide some indication of the risks
of investing in the Fund. Remember, however, that past performance does not
guarantee similar results in the future.

ANNUAL RETURNS -- CLASS D SHARES(1)

Best Quarter: 16.8% 4th qtr. of 1998

Worst Quarter: -14.6% 3rd qtr. of 1998

---------------

(1)These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown.

---------------

(1)These returns reflect performance after sales charges and expenses are
deducted, and include the performance of its predecessor fund prior to May
11, 1998. Beginning September 1, 2000, the Fund's principal investment
strategies were broadened from a focus on mid cap growth stocks.

(2)These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the class (May 11, 1998), and which is the
same as the performance shown for Class D shares through May 11, 1998. The
returns have been restated for sales charges but not for fees applicable to
Class A and B shares. Had Class A or B shares been in existence for the time
periods presented, the performance of Class A and B shares would have been
lower as a result of their additional expenses.

(3)These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the Fund (May 11, 1998), and which is the
same as the performance shown for the Class D shares through May 11, 1998. In
addition, for the period from May 11, 1998 through December 31, 2000 which is
prior to the implementation of Class C shares, the performance of Class C
shares is based on the performance shown for Class D shares. The returns have
been restated for sales charges but not for fees applicable to Class C
shares. Had Class C shares been in existence for the time periods presented,
the performance of Class C shares would have been lower as a result of its
additional expenses.

(4)The Russell Mid Cap Growth Index -- an unmanaged index of medium-size U.S.
companies -- gives a broad look at how the stock price of medium size U.S.
companies have performed. These returns do not include the effect of any
sales charges or expenses. If sales charges and expenses were deducted, the
actual returns of this index would be lower.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

16
<PAGE> 20

Annual Fund Operating Expenses Class A Class B Class C Class D
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 1.03% 1.03% 1.03% 1.03%
.....................................................................
Distribution and/or Service 0.25% 1.00% 1.00% None
(12b-1) Fees
.....................................................................
Other Expenses % % % %
---------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
.....................................................................
Amount of Fee Waiver/ % % % %
Expense Reimbursement
---------------------------------------------------------------------
NET EXPENSES AFTER WAIVERS(6) 1.63% 2.23% 2.23% 1.30%
</TABLE>

---------------

(1)If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2)As the amount of your investment increases, the sales charge imposed on the
purchase of Class A and Class D shares decreases. For more information, see
"Buying, Selling and Exchanging Fund Shares -- Buying Shares -- Class A,
Class D and Class C sales charges" on page .

(3)A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(4)A CDSC ranging from 5% to 1% is charged when you sell Class B shares within
the first six years of purchase. Class B shares are converted to Class A
shares after you have held them for seven years. See "Buying, Selling and
Exchanging Fund Shares -- Selling Shares -- Contingent deferred sales charge
(CDSC) on Class A, Class B and Class C shares" on page .

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6)VMF, the Fund's investment adviser, and the Fund have entered into a written
contract limiting operating expenses to those listed in "Net Expenses After
Waivers" through February 28, 2002.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
only one year. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1)Expenses paid on the same investment in Class A and Class D shares do not
change whether or not you sell your shares.

17
<PAGE> 21

FUND SUMMARIES -- GARTMORE VALUE OPPORTUNITIES FUND

(FORMERLY "NATIONWIDE VALUE OPPORTUNITIES FUND")

MARKET CAPITALIZATION is a common
way to measure the size of a
company based on the price of its
common stock; it's simply the
number of outstanding shares of
the company multiplied by the
current share price.

The Fund invests primarily in
stocks of U.S. and foreign
companies, which it considers to
be "value" companies. These
companies have good earnings
growth potential and the Fund's
subadviser believes that the
market has undervalued them. The
Fund will also invest in
unrecognized stocks and stocks of
special situation companies and
turnarounds (companies that have
experienced significant business
problems but which the subadviser
believes have favorable prospects
for recovery).

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long-term capital appreciation through investment in common
stocks or their equivalents.

VMF has selected NorthPointe Capital LLC
as a subadviser to manage the Fund's
portfolio on a day to day basis. The Fund
pursues its investment objective by
investing, under normal market
conditions, at least 65% of its total
assets in equity securities of companies whose equity market capitalizations at
the time of investment are similar to the market capitalizations of companies in
the Russell(R) 2000 Index(1), known as small cap companies. The Russell 2000,

published by the Frank Russell Company,
is an index consisting of approximately
2,000 companies known as "small cap"
companies which have small market
capitalizations relative to the market
capitalizations of other U.S. companies.
On December 29, 2000, the market
capitalizations of companies in the
Russell 2000 ranged from $ million to
$ billion. The Frank Russell Company annually updates the market capitalization
range for the Russell 2000 Index.

Smaller capitalization companies are often undervalued for one of the following
reasons: (1) institutional investors, which currently represent a majority of
the trading volume in the shares of publicly traded companies, are often less
interested in smaller capitalization companies because of the difficulty of
acquiring a meaningful position without purchasing a large percentage of the
company's outstanding equity securities; and (2) such companies may not be
regularly researched by

---------------

(1)The Russell 2000(R) Index is a registered service mark of The Frank Russell
Company which does not sponsor and is in no way affiliated with the Fund.

securities analysts, which could result in greater discrepancies in valuation.

In addition to investing in small cap companies, the Fund may also invest in
larger capitalization companies and in real estate investment trusts (REITs).

The subadviser will consider selling a security if there are more attractive
securities available, if the business environment is changing or to control the
overall risk of the portfolio.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by the subadviser's ability to assess economic conditions and
investment opportunities.

STOCK MARKET RISK. Stock market risk is the risk that the Fund could lose value
if the individual stocks in which the Fund has invested or the overall stock
markets in which they trade go down. Individual stocks and the overall stock
market may experience short-term volatility as well as extended periods of
decline or little growth. Individual stocks are affected by factors such as
corporate earnings, production, management and sales. Individual stocks may also
be affected by the demand for a particular type of stock, such as growth stocks
or the stocks of companies with a particular market capitalization. Stock
markets are affected by numerous factors, including interest rates, the outlook
for corporate profits, the health of the national and world economies, national
and world social and political events, and the fluctuations of other stock
markets around the world.

SMALL CAP RISK. The Fund's investments in smaller, newer companies may be
riskier than investments in larger, more established companies. The stocks of
smaller companies are usually less stable in price and less liquid than the
stocks of larger companies.

MARKET TRENDS RISK. Different types of stocks tend to shift into and out of
favor with stock market investors depending on market and economic conditions.
For instance, from time to time the stock market may not favor growth-oriented
stocks. Rather, the market could favor value securities or may not favor equity
securities at all. Accordingly, since the Fund focuses on growth-style stocks,
performance may at times be better or worse than the performance of stock funds

18
<PAGE> 22

that focus on other types of stocks, or that have a broader investment style.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" beginning on page .

PERFORMANCE

The following bar chart and table present the performance of the Fund. The bar
chart shows the Fund's annual total return. The table shows the Fund's average
annual total returns for certain time periods compared to the returns of a
broad-based securities index. The bar chart and table provide some indication of
the risks of investing in the Fund. Remember, however, that past performance
does not guarantee similar results in the future.

ANNUAL RETURNS -- CLASS A SHARES(1)

--------------------------------------------------------------
<S> <C> <C>
1/1/00-12/31/00 26.81%
</TABLE>

Best quarter: % nd qtr. of 2000
Worst quarter: % rd qtr. of 2000

---------------

(1)These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown.

<TABLE>
<CAPTION>
One Since
Average annual returns(1) -- as of December 31, 2000 year Inception(2)
------------------------------------------------------------------------------
<S> <C> <C>
Class A shares % %
..............................................................................
Class B shares % %
..............................................................................
Class C shares(3) % %
..............................................................................
Institutional Service Class shares % %
..............................................................................
Russell 2000 Index(4) % %
</TABLE>

---------------

(1)These returns reflect performance after sales charges, if any, and expenses
are deducted.

(2)The Fund began operations on December 30, 1999.

(4)The Russell 2000 Index is an unmanaged index of securities of small
capitalization U.S. companies. These returns do not include the effect of any
sales charges or expenses. If sales charges and expenses were deducted, the
actual return of this Index would be lower.

19
<PAGE> 23

Fund Summaries -- Gartmore Value Opportunities Fund

(formerly "Nationwide Value Opportunities Fund")

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Institutional
Service
Shareholder Fees(1) Class A Class B Class C Class
(paid directly from your investment) shares shares shares shares
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) imposed 5.75%(2) None 1.00% None
on purchases (as a percentage of
offering price)
.................................................................................
Maximum Deferred Sales Charge (Load) None(3) 5.00%(4) 1.00%(5) None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

<TABLE>
<CAPTION>
Institutional
Service
Annual Fund Operating Expenses Class A Class B Class C Class
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.70% 0.70% 0.70% 0.70%
...........................................................................
Distribution and/or Service 0.25% 1.00% 1.00% None
(12b-1) Fees
...........................................................................
Other Expenses % % % %
---------------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
...........................................................................
Amount of Fee Waiver/ % % % %
Expense Reimbursement
---------------------------------------------------------------------------
NET EXPENSES AFTER WAIVERS(6) 1.35% 1.95% 1.95% 1.00%
</TABLE>

---------------

(1)If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(3)A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(4)A CDSC ranging from 5% to 1% is charged when you sell Class B shares within
the first six years of purchase. Class B shares are converted to Class A
shares after you have held them for seven years. See "Buying, Selling and
Exchanging Fund Shares -- Selling Shares -- Contingent deferred sales charge
(CDSC) on Class A, Class B and Class C shares" on page .

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
only one year. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1)Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

20
<PAGE> 24

MORE ABOUT THE FUNDS

PRINCIPAL INVESTMENTS AND TECHNIQUES

The Funds may use the following additional principal investments and techniques
to increase returns, protect assets or diversify investments. As with any mutual
fund, there can be no guarantee that a Fund will meet its goals or that its
performance will be positive for any period of time.

The Statement of Additional Information (SAI) contains additional information
about all of the Funds, including the Funds' other investment techniques. To
obtain a copy of the SAI, see the back cover.

CONVERTIBLE SECURITIES. (VALUE OPPORTUNITIES, GROWTH, MILLENNIUM GROWTH,
GARTMORE NATIONWIDE AND GROWTH 20) Each of the Funds may invest in convertible
securities -- also known as convertibles -- including bonds, debentures, notes,
preferred stocks and other securities. Convertibles are hybrid securities that
have characteristics of both bonds and stocks. Like bonds, they pay interest.
Because they can be converted into common stock within a set period of time, at
a specified price or formula, convertibles also offer the chance for capital
appreciation, like common stock.

Convertibles tend to be more stable in price than the underlying common stock,
although price changes in the underlying common stock can affect the
convertible's market value. For example, as the underlying common stock loses
value, convertibles present less opportunity for capital appreciation, and may
also lose value. Convertibles, however, may sustain their value better than
common stock because they pay income, which tends to be higher than common stock
dividend yields.

Because of this fixed-income feature, convertibles may compete with bonds as a
good source of dependable income. Therefore, if interest rates increase and
"newer," better paying bonds become more attractive, the value of convertibles
may decrease. Conversely, if interest rates decline, convertibles could increase
in value.

Convertibles tend to be more secure than common stock (companies must pay
holders of convertibles before they pay holders of common stock), but they are
typically less secure than similar non-convertible securities such as bonds
(bondholders must generally be paid before holders of convertibles and common
stock). Because convertibles are usually subordinate to bonds in terms of
payment priority, convertibles typically are rated below investment grade by a
rating agency, or they are not rated at all.

PREFERRED STOCK. (VALUE OPPORTUNITIES) Holders of preferred stocks normally have
the right to receive dividends at a fixed rate but do not participate in other
amounts available for distribution by the issuer. Dividends on preferred stock
may be cumulative, and cumulative dividends must be paid before common
shareholders receive any dividends. Because preferred stock dividends usually
must be paid before common stock dividends, preferred stocks generally entail
less risk than common stocks. Upon liquidation, preferred stocks are entitled to
a specified liquidation preference, which is generally the same as the par or
stated value, and are senior in right of payment to common stock. Preferred
stocks do not represent a liability of the issuer and, therefore, do not offer
as great a degree of protection of capital or assurance of continued income as
investments in corporate debt securities. In addition, preferred stocks are
generally subordinated in right of payment to all debt obligations and creditors
of the issuer, and convertible securities may be subordinated to other preferred
stock of the same issuer.

WARRANTS. (VALUE OPPORTUNITIES) A warrant is a security that gives the holder of
the warrant the right to buy common stock at a specified price for a specified
period of time. Warrants are considered speculative and have no value if they
are not exercised before their expiration date.

REITS. (VALUE OPPORTUNITIES) The Fund may invest in real estate investment
trusts (REITS). REITS are pooled investment vehicles which invest primarily in
income producing real estate or real estate related loans or interests. REITs
are generally classified as equity REITs, mortgage REITs or hybrid REITs. Equity
REITs invest the majority of their assets directly in real property and derive
income primarily from the collection of rents. Equity REITs can also realize
capital gains by selling properties that have appreciated in value. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
income from the collection of interest payments. Hybrid REITs combine the
investment strategies of Equity REITs and Mortgage REITs.

REITS involve certain risks that are associated with direct ownership of real
estate and with the real estate industry in general. These risks include, among
others, possible declines in the value of real estate, possible lack of
availability of mortgage funds, and expected vacancies of properties.

SHORT SALES. (GROWTH, MILLENNIUM GROWTH AND GROWTH 20) In selling a stock which
the Fund does not own (a short sale), the Fund may borrow the security sold
short to make delivery to the buyer. The Fund must then replace the security it
has borrowed. If the price of a security sold short

21
<PAGE> 25

More About the Funds

goes up between the time of the short sale and the time the Fund must deliver
the security to the lender, the Fund will incur a loss. The Fund must also pay
the lender any interest accrued during the period of the loan.

PRINCIPAL RISKS

SMALL CAP RISK. (VALUE OPPORTUNITIES, GROWTH 20 AND MILLENNIUM
GROWTH) Historically, the securities of small cap companies have been more
volatile in price than larger company securities, especially over the short
term. Among the reasons for the greater price volatility are the less certain
growth prospects of small companies, the lower degree of liquidity in the
markets for such securities, the greater impact caused by changes in investor
perception of value, and the greater sensitivity of small cap companies to
changing economic conditions. In addition, small cap companies may:

- Lack depth of management.

- Lack a proven track record.

- Be unable to generate funds necessary for growth or development.

- Be developing or marketing new products or services for which markets are
not yet established and may never become established.

- Market products or services which may become quickly obsolete.

Small cap companies in the technology and biotechnology industries may be
subject to abrupt or erratic price movements. Therefore, while small cap
companies may offer greater opportunities for capital growth than larger, more
established companies, they also involve greater risks and should be considered
speculative.

NON-DIVERSIFICATION RISK. (GROWTH 20) As a non-diversified fund, the Fund has
the ability to invest a larger portion of its assets in a smaller number of
issuers. Because the appreciation or depreciation of a single stock may have a
greater impact on the net asset value (NAV) of the Fund and its performance, its
share price can be expected to fluctuate more than a comparable diversified
fund. This fluctuation, if significant, may affect the performance of the Fund.
With regard to the Fund, such risks are increased because the Fund normally
concentrates its investments in a core group of twenty to thirty common stocks.

DERIVATIVES. (GROWTH 20) A derivative is a contract whose value is based on the
performance of an underlying financial asset, index or other investment. For
example, an option is a derivative because its value changes in relation to the
performance of an underlying stock. The value of an option on a futures contract
varies with the value of the underlying futures contract, which in turn varies
with the value of the underlying commodity or security. Derivatives are
available based on the performance of assets, interest rates, currency exchange
rates, and various domestic foreign indexes. Derivatives afford leverage and can
also be used in hedging portfolios.

FOREIGN RISK. (GROWTH 20 AND VALUE OPPORTUNITIES) Foreign security investing
involves special risks not presented by U.S. investing that can increase the
chances that a Fund will lose money.

- COUNTRY. General securities market movements in any country in which a Fund
has investments, are likely to affect the value of a Fund's securities that
trade in that country. These movements will affect a Fund's share price and a
Fund's performance. The political, economic and social structures of some
countries in which a Fund invests may be less stable and more volatile than
those in the U.S. The risks of investing in these countries include the
possibility of the imposition of exchange controls, currency devaluations,
foreign ownership limitations, expropriation, restrictions on removal of
currency or other assets, nationalization of assets, punitive taxes and
certain custody and settlement risks.

- FOREIGN MARKETS. Because there are generally fewer investors in foreign
markets and a smaller number of securities traded each day, it may make it
difficult for a Fund to buy and sell certain securities. In addition, prices
of foreign securities may go up and down more than prices of securities
traded in the U.S. Also, brokerage commissions and other costs of buying and
selling securities often are higher in foreign countries than they are in the
U.S. This reduces the amount a Fund can earn on its investments.

22
<PAGE> 26

securities less than the U.S. does. Other countries may not have laws to
protect investors the way that the U.S. securities laws do. Accounting
standards in other countries are not necessarily the same as in the U.S. If
the accounting standards in another country do not require as much detail as
U.S. accounting standards, it may be harder for the Fund's portfolio
manager(s) to completely and accurately determine a company's financial
condition.

- CURRENCY. A significant portion of a Fund's investments will generally be
denominated in foreign currencies. Changes in foreign currency exchange rates
will affect the value of what a Fund owns as well as a Fund's share price.
Generally, when the U.S. dollar rises in value against a foreign currency, an
investment in that country loses value because that currency is worth fewer
U.S. dollars. Devaluation of currency by a country's government or banking
authority also has a significant impact on the value of any securities
denominated in that currency. In addition, if the currency in which a Fund
receives dividends, interest or other payments declines in value against the
U.S. dollar before such income is distributed as dividends to shareholders or
converted to U.S. dollars, the Fund may have to sell portfolio securities to
obtain sufficient cash to pay such dividends.

RISK ASSOCIATED WITH VALUE STOCKS. (VALUE OPPORTUNITIES, LARGE CAP VALUE) Due
to their relatively low valuations, value stocks are typically less volatile
than growth stocks. In comparison, a growth stock's price may be more directly
linked to market developments than a value stock's price. However, value stocks
tend to have higher dividend yields than growth stocks. This means they depend
less on price changes for returns. Accordingly, they might not participate in
upward market movements, but may be less adversely affected in a down market
compared to lower yielding stocks.

TEMPORARY DEFENSIVE POSITIONS

In response to economic, political or unusual market conditions, each of the
Funds may invest up to 100% of its assets in cash or money market obligations.
Should this occur, a Fund will not meet its investment objectives and may miss
potential market upswings.

23
<PAGE> 27

MANAGEMENT

INVESTMENT ADVISER

Villanova Mutual Fund Capital Trust (VMF), 1200 River Road, Conshohocken,
Pennsylvania 19428, manages the investment of the Funds' assets and supervises
the daily business affairs of the Funds. VMF was organized in 1999 and advises
mutual funds. As of December 31, 2000, VMF and its affiliates had approximately
$ billion in assets under management.

The Gartmore Growth Fund, Gartmore Nationwide Fund, Gartmore Millennium Growth
Fund, Gartmore Value Opportunities Fund and Nationwide Large Cap Value Fund each
pay VMF a management fee which is based on the Fund's average daily net assets.
The management fees paid, including fees paid to subadvisers where applicable,
by the Funds for the fiscal year ended October 31, 2000, expressed as a
percentage of a Fund's average daily net assets, and not taking into account any
applicable waivers are set forth in the following table:

<TABLE>
<S> <C>
Gartmore Growth Fund 0.58%
............................................................
Gartmore Nationwide Fund 0.56%
............................................................
Gartmore Millennium Growth Fund* %
............................................................
Gartmore Value Opportunities Fund %
............................................................
Nationwide Large Cap Value Fund 0.75%
</TABLE>

---------------

* At a recent shareholder meeting, shareholders of the Gartmore Millennium
Growth Fund approved a fee change for the Fund. That management fee (listed
below) became effective August 1, 2000 and is based on the Fund's average
daily net assets:

<TABLE>
<CAPTION>
Assets Fee
-----------------------------------------------------
<S> <C>
up to $250 million 1.03%
.....................................................
$250 million - $1 billon 1.00%
.....................................................
$1 billion - $2 billon 0.97%
.....................................................
$2 billion - $5 billon 0.94%
.....................................................
$5 billion + 0.91%
</TABLE>

The Gartmore Growth 20 Fund pays VMF a base management fee which may be adjusted
upward or downward depending on the Fund's performance relative to its
benchmark, the S&P 500 Index. If the Fund outperforms its benchmark by a set
amount, the Fund will pay higher management fees. Conversely, if the Fund
underperforms its benchmark by a set amount, the Fund will pay lower fees. The
Fund's SAI contains detailed information about any possible performance based
adjustments to the management fee. The management fee is based on the Fund's
average daily net assets and includes breakpoints so fees decrease as assets
increase:

<TABLE>
<CAPTION>
Min Base Max
Assets Fee Fee Fee
--------------------------------------------------------
<S> <C> <C> <C>
up to $500 million 0.68% 0.90% 1.12%
........................................................
$500 million -- $2 billion 0.62% 0.80% 0.98%
........................................................
$2 billion + 0.59% 0.75% 0.91%
</TABLE>

The total management fee paid by the Gartmore Growth 20 Fund for the period
ended October 31, 2000, expressed as a percentage of the Fund's average daily
net assets and not taking into account any applicable waivers was %.

MULTI-MANAGER STRUCTURE (LARGE CAP VALUE)

VMF and the Trust have received from the Securities and Exchange Commission an
exemptive order for a multi-manager structure that allows VMF to hire, replace
or terminate a subadviser (except hiring a subadviser which is an affiliate of
VMF) without the approval of shareholders. The order also allows VMF to revise a
subadvisory agreement with a non-affiliate subadviser with Trustee approval but
without shareholder approval. Currently, the Large Cap Value Fund is subadvised
by NorthPointe, an affiliate of VMF, but if a new non-affiliate subadviser is
hired, shareholders will receive information about the new subadviser within 90
days of the change. The order allows that Fund to operate more efficiently and
with greater flexibility.

-VMF provides the following oversight and evaluation services to the Large Cap
Value Fund:

- Performing initial due diligence on prospective subadvisers for the Fund.

- Monitoring the performance for the subadvisers through ongoing analysis, as
well as periodic consultations.

- Communicating performance expectations and evaluations to the subadvisers.

- Ultimately recommending to the Board of Trustees whether a subadviser's
contract should be renewed, modified or terminated.

VMF does not expect to recommend frequent changes of subadvisers. VMF will
periodically provide written reports to the Board of Trustees regarding the
results of its evaluation and monitoring functions. Although VMF will monitor
the performance of the subadvisers, there is no certainty that any subadviser or
the Fund will obtain favorable results at any given time.

24
<PAGE> 28

PORTFOLIO MANAGERS

GARTMORE GROWTH FUND

Christopher Baggini is the Fund's portfolio manager. As portfolio manager, Mr.
Baggini is responsible for the day-to-day management of the Fund and the
selection of the Fund's investments.

Mr. Baggini joining VMF in March 2000, Prior to joining VMF, Mr. Baggini was a
Portfolio Manager for Allied Investment Advisors.

GARTMORE NATIONWIDE FUND

Portfolio Managers: Charles Bath and William H. Miller are co-portfolio managers
of the Gartmore Nationwide Fund. Mr. Bath has either managed or co-managed the
Nationwide Fund and its predecessor since 1985. Mr. Bath also previously managed
the Capital Appreciation Fund of the Nationwide Separate Account Trust (NSAT)
from 1992 to March 31, 2000 and currently co-manages the NSAT Total Return Fund.
Mr. Bath has been with VMF or its predecessors since 1985.

Mr. Miller began co-managing the Fund and the NSAT Total Return Fund on
September 1, 2000. Prior to joining VMF in July 1999, Mr. Miller held the
following positions: Senior Portfolio Manager, Putnam Investments (1997-1999);
Vice President and Assistant Portfolio Manager, Delaware Management Company
(1995-1997).

GARTMORE MILLENNIUM GROWTH FUND

Aaron Harris has managed the Gartmore Millennium Growth Fund since joining VMF
in April 2000. Prior to joining VMF, Mr. Harris was a Portfolio Manager,
managing portions of several portfolios for Nicholas-Applegate Capital
Management.

GARTMORE GROWTH 20 FUND

Christopher Baggini and Aaron Harris are the co-portfolio managers of the Fund.
As co-portfolio managers, they are responsible for the day-to-day management of
the Fund and the selection of the Fund's investments.

Mr. Baggini joined VMF in March 2000. Prior to joining VMF, Mr. Baggini was a
Portfolio Manager for Allied Investment Advisors.

Aaron Harris joined VMF in April 2000. Prior to joining VMF, Mr. Harris was a
Portfolio Manager for Nicholas-Applegate Capital Management, managing portions
of several portfolios for Nicholas-Applegate Capital Management.

SUBADVISER

NATIONWIDE LARGE CAP VALUE FUND AND GARTMORE VALUE OPPORTUNITIES FUND

NorthPointe Capital, LLC (NorthPointe), 101 West Big Beaver, Suite 1125, Troy,
Michigan 48084 is the subadviser for both the Gartmore Value Opportunities Fund
and Gartmore Large Cap Value Fund. Subject to the supervision of VMF and the
Trustees, NorthPointe will manage the assets in accordance with each Fund's
investment objective and strategies. NorthPointe will make investment decisions
for the Funds and, in connection with such investment decisions, places purchase
and sell orders for securities. NorthPointe was organized in 1999 and manages
the Funds, as well as institutional accounts. Prior to March 1, 2001, the
Gartmore Large Cap Value Fund was known as the Prestige Large Cap Value Fund and
was managed by Brinson Partners, Inc.

Jeffrey C. Petherick and Mary C. Champagne are co-portfolio managers of the
Value Opportunities Fund. Mr. Petherick and Ms. Champagne joined NorthPointe in
January 2000, and since June 1995, have co-managed institutional and retail
small cap value equity investments at Loomis, Sayles & Company, L.P., including
the Loomis Sayles Small Cap Value Fund.

Peter James Cahill is the lead portfolio manager of the Nationwide Large Cap
Value Fund. He will be assisted by Mr. Petherick and Ms. Champagne in the Fund's
management. Mr. Cahill joined NorthPointe in January 2000. He was with Loomis,
Sayles & Company L.P. from May 1997 to January 2000 as a quantitative
researcher. Prior to May 1997, Mr. Cahill was a quantitative researcher for Bank
of America.

25
<PAGE> 29

BUYING, SELLING AND EXCHANGING FUND SHARES

CHOOSING A SHARE CLASS

As noted in the Fund Summaries, each Fund offers different share classes to give
investors different price and cost options. The Class A, Class B and Class C
shares of the Funds are available to all investors; Class D and Institutional
Service Class shares are available to a limited group of investors.

The following sales charges will generally apply:

Front-end Sales Charge when you purchase:

Class A shares

Class C shares

Class D shares

Contingent Deferred Sales Charge (CDSC)*:

Class B shares if you sell your shares within six years of purchase

Class C shares if you sell your shares within one year of purchase

No Sales Charges on Institutional Service Class shares

Sales charges are paid to the Funds' distributor, Villanova Distribution
Services, Inc. (the Distributor), which either retains them or pays them to a
selling representative.

Class A, Class B and Class C shares pay distribution and/or service fees under a
Distribution Plan. These fees are either retained by the Distributor or paid by
the Distributor to brokers for distribution and shareholder services.

Class A, Class D and Institutional Service Class shares may also pay
administrative service fees. These fees are paid to brokers and other entities
who provide administrative support services to the beneficial owners of the
shares.

If you want lower annual fund expenses, Class A shares (and Class D and
Institutional Service Class shares if they are available and you are eligible to
purchase them) may be right for you, particularly if you qualify for a reduction
or waiver of sales charges. If you do not want to pay a front-end sales charge,
and you anticipate holding your shares for the long term, Class B shares may be
more appropriate. If you wish to pay a lower up-front sales charge than you
would for Class A share and are uncertain as to how long you may hold your
shares, Class C shares may be right for you. The Funds reserve the right to
reject an order in excess of $ for Class B shares and an order for
Class B shares for Individual Retirement Accounts (IRA accounts) for
shareholders 70 1/2 years old and older.

WHEN CHOOSING A SHARE CLASS, CONSIDER THE FOLLOWING:

<TABLE>
<CAPTION>
Class A and Class D shares Class B shares Class C shares
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Front-end sales charge means that a No front-end sales charge, so your Front-end sales charge means that a
portion of your initial investment full investment immediately goes portion of your initial investment
goes toward the sales charge, and is toward buying shares goes toward the sales charge and is
not invested not invested. Front-end sales charge
on Class C is lower than Class A and
Class D
....................................................................................................................
Reductions and waivers of the sales No reductions of the CDSC available, Like Class B shares, no reductions
charge available but waivers available of the CDSC are available, but
waivers are available
....................................................................................................................
Lower expenses than Class B and Higher distribution and service fees Higher distribution and service fees
Class C shares mean higher dividends than Class A and Class D shares mean than Class A shares mean higher fund
per share higher fund expenses and lower expenses and lower dividends per
dividends per share share
....................................................................................................................
Conversion features are not After seven years, Class B shares Unlike Class B shares, Class C
applicable convert into Class A shares, which shares do not automatically convert
reduces your future fund expenses into another class
....................................................................................................................
No sales charge when shares are sold CDSC if shares are sold within six CDSC of 1% is applicable if shares
back to the Fund* years: 5% in the first year, 4% in are sold in the first year after
the second, 3% in the third and purchase
fourth years, 2% in the fifth, and
1% in the sixth year
....................................................................................................................
No maximum investment limit Maximum amount permitted to be Maximum amount permitted to be
invested $________ invested $________
</TABLE>

---------------

*A CDSC of up to 1% may be charged on certain redemptions of Class A shares
purchased without a sales charge.

26
<PAGE> 30

For investors who are eligible to purchase Class D or Institutional Service
Class shares, the purchase of such shares will be preferable to purchasing Class
A, Class B or Class C shares.

WHO CAN BUY INSTITUTIONAL SERVICE CLASS SHARES

The Institutional Service Class shares are available for purchase only by the
following:

- retirement plans introduced by persons not associated with brokers or
dealers that are primarily engaged in the retail securities business and
roll-over individual retirement accounts from such plans

- tax-exempt employee benefit plans for which third party administrators
provide recordkeeping services and are compensated by the Fund for such
services

- a bank, trust company or similar financial institution investing for its
own account or for the account of its trust customers for whom such
financial institution is exercising investment discretion in purchasing
Institutional Service Class shares, where the investment is part of a
program that collects an administrative service fee

- registered investment advisers investing on behalf of institutions and
high net-worth individuals where the adviser is compensated by the Fund for
services it provides

- life insurance separate accounts to fund the benefits of variable annuity
contracts issued to governmental entities as an investment option under
their deferred compensation plans as defined under Section 457 of the
Internal Revenue Code (the Code) or qualified plans adopted pursuant to
Section 401(a) of the Code.

WHO CAN BUY CLASS D SHARES

Class D shares are available for purchase by the following:

- Investors who received Class D shares of a Fund in the reorganization of
Nationwide Investing Foundation I, Nationwide Investing Foundation II and
Financial Horizons Investment Trust into Nationwide Mutual Funds in May 1998

- Persons eligible to purchase Class D shares without a sales charge as
described below or in the SAI

BUYING SHARES

PURCHASE PRICE. The purchase or "offering" price of each share of a Fund is its
"net asset value" (NAV) next determined after the order is received, plus any
applicable sales charge. A separate NAV
is calculated for each class of a Fund.
Generally, NAV is based on the market
value of the securities owned by a Fund
less its liabilities. The NAV for a class
is determined by dividing the total
market value of the securities owned by a
Fund, allocable to such class, less the
liabilities allocated to that class, by
the total number of that class'
outstanding shares. NAV is determined at
the close of regular trading on the New
York Stock Exchange (usually 4 p.m.
Eastern Time) on each day the Exchange is
open for trading.

The Funds do not calculate NAV on the following days:

- New Year's Day
- Martin Luther King, Jr. Day
- Presidents' Day
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day

- Christmas Day

- Other days when the New York Stock Exchange is not open.

MINIMUM INVESTMENTS --

CLASS A, B AND C SHARES

To open an account (per Fund) $1,000

......................................................

Through the Automatic Asset

Accumulation plan per
transaction $25

......................................................

Additional investments (per Fund) $100
MINIMUM INVESTMENTS -- CLASS D
To open an account (per Fund) $250

......................................................

Through the Automatic Asset

Accumulation plan per
transaction $25

......................................................

Additional investments $25

MINIMUM INVESTMENTS -- INSTITUTIONAL SERVICE CLASS
SHARES

To open an account $

......................................................

Additional investments $

--------------------------------------------------------------

If you purchase shares through an account at a broker,
different minimum account requirements may apply.
These minimum investment requirements do not apply to
certain retirement plans. Call 1-800-848-0920 for more
information.

27
<PAGE> 31

Buying, Selling and Exchanging Fund Shares

Each Fund reserves the right not to determine NAV when:

- It has not received any orders to purchase, sell or exchange shares.

- Changes in the value of that Fund's portfolio do not affect the NAV.

If current prices are not available for a security, or if Villanova SA Capital
Trust (VSA), as the Funds' administrator, or its agent, determines a price does
not represent fair value, a Fund's investments may be valued at fair value in
accordance with procedures adopted by the Board of Trustees. To the extent that
a Fund's investments are traded in markets that are open when the New York Stock
Exchange is closed, the value of the Fund's investments may change on days when
shares cannot be purchased or redeemed.

IN-KIND PURCHASES. The Funds reserve the right to accept payment for shares in
the form of securities that are permissible investments for the Funds.

CLASS A, CLASS D AND CLASS C SALES CHARGES

The charts below show the Class A and Class D sales charges, which decrease as
the amount of your investment increases.

CLASS A SHARES

<TABLE>
<CAPTION>
Sales charge
Sales charge as % of
as % of amount
Amount of purchase offering price invested
------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 5.75% 6.10%
..................................................................
$50,000 to $99,999 4.50 4.71
..................................................................
$100,000 to $249,999 3.50 3.63
..................................................................
$250,000 to $499,999 2.50 2.56
..................................................................
$500,000 to $999,999 2.00 2.04
..................................................................
$1 million to $24,999,999 0.50 0.50
..................................................................
$25 million or more 0.25 0.25
</TABLE>

CLASS D SHARES

<TABLE>
<CAPTION>
Sales charge
Sales charge as % of
as % of amount
Amount of purchase offering price invested
------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 4.50% 4.71%
..................................................................
$50,000 to $99,999 4.00 4.17
..................................................................
$100,000 to $249,999 3.00 3.09
..................................................................
$250,000 to $499,999 2.50 2.56
..................................................................
$500,000 to $999,999 1.00 1.01
..................................................................
$1 million to $24,999,999 0.50 0.50
..................................................................
$25 million or more None None
</TABLE>

CLASS C SHARES

Sales of Class C shares will be charged a sales charge of 1.00% of the offering
price (1.01% of the amount invested).

CLASS A FINDERS' FEES

For certain sales of Class A shares at net asset value to employer sponsored
retirement plans (other than those investing in the Funds through a variable
insurance product) which are subject to a CDSC as described below, the Funds
will pay a finder's fee to the dealer at the time of purchase. For the dealer to
be eligible for the finder's fee, the following requirements apply:

- The purchase of shares must be made by one employer-sponsored retirement
plan within a twelve month period from the initial purchase of any Nationwide
Mutual Funds (Nationwide Funds) Class A shares.

- The purchase can be made in any combination of Nationwide Funds.

- The employer sponsored plan will be subject to a CDSC for shares redeemed in
any employer initiated redemption within the first three years of purchase
(the applicable CDSC will be charged as described below).

If these conditions are met, a finder's fee will be paid on the purchase at the
following rates:

- 1.00% for sales of the Nationwide Funds of $1 million and more but less
than $3 million.

- 0.50% for sales of the Nationwide Funds of $3 million and more but less
than $50 million.

- 0.25% for sales of the Nationwide Funds of $50 million or more.

28
<PAGE> 32

REDUCTION AND WAIVER OF CLASS A AND CLASS D SALES CHARGES

Shareholders can reduce or eliminate Class A and Class D shares' initial sales
charge through one or more of the discounts described below:

- An increase in the amount of your investment. The tables above show how the
sales charge decreases as the amount of your investment increases.

- Family Member Discount. Members of your family who live at the same address
can combine investments in the Nationwide Funds (except purchases of the
Nationwide Money Market Fund), possibly reducing the sales charge.

- Lifetime Additional Discount. You can add the value of any of the Nationwide
Funds Class A and Class D shares you already own (except the Nationwide
Money Market Fund) with the value of the shares you are purchasing, which
may reduce the applicable sales charge.

- Insurance Proceeds or Benefits Discount Privilege. If you use the proceeds
of an insurance policy issued by any member of the Nationwide Insurance
Enterprise to purchase Class A or Class D shares, you will pay one-half of
the published sales charge if you make your investment 60 days after
receiving the proceeds.

- No sales charge on a repurchase. If you sell Fund shares from your account,
we allow you a one-time privilege to reinvest some or all of the proceeds in
shares of the same class. You will not pay a sales charge on Class A and
Class D shares that you buy within 30 days of selling Class A or Class D
shares of an equal or lesser amount if you have already paid a sales charge.
Remember, if you realize a gain or a loss on your sale of shares, the
transaction is taxable and reinvestment will not affect the amount of
capital gains tax that is due. If you realize a loss on your sale and you
reinvest, some or all of the loss may not be allowed as a tax deduction
depending on the amount you reinvest.

- Letter of Intent Discount. State in writing that during a 13-month period
you or a group of family members who live at the same address will purchase
or hold at least $50,000 in Class A or Class D shares (excluding the
Nationwide Money Market Fund) and your sales charge will be based on the
total amount you intend to invest. The letter may be backdated up to 90 days
to include previous purchases for determining your sales charge. Your Letter
of Intent is not a binding obligation to buy shares of the Fund; it is
merely a statement of intent. Call 1-800-848-0920 for more information.

WAIVER OF CLASS A AND CLASS D SALES CHARGES

The Class A and Class D sales charges will be waived for the following
purchases:

- Any person purchasing through an account with an unaffiliated brokerage firm
that has an agreement with the Distributor to waive sales charges for those
persons. (Class A shares only)

- Directors, officers, full-time employees, sales representatives and their
employees or any investment advisory clients of a broker-dealer having a
dealer/selling agreement with the Distributor. (Class A shares only)

- Any person who pays for the shares with the proceeds of a sale of
non-Nationwide mutual fund shares. To qualify, you must have paid an initial
sales charge or CDSC on the shares sold. You must purchase the Class A
shares within 60 days of the sale, and you must request the waiver when you
purchase the Class A shares (the Funds may require evidence that you qualify
for this waiver). (Class A shares only)

- Employer-sponsored retirement plans, including pension, profit sharing or
deferred compensation plans which are qualified under sections 401(a),
403(b) or 457 of the Internal Revenue Code. (Class A shares only).

- Trustees and retired Trustees of Nationwide Mutual Funds (including its
predecessor Trusts). (Both Class A and Class D shares for those funds which
have Class D shares)

- Directors, officers, full-time employees, sales representatives and their
employees, and retired directors, officers, employees, and sales
representatives, their spouses, children or immediate relatives (including
mother, father, brothers, sisters, grandparents and grand-children) and
immediate relatives of deceased employees of any member of the Nationwide
Insurance and Nationwide Financial companies, or any investment advisory
clients of VMF, VSA and their affiliates. (Both Class A and Class D shares
for those funds which have Class D shares)

29
<PAGE> 33

Buying, Selling and Exchanging Fund Shares

- Directors, officers, full-time employees, their spouses, children or
immediate relatives and immediate relatives of deceased employees of any
sponsor group which may be affiliated with the Nationwide Insurance and
Nationwide Financial companies from time to time (including, but not limited
to, Farmland Insurance Industries, Inc., Maryland Farm Bureau, Inc., Ohio
Farm Bureau Federation, Inc., Pennsylvania Farmers' Association, Ruralite
Services, Inc., and Southern States Cooperative). (Both Class A and Class D
shares for those funds which have Class D shares)

Additional investors eligible for sales charge waivers may be found in the SAI.

CONVERSION OF CLASS B SHARES

After you have held your Class B shares for seven years, we will automatically
convert them into Class A shares (without charge), which carry the lower 12b-1
fee. We will also convert any Class B shares that you purchased with reinvested
dividends and other distributions for those shares at that time. Remember,
because the NAV of Class A shares is usually higher than the NAV of Class B
shares, you may receive fewer Class A shares than the number of Class B shares
converted, but the total dollar value will be the same. We do the conversion on
the first business day of the month following the seventh anniversary of the
date of your purchase.

HOW TO PLACE YOUR PURCHASE ORDER

If you wish to purchase Class A, Class B, Class C or Class D shares, you may
purchase them using one of the methods described below. When you buy shares, be
sure to specify the class of shares. If you don't choose a class, your
investment will be made in Class A shares. Eligible entities wishing to purchase
Institutional Service Class shares should contact Customer Service at
1-800-848-0920 for more information regarding such purchases.

BY MAIL. Complete and mail the application with a check or money order made
payable to: Nationwide Mutual Funds, P.O. Box 1492, Columbus, Ohio 43216-1492.
Payment must be made in U.S. dollars only and drawn on a U.S. bank. The Funds
will not accept third-party checks.

BY WIRE. You can request that your bank transmit funds (federal funds) by wire
to the Fund's custodian bank. In order to use this method, you must call
Customer Service at 1-800-848-0920 by 4 p.m. Eastern Time, and the wire must be
received by the custodian bank by the close of business on the day you placed
your order or your order will be cancelled. You may be liable for any loss to a
Fund resulting from the cancellation. Please note that your bank may charge a
fee to wire funds. If you choose this method to open your account, you must call
our toll-free number before you wire your investment, and you must then complete
and fax the application.

BY TELEPHONE (NATIONWIDE FUNDS NOW). Call 1-800-637-0012, our automated
voice-response system, 24 hours a day, seven days a week, for easy access to
mutual fund information. You can choose from a menu of choices to conduct
transactions and hear fund price information, mailing and wiring instructions
and other mutual fund information. You must complete the appropriate section of
the application to use Nationwide Funds NOW to make purchases.

THROUGH AN AUTHORIZED BROKER. The Distributor has relationships with certain
brokers and other financial intermediaries who are authorized to accept, or
designate intermediaries to accept, purchase and redemption orders for the
Funds. If you purchase through such a broker, your order will be priced at the
NAV next determined after your broker or its designated intermediary accepts it.
Contact your broker to determine whether it has an established relationship with
the Distributor.

ON-LINE. Log on to our website www.nationwidefunds.com 24 hours a day, seven
days a week, for easy access to your mutual fund accounts. Once you have reached
the website, you will be instructed on how to select a password and perform
transactions. You can download a Fund prospectus or receive information on all
of our funds as well as your own personal accounts. You may also perform
transactions, such as purchases, redemptions and exchanges. The Funds may
terminate the ability to buy Fund shares on this website at any time, in which
case you may continue to buy shares by mail, wire, telephone or through an
authorized broker as described in this Prospectus.

ADDITIONAL SHAREHOLDER SERVICES

Shareholders are entitled to a wide variety of services by contacting:

NATIONWIDE FUNDS NOW 1-800-637-0012

Our customized voice-response system, available 24 hours a day, seven days a
week

30
<PAGE> 34

CUSTOMER SERVICE 1-800-848-0920

Representatives are available to answer questions between 8 a.m. and 5 p.m.
Eastern Time (Monday through Friday, except Thursday, when representatives are
available between 9:30 a.m. and 5 p.m. Eastern Time).

For additional information on buying shares and shareholder services, call
Customer Service or contact your sales representative.

SELLING SHARES

You can sell -- also known as redeeming -- your shares of the Funds at any time,
subject to certain restrictions described below. The price you will receive when
you sell your shares will be the NAV (less any applicable sales charges) next
determined after a Fund receives your
properly completed order to sell in their
offices in Columbus, Ohio. Of course, the
value of the shares you sell may be worth more or less than their original
purchase price depending upon the market value of a Fund's investments at the
time of the sale.

Generally, we will pay you for the shares that you sell within three days after
receiving your order to sell. Payment for shares you recently purchased by check
may be delayed until the check clears, which may take up to 10 business days
from the date of your purchase.

If you sell shares of any class in an amount exceeding $250,000 or 1% of the net
asset value of any Fund, under extraordinary circumstances that Fund may elect
to honor your request by transferring some of the securities held by the Fund
directly to you. For more information about a Fund's ability to make such a
redemption in kind, see the SAI.

RESTRICTIONS ON SALES

You may not be able to sell your shares of a Fund or a Fund may delay paying you
the proceeds from a sale when the New York Stock Exchange is closed (other than
customary weekend and holiday closings) or if trading is restricted or if an
emergency exists.

SIGNATURE GUARANTEE

A signature guarantee is required under the following circumstances:

- If a redemption is over $100,000.

- If your account registration has changed within the last 10 business days.

- If the redemption check is made payable to anyone other than the registered
shareholder.

- If the proceeds are sent to a bank account not previously designated or
changed within the past 10 business days.

- If the proceeds are mailed to an address other than the address of record.

The Funds reserve the right to require a signature guarantee in other
circumstances, without notice.

CONTINGENT DEFERRED SALES CHARGE (CDSC) ON CLASS A, CLASS B AND CLASS C SHARES

You must pay a CDSC if you sell Class B shares within six years of purchase,
unless you are entitled to a waiver. The sales charge applies if your sale
causes the value of Class B shares in your account to fall below the total
amount of all purchases of Class B shares you made during the preceding six
years. The sales charge is applied to your original purchase price, or the
current market value of the shares being sold, whichever is less. The amount of
the sales charge will decrease as illustrated in the following chart:

<TABLE>
<CAPTION>
1 2 3 4 5 6 7
Sale within year years years years years years years or more
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales charge 5% 4% 3% 3% 2% 1% 0%
</TABLE>

All purchases during the month are grouped together and will be treated as if
made on the last day of the preceding month.

Under certain circumstances, employer-sponsored retirement plans investing in
Class A shares without a sales charge and for which a finder's fee has been paid
(other than those investing in the Funds through variable insurance products)
may be charged a CDSC if shares are redeemed within three years after purchase.
The CDSC will be 1% for the first year, 0.50% for the second year and 0.25% for
the third year.

With respect to Class C shares, you must pay a CDSC of 1% if you sell your Class
C shares within the first year after you purchased them.

Properly completed orders contain all necessary
paperwork to authorize and complete the transaction.
the Funds may require all account holder signatures,
updated account registration and bank account
information and, depending on circumstances, a
signature guarantee.

31
<PAGE> 35

Buying, Selling and Exchanging Fund Shares

We do not impose a CDSC on Class A, Class B or Class C shares purchased through
reinvested dividends and distributions. If you sell your Class B or Class C
shares and reinvest the proceeds in Class B or Class C shares within 30 days,
the Funds will deposit an amount equal to any CDSC you paid into your account.
We will also waive the CDSC on Class B or Class C shares if you sell shares
following the death or disability of a shareholder, provided the sale occurs
within one year of the shareholder's death or a determination of disability, and
for mandatory withdrawals from IRA accounts after age 70 1/2 years. For more
information, see the SAI.

HOW TO PLACE YOUR SALE ORDER

You can request the sale of your Class A, Class B, Class C or Class D shares in
any of the following ways described below. A signature guarantee may be required
under certain circumstances. Please refer back to the section entitled
"Signature guarantee Class A, Class B and Class C shares" above. Eligible
entities wishing to sell Institutional Service Class shares should contact the
Distributor at 1-800-848-0920 for information regarding such sales.

BY TELEPHONE (NATIONWIDE FUNDS NOW). Calling 1-800-637-0012 connects you to our
automated voice-response system, available 24 hours a day, seven days a week,
for easy access to mutual fund information. You can sell shares and have the
check mailed to your address of record,
unless you declined this option on your
application. Only the following types of
accounts can use Nationwide Funds NOW to
sell shares: Individual, Joint, Transfer on Death, Trust, and Uniform
Gift/Transfer to Minor accounts. You can call 1-800-637-0012 after 7 p.m.
Eastern Time to learn the day's closing share price.

THROUGH OUR CUSTOMER SERVICE LINE. Unless you declined the telephone redemption
privileges on your application, you can call and request that a check payable to
the shareholder of record be mailed to the address of record. You can sell
shares of your IRA by telephone if we receive the proper forms. The distribution
from an IRA will be subject to a mandatory 10% federal withholding tax, unless
you inform us in writing not to withhold taxes. For additional information or to
request the forms, please call the Customer Service line at 1-800-848-0920. The
Funds will use procedures to confirm that telephone instructions are genuine. If
a Fund acts on instructions it reasonably believed were genuine, it will not be
liable for any loss, injury, damage or expense that occurs as a result, and the
Fund will be held harmless for any loss, claims or liability arising from its
compliance with the instructions. The Funds may record telephone instructions to
sell shares. The Funds reserve the right to revoke this privilege at any time,
without notice to shareholders, and to request the sale in writing, signed by
all shareholders on the account.

BY BANK WIRE. The Funds can wire the funds directly to your account at a
commercial bank (a voided check must be attached to your application), unless
you declined telephone privileges on your application. (This authorization will
remain in effect until you give the Funds written notice of its termination.)
Your proceeds will be wired to your bank on the next business day after your
order to sell shares has been processed. We will deduct a $20 fee from the
proceeds of your sale for this service. Your financial institution may also
charge you a fee for receiving the wire. Funds sent outside the U.S. may be
subject to a higher fee.

BY AUTOMATED CLEARING HOUSE (ACH). Your funds can be sent to your bank via ACH
on the second business day after your order to sell has been received by the
appropriate Fund. Funds sent through ACH should reach your bank in two business
days. There is no fee for this service. (This authorization will remain in
effect until you give the Fund written notice of its termination.)

BY MAIL OR FAX. Write a letter to Nationwide Mutual Funds, P.O. Box 1492,
Columbus, Ohio 43216-1492 or fax it to 614-428-3278. Please be sure your letter
is signed by all account owners. Be sure to include your account number and the
Fund from which you wish to make a redemption. For a distribution from an IRA,
you must include your date of birth and indicate whether or not you want the
Funds to withhold federal income tax from your proceeds. Your sale of shares
will be processed on the date the Funds receives your signed letter or fax. If
your fax is received after 4 p.m. Eastern Time, it will be processed the next
business day. The Funds reserve the right to require the original document if
you fax your letter.

THROUGH AN AUTHORIZED BROKER -- The Distributor has relationships with certain
brokers and other financial intermediaries

CAPITAL GAINS TAXES
If you sell Fund shares for more than you paid for
them, you may have capital gains, which are subject to
federal (and in some cases, state) income tax. For
more information, see "Distributions and
Taxes -- Selling Fund Shares" on page .

32
<PAGE> 36

who are authorized to accept, or designate intermediaries to accept, purchase
and redemption orders for the Funds. If you have an account with such a broker,
your redemption order will be priced at the NAV next determined after your order
has been accepted by your broker or its designated intermediary. Your broker or
financial intermediary may charge fee for this services.

ON-LINE. Log on to our website www.nationwidefunds.com 24 hours a day, seven
days a week, for easy access to your mutual fund accounts. Once you have reached
the website, you will be instructed on how to select a password and perform
transactions. You can receive information on all of our funds by downloading a
prospectus or using other methods as well as information concerning your own
personal accounts on-line. You may also perform transactions, such as purchases,
redemptions and exchanges. The Funds may terminate the ability to sell Fund
shares on this website at any time, in which case you may continue to sell
shares by mail, telephone or through an authorized broker as described in this
Prospectus.

ACCOUNTS WITH LOW BALANCES

We may sell the rest of your shares and close your account if you make a sale
that reduces the value of your account to less than $250. Before the account is
closed, we will give you notice and allow you 90 days to purchase additional
shares to avoid this action. We do this because of the high cost of maintaining
small accounts. This does not apply to Automatic Asset Accumulation accounts.

For additional information on selling your shares, call our Customer Service
line at 1-800-848-0920 or contact your sales representative.

DISTRIBUTION PLAN

In addition to the sales charges which you may pay for Class A, Class B and
Class C shares, the Trust has adopted a Distribution Plan under Rule 12b-1 of
the Investment Company Act of 1940, which permits the Class A, Class B and Class
C shares of the Funds to compensate the Distributor for expenses associated with
distributing such shares and providing shareholder services.

DISTRIBUTION AND SERVICE FEES

Under the Distribution Plan, Class A, Class B and Class C shares of the Funds
pay the Distributor compensation which is accrued daily and paid monthly. Each
Fund shall pay amounts not exceeding an annual amount of:

<TABLE>
<CAPTION>
FUND/CLASS AS A % OF DAILY NET ASSETS
----------------------------------------------------------------
<S> <C>
Class A shares 0.25% (distribution or service fee)
................................................................
Class B shares 1.00% (0.25% service fee)
................................................................
Class C shares 1.00% (0.25% service fee)
</TABLE>

Class D shares and Institutional Service Class shares pay no 12b-1 fees.

Because these fees are paid out of the Funds' assets on an ongoing basis, these
fees will increase the cost of your investment over time and may cost you more
than paying other types of sales charges.

33
<PAGE> 37

Buying, Selling and Exchanging Fund Shares

EXCHANGING SHARES

You can exchange the shares you own for shares of another Fund within Nationwide
Funds (except the Nationwide Morley Capital Accumulation Fund) so long as they
are the same class of shares, both
accounts have the same owner, and your
first purchase in the new fund meets the
fund's minimum investment requirement.
For example, you can exchange Class A
shares of any one of the Funds for Class
A shares of any other fund within the Nationwide Funds, but you cannot exchange
Class A shares for Class B, Class C or Class D shares.

Generally, there is no sales charge for exchanges of Class B, Class C, Class D
or Institutional Service Class shares. However, if your exchange involves
certain Class A shares, you may have to pay the difference between the sales
charges if a higher sales charge applies to the Fund into which you are
exchanging. If you exchange Prime Shares of the Money Market Fund into another
fund, you must pay the applicable sales charge, unless it has already been paid
prior to an exchange into the Money Market Fund. If you exchange Class B or
Class C shares for Prime Shares of the Money Market Fund, the time you hold the
shares in the Money Market Fund will not be counted for purposes of calculating
any CDSC. If you then sell your Prime Shares of the Money Market Fund, you will
pay the sales charge that would have been charged if the shares had been sold at
the time they were originally exchanged into the Money Market Fund. If you
exchange your Prime Shares of the Money Market Fund back into Class B or Class C
shares, the time you held the Class B or Class C shares prior to the exchange
will be counted for purposes of calculating the CDSC.

HOW TO PLACE YOUR EXCHANGE ORDER

You can request an exchange of shares in writing, by fax, by phone, or by
on-line access (see "Buying Shares -- How to place your purchase order" on page
or the back cover for contact information). If you make your request in
writing, please be sure all account holders sign the letter. Your exchange will
be processed on the date the Fund receives your signed letter or fax. If your
fax is received after 4 p.m. Eastern Time, it will be processed the next day. If
you fax your request, we reserve the right to ask for the original. You can
automatically request an exchange 24 hours a day, seven days a week, by calling
Nationwide Funds NOW, our automated voice-response system, or by logging on to
our website at www.nationwidefunds.com. You will have automatic exchange
privileges unless you request not to on your application. The Trust reserves the
right to amend or discontinue these exchange privileges upon 60 days' written
notice to shareholders.

EXCESSIVE EXCHANGE ACTIVITY

The Trust reserves the right to reject any exchange request it believes will
increase transaction costs, or otherwise adversely affect other shareholders.
Specifically, exchange activity may be limited to 12 exchanges within a one year
period or 1% of a Fund's NAV. A Fund may delay forwarding redemption proceeds
for up to seven days if the investor redeeming shares is engaged in excessive
trading, or if the amount of the redemption request otherwise would be
disruptive to efficient portfolio management, or would adversely affect the
Fund.

CAPITAL GAINS TAXES
Exchanging shares is considered a sale and purchase of
shares for federal and state income tax purposes.
Therefore, if the shares you exchange are worth more
than you paid for them, you may have to pay federal
and/or state income taxes. For more information, see
"Distribution and Taxes -- Exchanging Fund Shares" on
page .

34
<PAGE> 38

DISTRIBUTIONS AND TAXES

The following information is provided to help you understand the income and
capital gains you can earn when owning Fund shares, as well as the federal taxes
you may have to pay on this income. For tax advice regarding your personal tax
situation, please speak with your tax adviser.

DISTRIBUTIONS OF INCOME DIVIDENDS

Every quarter, the Funds distribute any available income dividends to
shareholders. Income dividends are taxable to you as ordinary income for federal
income tax purposes, unless you hold your shares in a qualified tax-deferred
plan or account, or are otherwise not subject to federal income tax. The amount
of income dividends distributed to you will be reported in a Form 1099, which we
will send to you during the tax season each year (unless you hold your shares in
a qualified tax-deferred plan or account or are otherwise not subject to federal
income tax). For corporate shareholders, a portion of each year's distributions
may be eligible for the corporate dividend-received deduction.

DISTRIBUTIONS OF CAPITAL GAINS

If a Fund has net realized capital gains at the end of the calendar year
(meaning the gains from sales of securities exceed any losses from sales), it
will distribute this capital gain to shareholders annually. You must pay federal
income taxes on any capital gains distributed to you, unless you hold your
shares in a qualified tax-deferred plan or account or are otherwise not subject
to federal income tax. On Form 1099, we will report the amount of net short-term
capital gains and net long-term capital gains distributed to you during the
year. Currently, for individuals, long-term capital gains are taxed at a maximum
rate of 20%; short-term capital gains are taxed as ordinary income, such as
interest or dividends. For more information regarding capital gains tax rates,
speak with your tax adviser.

REINVESTING DISTRIBUTIONS

All income and capital gains distributions will be reinvested in shares of the
applicable Fund. You may request a payment in cash in writing if distributions
are in excess of $5. You may be subject to tax on reinvested distributions. If
distribution checks (1) are returned and marked as "undeliverable" or (2) remain
uncashed for six months, your account will be changed automatically so that all
future distributions are reinvested in your account. Checks that remain uncashed
for six months will be cancelled and the money reinvested in a Fund as of the
cancellation date. No interest is paid during the time the check is outstanding.

CHANGING YOUR DISTRIBUTION OPTION
If you want to change your distribution option, you
must notify us by the record date for a dividend or
distribution in order for it to be effective for
that dividend or distribution.

You may be subject to federal backup withholding at a rate of 31% of each
distribution unless you certify that the taxpayer identification number you gave
us is correct, and that you are not subject to withholding. (We will, however,
withhold taxes if the Internal Revenue Service notifies us that such
certifications are not accurate, or as may otherwise be required under the
Internal Revenue Code.)

STATE AND LOCAL TAXES

Distributions may be subject to state and local taxes, even if not subject to
federal income taxes. State and local tax laws vary; please consult your tax
adviser.

SELLING FUND SHARES

Selling Fund shares for more than you paid for them gives you a capital gain,
which is subject to federal income tax. The amount of the tax depends on how
long you held your shares. For individuals, long-term capital gains are
currently taxed at a maximum rate of 20%; and short-term capital gains are taxed
as ordinary income, such as interest or dividends. Capital gains from your sale
of Fund shares is not reported on Form 1099; you or your tax adviser should keep
track of your purchases, sales, and any resulting gain or loss.
If you do sell Fund shares for a loss, you may be able to use this capital loss
to offset any capital gains you may have.

EXCHANGING FUND SHARES

Exchanging your shares of a Fund for another fund within the Nationwide Funds
family is considered a sale for income tax purposes. Therefore, if the shares
you exchange are worth more than you paid for them, you may have capital gains,
which are subject to the federal income taxes described above. If you exchange
Fund shares for a loss, you may be able to use this capital loss to offset any
capital gains you may have.

35
<PAGE> 39

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand the Funds'
financial performance for the past 5 years or, if the Fund has not been in
operation for the past five years, the life of the Fund. Certain information
reflects financial results for a single Fund share. The total returns in the
tables represent the rate that an investor would have earned [or lost] on an
investment in the Fund (assuming reinvestment of all dividends and distributions
and no sales charges). This information has been audited by KPMG LLP, whose
report, along with the Funds' financial statements, are included in the Trust's
annual reports, which are available upon request. For the Gartmore Growth,
Gartmore Nationwide and Gartmore Millennium Growth Fund, for 1996, 1997 and 1998
information is for one Class D share outstanding through the periods ended
October 31, which includes information for the Funds and their respective
predecessors (prior to May 11, 1998, shares of these Funds' predecessors were
without class designation). The tables also include information for the Class A
and Class B shares for the period from May 11, 1998 to October 31, 1998 and for
the years ended October 31, 1999 and October 31, 2000. Class C shares had not
been offered to the public as of October 31, 2000. The respective information
for the Gartmore Value Opportunities Fund and the Gartmore Large Cap Value Fund
reflects the performance for the life of such Funds.

<TABLE>
<CAPTION>
GARTMORE GROWTH FUND
---------------------------------------------------
YEAR ENDED
OCTOBER 31, PERIOD ENDED OCTOBER 31, 1998
---------------- -----------------------------
1996 1997 CLASS D CLASS A CLASS B
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $18.17 $19.47 $22.87 $ 19.67 $ 19.67
Income from investment operations
Net investment income (loss) 0.01 0.04 (0.06) (0.03) (0.07)
Net realized gain (loss) and unrealized
appreciation (depreciation) 3.28 4.38 1.29 (1.97) (2.06)
------ ------ ------ ------- -------
Total from investment operations 3.29 4.42 1.23 (2.00) (2.13)
------ ------ ------ ------- -------
Less distributions
Dividends from net investment income -- (0.03) -- -- --
Distributions from net realized gain from
investment transactions (1.99) (0.99) (6.49) -- --
------ ------ ------ ------- -------
Total distributions (1.99) (1.02) (6.49) -- --
Net increase (decrease) in net asset value 1.30 3.40 (5.26) (2.00) (2.13)

NET ASSET VALUE -- END OF PERIOD $19.47 $22.87 $17.61 $ 17.67 $ 17.54
====== ====== ====== ======= =======
Total return (without sales charges) 19.41% 23.66% 5.11% (10.17)% (10.83)%
Ratios and supplemental data
Net assets at end of period (000's) $9,095 $9,541 $9,022 $ 305 $ 251
Expenses to average net assets 1.44% 0.96% 0.93% 1.23%(a) 2.00%(a)
Expenses to average net assets* 1.69% 1.70% 1.57% 2.21%(a) 2.98%(a)
Net investment income (loss) to average net
assets 0.03% 0.20% (0.30)% (0.70)%(a) (1.47)%(a)
Net investment income (loss) to average net
assets* (0.22)% (0.54)% (0.94)% (1.68)%(a) (2.45)%(a)
Portfolio turnover(b) 17.19% 40.69% 46.33% 46.33% 46.33%
</TABLE>

---------------

*Includes $(0.01) dividend in excess of net investment income.

(a) Annualized.

(b)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

36
<PAGE> 40

<TABLE>
<CAPTION>
GARTMORE GROWTH FUND
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 2000
-------------------------------- --------------------------------
CLASS D CLASS A CLASS B CLASS D CLASS A CLASS B
---------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $ 16.02 $16.02 $15.98
Income from investment operations
Net investment income (loss) 0.03 0.01 (0.06)
Net realized gain (loss) and
unrealized appreciation
(depreciation) 2.65 2.64 2.59
---------- ------ ------ ---------- ------ ------
Total from investment operations 2.68 2.65 2.53
---------- ------ ------ ---------- ------ ------
Less distributions
Dividends from net investment income (0.03) (0.01) --
Distributions from net realized gain
from investment transactions (0.31) (0.31) (0.31)
---------- ------ ------ ---------- ------ ------
Total distributions (0.34) (0.32) (0.31)
Net increase (decrease) in net asset
value 2.34 2.33 2.22

NET ASSET VALUE -- END OF PERIOD $ 18.36 $18.35 $18.20
========== ====== ====== ========== ====== ======
Total return (without sales charges) 17.07% 16.85% 16.12%
Ratios and supplemental data
Net assets at end of period (000's) $1,014,687 $7,654 $6,210
Expenses to average net assets 0.80% 1.04% 1.79%
Net investment income (loss) to
average net assets 0.19% (0.02)% (0.76)%
Portfolio turnover(b) 35.18% 35.18% 35.18%
</TABLE>

---------------

*Includes $(0.01) dividend in excess of net investment income.

(a) Annualized.

(b)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

37
<PAGE> 41

Financial Highlights

<TABLE>
<CAPTION>
GARTMORE NATIONWIDE FUND
----------------------------------------------------------------
YEAR ENDED
OCTOBER 31, PERIOD ENDED OCTOBER 31, 1998
---------------------- ------------------------------------
1996 1997 CLASS D CLASS A CLASS B
-------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $ 17.35 $ 20.41 $ 26.57 $ 29.94 $ 29.94
Income from investment operations
Net investment income (loss) 0.36 0.31 0.30 0.06 --
Net realized gain and unrealized
appreciation 3.98 7.44 6.23 0.38 0.27
-------- ---------- ---------- ------- -------
Total from investment operations 4.34 7.75 6.53 0.44 0.27
-------- ---------- ---------- ------- -------
Less distributions
Dividends from net investment income (0.35) (0.31) (0.30) (0.08) (0.03)
Distributions from net realized gain
from investment transactions (0.93) (1.28) (2.54) -- --
-------- ---------- ---------- ------- -------
Total distributions (1.28) (1.59) (2.84) (0.08) (0.03)
Net increase (decrease) in net asset
value 3.06 6.16 3.69 0.35 0.24

NET ASSET VALUE -- END OF PERIOD $ 20.41 $ 26.57 $ 30.26 $ 30.30 $ 30.18
======== ========== ========== ======= =======
Total return (without sales charges) 26.11% 40.17% 25.73% 1.48% 0.90%
Ratios and supplemental data
Net assets at end of period (000's) $958,590 $1,448,422 $2,172,101 $19,746 $13,493
Expenses to average net assets 0.61% 0.60% 0.66% 1.00%(a) 1.75%(a)
Net investment income (loss) to
average net assets 1.89% 1.32% 1.00% 0.54%(a) (0.20)%(a)
Portfolio turnover(b) 16.71% 14.94% 13.47% 13.47% 13.47%
</TABLE>

---------------

(a)Annualized.

(b)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

38
<PAGE> 42

<TABLE>
<CAPTION>
GARTMORE NATIONWIDE FUND
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 2000
-------------------------------- --------------------------------
CLASS D CLASS A CLASS B CLASS D CLASS A CLASS B
---------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ 30.26 $ 30.30 $ 30.18
Income from investment operations
Net investment income (loss) 0.25 0.17 (0.03)
Net realized gain and unrealized
appreciation 2.82 2.84 2.79
---------- ------- ------- ---------- ------- -------
Total from investment
operations 3.07 3.01 2.76
---------- ------- ------- ---------- ------- -------
Less distributions
Dividends from net investment
income (0.24) (0.11) --
Distributions from net realized
gain from investment
transactions (0.49) (0.49) (0.49)
---------- ------- ------- ---------- ------- -------
Total distributions (0.73) (0.60) (0.49)
Net increase (decrease) in net
asset value 2.34 2.41 2.27

NET ASSET VALUE -- END OF PERIOD $ 32.60 $ 32.71 $ 32.45
========== ======= ======= ========== ======= =======
Total return (without sales
charges) 10.27% 10.05% 9.22%
Ratios and supplemental data
Net assets at end of period
(000's) $2,443,493 $54,223 $44,994
Expenses to average net assets 0.73% 0.96% 1.72%
Net investment income (loss) to
average net assets 0.78% 0.53% (0.21)%
Portfolio turnover(b) 13.88% 13.88% 13.88%
</TABLE>

---------------

(a)Annualized.

(b)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

39
<PAGE> 43

Financial Highlights

<TABLE>
<CAPTION>
GARTMORE MILLENNIUM GROWTH FUND
---------------------------------------------------
YEAR ENDED
OCTOBER 31, PERIOD ENDED OCTOBER 31, 1998
---------------- -----------------------------
1996 1997 CLASS D CLASS A CLASS B
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $18.17 $19.47 $22.87 $ 19.67 $ 19.67
Income from investment operations
Net investment income (loss) 0.01 0.04 (0.06) (0.03) (0.07)
Net realized gain (loss) and unrealized
appreciation (depreciation) 3.28 4.38 1.29 (1.97) (2.06)
------ ------ ------ ------- -------
Total from investment operations 3.29 4.42 1.23 (2.00) (2.13)
------ ------ ------ ------- -------
Less distributions
Dividends from net investment income -- (0.03) -- -- --
Distributions from net realized gain from
investment transactions (1.99) (0.99) (6.49) -- --
------ ------ ------ ------- -------
Total distributions (1.99) (1.02) (6.49) -- --
Net increase (decrease) in net asset value 1.30 3.40 (5.26) (2.00) (2.13)

NET ASSET VALUE -- END OF PERIOD $19.47 $22.87 $17.61 $ 17.67 $ 17.54
====== ====== ====== ======= =======
Total return (without sales charges) 19.41% 23.66% 5.11% (10.17)% (10.83)%
Ratios and supplemental data
Net assets at end of period (000's) $9,095 $9,541 $9,022 $ 305 $ 251
Expenses to average net assets 1.44% 0.96% 0.93% 1.23%(a) 2.00%(a)
Expenses to average net assets* 1.69% 1.70% 1.57% 2.21%(a) 2.98%(a)
Net investment income (loss) to average net assets 0.03% 0.20% (0.30)% (0.70)%(a) (1.47)%(a)
Net investment income (loss) to average net
assets* (0.22)% (0.54)% (0.94)% (1.68)%(a) (2.45)%(a)
Portfolio turnover(b) 17.19% 40.69% 46.33% 46.33% 46.33%
</TABLE>

---------------

*Ratios calculated as if no expenses were waived or reimbursed.

(a)Annualized.

(b)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

40
<PAGE> 44

<TABLE>
<CAPTION>
GARTMORE MILLENNIUM GROWTH FUND
----------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 2000
----------------------------- -----------------------------
CLASS D CLASS A CLASS B CLASS D CLASS A CLASS B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $17.61 $ 17.67 $ 17.54
Income from investment operations
Net investment income (loss) (0.02) (0.03) (0.12)
Net realized gain (loss) and unrealized
appreciation (depreciation) 2.34 2.30 2.26
------ ------- ------- ------ ------ ------
Total from investment operations 2.32 2.27 2.14
------ ------- ------- ------ ------ ------
Less distributions
Dividends from net investment income -- -- --
Distributions from net realized gain from
investment transactions (0.24) (0.24) (0.24)
------ ------- ------- ------ ------ ------
Total distributions (0.24) (0.24) (0.24)
Net increase (decrease) in net asset value 2.08 2.03 1.90

NET ASSET VALUE -- END OF PERIOD $19.69 $ 19.70 $ 19.44
====== ======= ======= ====== ====== ======
Total return (without sales charges) 13.31% 12.98% 12.33%
Ratios and supplemental data
Net assets at end of period (000's) $9,865 $ 1,244 $ 918
Expenses to average net assets 1.00% 1.25% 2.00%
Expenses to average net assets* 1.53% 1.83% 2.59%
Net investment income (loss) to average
net assets (0.09)% (0.24)% (1.01)%
Net investment income (loss) to average
net assets* (0.62)% (0.82)% (1.60)%
Portfolio turnover(b) 36.58% 36.58% 36.58%
</TABLE>

---------------

*Ratios calculated as if no expenses were waived or reimbursed.

(a)Annualized.

(b)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

41
<PAGE> 45

Financial Highlights

<TABLE>
<CAPTION>
GARTMORE GROWTH 20 FUND
---------------------------------------------------------
PERIOD ENDED OCTOBER 31, 2000(A)
---------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS A SHARES CLASS B SHARES CLASS SHARES
-------------- -------------- ---------------------
<S> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD
Net investment income (loss)
Net realized gain (loss) and unrealized appreciation
(depreciation)
------- ------- -------
Total from investment operations
------- ------- -------
Dividends from net investment income
Total distributions
------- ------- -------
Net increase in net asset value
------- ------- -------
NET ASSET VALUE -- END OF PERIOD
======= ======= =======
Total Return (excluding sales charges)
Ratios and supplemental data:
Net Assets, end of period (000's)
Ratio of expenses to average net assets(b)
Ratio of expenses to average net assets(b)
Ratio of net investment income to average net assets(b)
Ratio of net investment income to average net assets(b)
Portfolio turnover(c)
</TABLE>

---------------

(a)Ratios calculated as if no fees were waived or expenses reimbursed.

(b)The Gartmore Growth 20 Fund commenced operations on June 30, 2000.

(c)Annualized.

(d)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

42
<PAGE> 46

<TABLE>
<CAPTION>
GARTMORE VALUE OPPORTUNITIES FUND
---------------------------------------------------------
PERIOD ENDED OCTOBER 31, 2000(a)
---------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS A SHARES CLASS B SHARES CLASS SHARES
-------------- -------------- ---------------------
<S> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD
Net investment income (loss)
Net realized gain (loss) and unrealized appreciation
(depreciation)
------- ------- -------
Total from investment operations
------- ------- -------
Dividends from net investment income
Total distributions
------- ------- -------
Net increase in net asset value
------- ------- -------
NET ASSET VALUE -- END OF PERIOD
======= ======= =======
Total Return (excluding sales charges)
Ratios and supplemental data:
Net Assets, end of period (000's)
Ratio of expenses to average net assets(b)
Ratio of expenses to average net assets(b)
Ratio of net investment income to average net assets(b)
Ratio of net investment income to average net assets(b)
Portfolio turnover(c)
</TABLE>

---------------

(a)Ratios calculated as if no fees were waived or expenses reimbursed.

(b)The Gartmore Value Opportunities Fund commenced operations on December 30,
1999.

(c)Annualized.

(d)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

43
<PAGE> 47

Financial Highlights

<TABLE>
<CAPTION>
NATIONWIDE LARGE CAP VALUE FUND FORMERLY PRESTIGE LARGE CAP VALUE FUND
-----------------------------------------------------------------------------------------
PERIOD ENDED OCTOBER 31, 2000(a) PERIOD ENDED OCTOBER 31, 1999(a)
------------------------------------------------------- -------------------------------
INSTITUTIONAL SERVICE
CLASS A SHARES CLASS B SHARES CLASS SHARES CLASS A SHARES CLASS B SHARES
-------------- -------------- --------------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $ 10.00 $ 10.00
Net investment income (loss) 0.07 (0.02)
Net realized gain (loss) and
unrealized appreciation
(depreciation) 0.32 0.27
------- ------- ------- ------- -------
Total from investment operations 0.39 0.25
------- ------- ------- ------- -------
Dividends from net investment income (0.07) (0.01)
Total distributions (0.07) (0.01)
------- ------- ------- ------- -------
Net increase in net asset value 0.32 0.24
------- ------- ------- ------- -------
NET ASSET VALUE -- END OF PERIOD $ 10.32 $ 10.24
======= ======= ======= ======= =======
Total Return (excluding sales charges) 3.86% 2.50%
Ratios and supplemental data:
Net Assets, end of period (000's) $25,883 $ 155
Ratio of expenses to average net
assets(b) 1.15% 1.90%
Ratio of expenses to average net
assets(b) 1.87% 5.34%
Ratio of net investment income to
average net assets(b) 0.85% (0.13)%
Ratio of net investment income to
average net assets(b) 0.13% (3.57)%
Portfolio turnover(c) 120.94% 120.94%

<CAPTION>
NATIONWIDE LARGE CAP VALUE FUND FORMERLY PRESTIGE LARGE CAP VALUE FUND C
---------------------
PERIOD ENDED OCTOBER 31, 1999(a)
---------------------
INSTITUTIONAL SERVICE
CLASS SHARES
---------------------
<S> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $ 10.00
Net investment income (loss) 0.08
Net realized gain (loss) and
unrealized appreciation
(depreciation) 0.33
-------
Total from investment operations 0.41
-------
Dividends from net investment income (0.06)
Total distributions (0.06)
-------
Net increase in net asset value 0.35
-------
NET ASSET VALUE -- END OF PERIOD $ 10.35
=======
Total Return (excluding sales charges) 4.05%
Ratios and supplemental data:
Net Assets, end of period (000's) $ 755
Ratio of expenses to average net
assets(b) 1.00%
Ratio of expenses to average net
assets(b) 4.21%
Ratio of net investment income to
average net assets(b) 0.77%
Ratio of net investment income to
average net assets(b) (2.44)%
Portfolio turnover(c) 120.94%
</TABLE>

---------------

(a)Ratios calculated as if no fees were waived or expenses reimbursed.

(b)The Nationwide Large Cap Value Fund commenced operations on November 28,
1998.

(c)Annualized.

(d)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

44
<PAGE> 48

INFORMATION FROM NATIONWIDE

Please read this Prospectus before you invest, and keep it with your records.
The following documents contain additional information about the Funds. To
obtain a document free of charge, contact us at the address or number listed
below.

- Statement of Additional Information (incorporated by reference in this
Prospectus)

- Annual Reports (which contain a discussion of the market conditions and
investment strategies that significantly affected each Funds' performance) (as
available)

- Semi-Annual Reports (as available)

FOR ADDITIONAL INFORMATION CONTACT:

Nationwide Family of Funds

P.O. Box 1492
Columbus, Ohio 43216-1492

(614) 428-3278 (fax)

Nationwide Logo

FOR INFORMATION, ASSISTANCE AND WIRE ORDERS:

1-800-848-0920 (toll free, 8 a.m.- 5 p.m. Eastern Time (Monday through Friday,
except Thursday, when
representatives are available between 9:30 a.m. and 5 p.m. Eastern Time.))

FOR 24-HOUR ACCOUNT ACCESS:

1-800-637-0012 (toll free)
Also, visit the Nationwide Family of Funds' website at
www.nationwidefunds.com.

INFORMATION FROM THE SECURITIES AND EXCHANGE COMMISSION (SEC)

You can obtain copies of Fund documents from the SEC
as follows:

IN PERSON:

Public Reference Room in Washington, D.C. (For their hours
of operation, call 1-202-942-8090.)

BY MAIL:

Securities and Exchange Commission
Public Reference Section
Washington, D.C. 20549-0102
(The SEC charges a fee to copy any documents.)

ON THE EDGAR DATABASE VIA THE INTERNET:

www.sec.gov

BY ELECTRONIC REQUEST:

[email protected]

INVESTMENT COMPANY ACT FILE NO. 811-08495

NATIONWIDE FAMILY OF FUNDS
P.O. BOX 1492
COLUMBUS, OHIO 43215-1492

PRSRT STD
US POSTAGE
PAID
CLEVELAND OH
PERMIT NO 2112

HS-409-N
<PAGE> 49

NATIONWIDE(R) FAMILY OF FUNDS

Prospectus

March 1, 2001

- Nationwide High Yield Bond Fund

- Nationwide Bond Fund

- Nationwide Tax-Free Income Fund

-Nationwide Government Bond Fund
(formerly "Nationwide Intermediate
U.S. Government Bond Fund")

-Nationwide Morley Enhanced Income Fund
(formerly "Morley Enhanced Income Fund")

- Nationwide Money Market Fund

<PAGE> 50

TABLE OF CONTENTS

FUND SUMMARIES............................................................... 2

FUND SUMMARIES -- THE BOND FUNDS............................................. 3

Nationwide High Yield Bond Fund.............................................. 3

Nationwide Bond Fund......................................................... 7

Nationwide Tax-Free Income Fund.............................................. 10

Nationwide Government Bond Fund.............................................. 12

Nationwide Morley Enhanced Income Fund....................................... 16

FUND SUMMARY -- THE MONEY MARKET FUND........................................ 19

Nationwide Money Market Fund................................................. 19

MORE ABOUT THE BOND FUNDS.................................................... 21

Principal Investments and Techniques and Risks............................... 21

Principal Risks.............................................................. 24

MORE ABOUT THE MONEY MARKET FUND............................................. 25

Principal Investment Risks................................................... 25

Non-Principal Risk........................................................... 25

MANAGEMENT................................................................... 26

Investment Advisers.......................................................... 26

Portfolio Managers........................................................... 26

BUYING, SELLING AND EXCHANGING FUND SHARES................................... 28

Choosing a Share Class....................................................... 28

Buying Shares................................................................ 30

Selling Shares............................................................... 33

Distribution Plan............................................................ 36

Exchanging Shares............................................................ 36

DISTRIBUTIONS AND TAXES...................................................... 38

Distributions of Income Dividends............................................ 38

Distributions of Capital Gains............................................... 38

Reinvesting Distributions.................................................... 38

State and Local Taxes........................................................ 38

Selling Fund Shares.......................................................... 38

Exchanging Fund Shares....................................................... 38

FINANCIAL HIGHLIGHTS......................................................... 39

ADDITIONAL INFORMATION............................................... BACK COVER

1
<PAGE> 51

FUND SUMMARIES

This prospectus provides information about six of the Nationwide(R) Mutual
Funds, which include five bond funds, and a money market fund (together, the
Funds). The "Bond Funds" means all of the bond funds offered in this prospectus,
and the "Money Market Fund" means the Nationwide Money Market Fund. The
following sections summarize key information about the Funds, including
information regarding the investment objectives, principal strategies, principal
risks, performance and fees for all the Funds. Each Fund's investment objective
can be changed without shareholder approval. Use the summaries to compare the
Funds with other mutual funds. More detailed information about the risks and
investment techniques of the Funds can be found in "More About the Bond Funds"
beginning on page or "More about the Money Market Fund" beginning on
page . "You" and "your" refer to potential investors and current
shareholders of the Fund.

A QUICK NOTE ABOUT SHARE CLASSES

Each of the Funds has the following share classes:

Nationwide High Yield Bond Fund

- Class A
- Class B
- Class C
- Institutional Service Class

Nationwide Bond Fund

- Class A

- Class B
- Class C
- Class D

Nationwide Tax-Free Income Fund

- Class A
- Class B
- Class C
- Class D

Nationwide Government Bond Fund

(formerly the "Nationwide Intermediate U.S. Government Bond Fund")

- Class A
- Class B
- Class C
- Class D

Nationwide Morley Enhanced Income Fund

(formerly the "Morley Enhanced Income Fund")

- Class A
- Institutional Service Class

- Institutional Class shares

Nationwide Money Market Fund

- Prime Shares

- Service Class shares

2
<PAGE> 52

FUND SUMMARIES -- THE BOND FUNDS NATIONWIDE HIGH YIELD BOND
FUND

OBJECTIVES AND PRINCIPAL STRATEGIES
The Fund seeks high current income with capital appreciation as a secondary
objective.

To achieve its objective, the Fund invests primarily in U.S. dollar-denominated
high yield bonds of domestic and foreign issuers (junk bonds). Under normal
market conditions, the Fund will invest at least 65% of its total assets in U.S.
dollar-denominated domestic and foreign bonds that are considered below
investment grade. Such bonds are commonly known as junk bonds. A company is
considered to be domestic if it is organized under the laws of the U.S. and has
a principal place of business in the U.S., or derives 50% or more of its cash
flow from business in the U.S. These bonds may be of any credit quality and may
include securities which currently are not paying interest, pay-in-kind
securities, zero coupon bonds and securities that are in default.

Bonds with ratings below Baa (Moody's) or BBB
(Standard & Poor's) are considered below investment
grade and are commonly referred to as junk bonds.
These bonds generally offer higher interest rates
because the issuer is at greater risk of default
(failure to repay the bond).

The Fund's portfolio manager generally uses a "top-down" and "bottom up"
approach when selecting securities. The "top-down" approach focuses on theme and
sector development and broad
diversification among countries, sectors
and industries, while the "bottom up"
approach focuses on individual issues
through the application of credit
analysis. The portfolio manager uses an
active process that emphasizes relative
value in a global environment, managing
on a total return basis, and using
intensive research to identify stable to
improving credit situations that may
provide yield compensation for the risk
of investing in junk bonds.

"TOP-DOWN" APPROACH

- ECONOMIC ANALYSIS. The portfolio manager takes a
view of the economy in order to develop an overall
theme of the Fund and selects sectors that fit
within the theme.

"BOTTOM UP" APPROACH

- CREDIT RESEARCH. The portfolio manager uses
independent credit research and on-site management
visits to evaluate debt service, growth rate, and
both downside and upgrade potential for each
individual issue.

- STRONG LONG-TERM FUNDAMENTALS. Under the "bottom up"
approach, the portfolio manager assesses new issues'
secondary market opportunities through a relative
value analysis.

By using these approaches, the Fund assesses new issues versus secondary market
opportunities. The Fund intends to maintain a dollar-weighted effective average
portfolio maturity of five to ten years. The Fund's average portfolio maturity
may be shortened by securities that have floating or variable interest rates or
that include put features which provide the Fund with the right to sell the
security at face value prior to maturity. The Fund will sell securities which no
longer fit within the above parameters.

In order to maintain liquidity, or in the event that the portfolio manager
determines there are no securities currently available in the market that meet
the Fund's investment objectives, the Fund may invest up to 35% of its total
assets in cash or money market instruments.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decrease. The value of your shares will also be
impacted by the portfolio manager's ability to assess economic conditions and
investment opportunities.

CREDIT RISK. Credit risk is the risk that the issuer of a debt security will be
unable to make the required payments of interest and/or repay the principal when
due. In addition, there is a risk that the rating of a debt security may be
lowered if an issuer's financial condition changes, which may lead to a greater
price fluctuation in the securities the Fund owns. These risks are particularly
strong for junk bonds and other lower-rated securities.

LOWER-RATED SECURITIES RISK. Investment in junk bonds and other lower-rated or
high yield securities involves substantial risk of loss. These securities are
considered speculative with

3
<PAGE> 53

Fund Summaries -- Nationwide High Yield Bond Fund

respect to the issuer's ability to pay interest and principal when due and are
susceptible to default or decline in market value due to adverse economic and
business developments. The market values of high yield securities tend to be
very volatile, and these securities are less liquid than investment grade debt
securities. For these reasons an investment in the Fund is subject to the
following specific risks:

- Increased price sensitivity to changing interest rates and to adverse economic
and business developments

- Greater risk of loss due to default or declining credit quality

- Greater likelihood that adverse economic or company specific events will make
the issuer unable to make interest and/or principal payments when due

- Negative market sentiments toward high yield securities may depress their
price and liquidity. If this occurs, it may become difficult to price or
dispose of a particular security in the Fund.

MATURITY RISK. The price of fixed income securities with longer effective
maturities are more sensitive to interest rate changes than those with shorter
effective maturities.

FOREIGN RISK. Investments in foreign securities involve risks in addition to
those of U.S. investments. These risks include political and economic risks,
currency fluctuations, higher transaction costs, and delayed settlement. To the
extent that the Fund invests in countries with emerging markets, the foreign
securities risks are magnified since these countries may have unstable
governments and less established markets.

LIQUIDITY RISK. Liquidity risk is the risk that a security cannot be sold, or
cannot be sold quickly, at an acceptable price.

CALL RISK. Call risk is the possibility that an issuer may redeem a debt
security before maturity (call). An increase in the likelihood of a call may
reduce the security's price. If a debt security is called, the Fund may have to
reinvest the proceeds in other debt securities with lower interest rates, higher
credit risks, or other less favorable characteristics.

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counter
parties to over-the-counter derivatives contracts present default risks if such
counterparties fail to fulfill their obligations. Derivatives can make the Fund
less liquid and harder to value, especially in declining markets. Also, the Fund
may suffer disproportionately heavy losses relative to the amount of its
investments in derivative contracts. Lastly, changes in the value of derivative
contracts or other hedging instruments may not match or fully offset changes on
the value of the hedged portfolio securities.

For more detailed information about the Fund's investments and risks, see "More
About the Bond Funds" beginning on page .

PERFORMANCE

The following bar chart and table present the performance of the Fund. The bar
chart shows the Fund's annual total return. The table shows the Fund's average
annual total returns for that time period compared to the returns of a
broad-based securities index. The bar chart and table provide some indication of
the risks of investing in the Fund. Remember, however, that past performance
does not guarantee similar results in the future.

ANNUAL RETURNS -- INSTITUTIONAL SERVICE CLASS SHARES(1)

Best Quarter: % nd qtr. of 2000

Worst Quarter: % st qtr. of 2000

---------------

(1)These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown. Please call
1-800-637-0012 to obtain the Fund's current 30-day yield.

4
<PAGE> 54

<TABLE>
<CAPTION>
Since
Average annual returns(1) -- as of 12/31/00 1 year Inception(2)
----------------------------------------------------------------------
<S> <C> <C>
Class A shares % %
......................................................................
Class B shares % %
......................................................................
Class C shares(3) % %
......................................................................
Institutional Service Class shares % %
......................................................................
CS First Boston Global High Yield Corporate
Bond Index % %
</TABLE>

---------------

(1)These returns reflect performance after sales charges, if any, and expenses
are deducted.

(2)The Fund began operations on December 30, 1999.

(3)These returns include performance of the Fund which was achieved prior to the
creation of the Class (March 1, 2001), which is the same as the performance
shown for the Class B shares through December 31, 2000. The returns have been
restated for sales charges but not for fees applicable to Class C shares. Had
Class C shares been in existence for the time periods presented, the
performance of Class C would have been similar as a result of similar
expenses.

(4)The CS First Boston Global High Yield Corporate Bond Index is an unmanaged
index which gives a broad look at public high yield debt. The returns do not
include the effect of any sales charges or expenses. If sales charges and
expenses were deducted, the actual returns of the Index would be lower.

FEES AND EXPENSES

This table describes fees and expenses that you may pay when buying and holding
shares of the Fund.

<TABLE>
<CAPTION>
Institutional
Shareholder Fees(1) Service
(paid directly from your Class A Class B Class C Class
investment) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge 4.50%(2) None 1.00% None
(Load) imposed on
purchases (as a
percentage of offering
price)
.....................................................................
Maximum Deferred Sales None(3) 5.00%(4) 1.00% (5) None
Charge (Load) imposed on
redemptions (as a
percentage of original
purchase price or sale
proceeds, as applicable)
</TABLE>

<TABLE>
<CAPTION>
Institutional
Service
Annual Fund Operating Expenses Class A Class B Class C Class
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.55% 0.55% 0.55% 0.55%
...........................................................................
Distribution and/or Service 0.25% 1.00% 1.00% None
(12b-1) Fees
...........................................................................
Other Expenses % % % %
---------------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
...........................................................................
Amount of Fee Waiver/Expense % % % %
Reimbursement
---------------------------------------------------------------------------
NET EXPENSES AFTER WAIVERS(6) % % % %
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A, Class C and
Class D sales charges" beginning on page .

(3) A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year of
purchase.

(6)Villanova Mutual Fund Capital Trust (VMF), the Fund's investment adviser, and
the Fund have entered into a written contract limiting operating expenses to
those listed in "Net Expenses After Waivers" through February 28, 2002. The
Fund is authorized to reimburse VMF for management fees previously waived
and/or for the cost of Other Expenses paid by VMF provided that any such
reimbursement will not cause the Fund to exceed the expense limitations noted
above. The Fund's ability to reimburse VMF in this manner only applies to
fees paid or reimbursements made by VMF at some time within the first five
years from the time the Fund commenced operations.

5
<PAGE> 55

Fund Summaries -- Nationwide High Yield Bond Fund

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

You would pay the following expenses on the same investment if you did not sell
your shares(1):

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B shares $ $ $ $
................................................................
Class C shares $ $ $ $
</TABLE>

---------------

(1)Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

6
<PAGE> 56

FUND SUMMARIES -- THE BOND FUNDS NATIONWIDE BOND FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks as high a level of current income as is consistent with
preservation of capital.

To achieve its goal, the Fund seeks an attractive risk-adjusted total return,
with an emphasis on current income. It seeks to achieve its goal by investing
primarily in investment-grade securities, focusing largely on corporate bonds
and U.S. government securities. Under normal market conditions, the Fund will
invest at least 65% of its total assets in bonds, which includes debentures and
notes.
The Fund also invests in foreign
government and corporate bonds,
denominated in U.S. dollars, and in
mortgage-backed securities. It may also
invest in commercial paper rated in one
of the two highest rating categories by a

rating agency.

INVESTMENT-GRADE SECURITIES
The Fund focuses on "investment grade" taxable debt
securities, including corporate debt instruments that
have been rated within the four highest rating
categories by a nationally recognized statistical
rating organization (rating agency), such as Standard
& Poor's Corporation or Moody's Investors Service,
Inc. The rating agency evaluates a debt security,
measures the issuer's financial condition and
stability, and assigns a rating to the security. By
measuring the issuer's ability to pay back the debt,
ratings help investors evaluate the safety of their
bond investments.

The Fund's portfolio manager will consider the duration of particular bonds and
the Fund's overall portfolio when managing the Fund. The Fund will have a
duration of four to seven years. In choosing to buy a debt security, the
portfolio manager looks for value. A security may be sold to take advantage of
more favorable opportunities. The Fund may sell a debt security as it gets
closer to maturity in order to maintain the Fund's target duration and achieve
an attractive total return.

Duration is the sensitivity of the net asset value of
the Fund to changes in interest rates.

PRINCIPAL RISKS

Because the value of your investment will fluctuate, there is the risk that you
will lose money. Your investment will decline if the value of the Fund's
investments decrease. The value of your shares will also be impacted in part by
the portfolio manager's ability to assess economic conditions and investment
opportunities.

CREDIT RISK. Credit risk is the risk that the issuer of a debt security will be
unable to make the required payments of interest and/or repay the principal when
due. In addition, there is a risk that the rating of a debt security of the Fund
may be lowered if an issuer's financial condition changes, which may lead to a
greater price fluctuation in the Fund.

PREPAYMENT RISK AND EXTENSION RISK. The issuers of mortgage-backed securities
may be able to repay principal in advance, and are especially likely to do so
when interest rates fall. Prepayment risk is the risk that because prepayments
generally occur when interest rates are falling, a Fund may have to reinvest the
proceeds from prepayments at lower rates. Changes in prepayment rates can make
the price and yield of mortgage-backed securities volatile. When mortgage-backed
securities are prepaid, the Fund may also fail to recover premiums paid for the
securities, resulting in an unexpected capital loss, and the Fund may have to
reinvest the proceeds from the repayment at lower rates. In addition, rising
interest rates may cause prepayments to occur at slower than expected rates
thereby effectively lengthening the maturity of the securities and making them
more sensitive to interest rate changes. Extension risk is the risk that
anticipated payments on principal may not occur, typically because of a rise in
interest rates, and the expected maturity of the security will increase. During
periods of rapidly rising interest rates, the anticipated maturity of a security
may be extended past what the portfolio manager anticipated, affecting the
maturity and volatility of the Fund.

LIQUIDITY RISK. Liquidity risk is the risk that a security cannot be sold, or
cannot be sold quickly, at an acceptable price.

7
<PAGE> 57

Fund Summaries

FOREIGN RISK. To the extent the Fund invests in foreign securities, investments
in foreign securities involve risks in addition to those of U.S. investments.
These risks involve political and economic risks, currency fluctuations, higher
transaction costs, and delayed settlement. To the extent that the Fund invests
in countries with emerging markets, the foreign securities risks are magnified
since these countries may have unsafe governments and less established markets.

For additional information, see "More about the Bond Funds."

PERFORMANCE

ANNUAL RETURNS -- CLASS D SHARES(1)

Best Quarter: 8.7% 2nd qtr. of 1995
Worst Quarter: -5.0% 1st qtr. of 1994
---------------

(1) These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown. Please call
1-800-637-0012 to obtain the Fund's current 30-day yield.

---------------

(1) These returns reflect performance after sales charges and expenses are
deducted, and include the performance of its predecessor fund prior to May
11, 1998.

(3)These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the Fund (May 11, 1998), and which is the
same as the performance shown for the Class D shares through May 1, 1998. In
addition, for the period from May 11, 1998 through December 31, 2000, which
is prior to the implementation of the Class C shares, the performance of
Class C shares is based on the performance shown for Class D shares. These
returns have been restated for sales charges but not for fees applicable to
Class C shares. Had Class C shares been in existence for the time periods
presented, the performance for Class C shares would have been lower as a
result of its additional expenses.

(4) The Lehman Brothers Government/Corporate Bond Index -- an unmanaged index of
government and corporate bonds -- gives a broad look at how the prices of
U.S. government and corporate bonds have performed. These returns do not
include the effect of any sales charges or expenses. If sales charges and
expenses were deducted, the actual returns of this Index would be lower.

8
<PAGE> 58

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Fund.

<TABLE>
<CAPTION>
Shareholder Fees(1)
(paid directly from your Class A Class B Class C Class D
investment) shares shares shares shares
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge 4.50%(2) None 1.00% 4.50%(2)
(Load) imposed on
purchases (as a
percentage of offering
price)
...............................................................
Maximum Deferred Sales None(3) 5.00%(4) 1.00%(5) None
Charge (Load) imposed on
redemptions (as a
percentage of original
purchase price or sale
proceeds, as applicable)
</TABLE>

<TABLE>
<CAPTION>
Annual Fund Operating Expenses Class A Class B Class C Class D
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50% 0.50%
.....................................................................
Distribution and/or Service 0.25% 0.85% 0.85% None
(12b-1) Fees
.....................................................................
Other Expenses % % % %
---------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(3) A CDSC of up to 1% may be imposed on certain redemptions of Class A shares
purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1)Expenses paid on the same investment in Class A and Class D shares do not
change whether or not you sell your shares.

9
<PAGE> 59

FUND SUMMARIES -- THE BOND FUNDS NATIONWIDE TAX-FREE INCOME
FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks as high a level of current income that is exempt from federal
income taxes as is consistent with the preservation of capital through investing
in investment-grade municipal obligations.

To achieve its objective, the Fund invests at least 80% of its net assets in
securities, the interest income from which is exempt from federal income taxes.
In addition, the Fund may also invest up to 20% of its net assets in securities,
the interest income from which is treated as a preference item for purposes of
the federal alternative minimum tax. The Fund focuses on municipal obligations
that have been rated within the four highest rating categories by a rating
agency (such as Standard & Poor's Corporation or Moody's Investors Services,
Inc.), or if not rated, are of equivalent quality. These obligations are issued
by states, U.S. territories, and their political subdivisions.

MUNICIPAL OBLIGATIONS
Municipal obligations are issued by, or on behalf of,
states, cities and other local governmental entities,
to pay for construction and other projects. They are
loans that investors make to a government or
governmental entity; the government or governmental
entity gets the cash it needs to complete its project
and the lenders earn interest payments and get their
principal back.

The Fund may also invest in other types of municipal obligations, including
tax-exempt zero-coupon securities, and floating and variable-rate bonds. In
choosing to buy a security, the portfolio manager looks for value. A security
may be sold to take advantage of more favorable opportunities.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline if the value of the
Fund's investments decrease. The value of your shares will also be impacted in
part by the portfolio manager's ability to assess economic conditions and
investment opportunities.

TAX RISK. As a shareholder in the Fund, you may also face two types of tax
risk. There is a risk that the federal income tax rate will be reduced and the
value of the tax-exemption will be less valuable. There is also the risk that a
municipal bond, which is issued as tax-exempt, will eventually be declared
taxable.

LIQUIDITY RISK. Liquidity risk is the risk that a security cannot be sold, or
cannot be sold quickly, at an acceptable price.

10
<PAGE> 60

PERFORMANCE

ANNUAL RETURNS -- CLASS D SHARES(1)

Best Quarter: 8.1% 1st qtr. of 1995
Worst Quarter: -7.2% 1st qtr. of 1994
---------------

(1) These annual returns do not include sales charges. If the sales charges were
included, the annual returns would be lower than those shown. Please call
1-800-637-0012 for the Fund's current 30-day yield.

<TABLE>
<CAPTION>
Average annual returns -- as of 12/31/00(1) 1 year 5 years 10 years
-------------------------------------------------------------------------
<S> <C> <C> <C>
Class A shares(2) % % %
.........................................................................
Class B shares(2) % % %
.........................................................................
Class C shares(3) % % %
.........................................................................
Class D shares % % %
.........................................................................
Lehman Brothers Municipal % % %
Bond Index(4)
</TABLE>

---------------

(1) These returns reflect performance after sales charges and expenses are
deducted, and include the performance of its predecessor fund prior to May
11, 1998.

(3)These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the Fund (May 11, 1998), and which is the
same as the performance shown for the Class D shares through May 1, 1998. In
addition, for the period from May 11, 1998 through December 31, 2000, which
is prior to the implementation of the Class C shares, the performance of
Class C shares is based on the performance shown for Class D shares. These
returns have been restated for sales charges but not for fees applicable to
Class C shares. Had Class C shares been in existence for the time periods
presented, the performance for Class C shares would have been lower as a
result of its additional expenses.

(4) The Lehman Brothers Municipal Bond Index -- an
unmanaged index of municipal bonds -- gives a broad look at how the bond
prices of municipal bonds have performed. These returns do not include the
effect of any sales charges or expenses. If sales charges and expenses were
deducted, the actual returns of this Index would be lower.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Fees(1) Class A Class B Class C Class D
(paid directly from your investment) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) imposed 4.50%(2) None 1.00%
on purchases (as a percentage of 4.50%(2)
offering price)
...........................................................................
Maximum Deferred Sales Charge (Load) None(3) 5.00%(4) 1.00%(5) None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

11
<PAGE> 61

Fund Summaries

Annual Fund Operating Expenses Class A Class B Class C Class D
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50% 0.50%
.....................................................................
Distribution and/or 0.25% 0.85% 0.85% None
Service (12b-1) Fees
.....................................................................
Other Expenses % % % %
---------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(3) A CDSC of up to 1% may be imposed on certain redemptions of Class A shares
purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1)Expenses paid on the same investment in Class A and Class D shares do not
change whether or not you sell your shares.

12
<PAGE> 62

FUND SUMMARIES -- THE BOND FUNDS NATIONWIDE GOVERNMENT BOND
FUND

(FORMERLY "NATIONWIDE
INTERMEDIATE
U.S. GOVERNMENT BOND
FUND")

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks as high a level of current income as is consistent with the
preservation of capital.

To achieve its goal, the Fund seeks an attractive risk-adjusted total return
with an emphasis on current income. It seeks to achieve its goal primarily by
investing at least 65% of its total assets in U.S. government and agency bonds,
bills and notes. The Fund may also invest in mortgage-backed securities issued
by U.S. government agencies. The dollar-weighted average portfolio maturity of
the Fund's assets will generally be five to nine years.

BOND MATURITY
Bond maturity simply means the life of a bond before
it comes due and must be repaid. Generally, the longer
the bond's maturity, the higher the interest rate.
This compensates investors for tying up their
investments for longer periods. However, as described
below, bonds with longer maturities are also more
sensitive to price shifts caused by interest rate
changes.

To select investments that fit the Fund's objectives, the portfolio manager uses
interest rate expectations, yield-curve analysis, economic forecasting, market
sector analysis and other techniques. The Fund may also look for bonds that the
portfolio manager believes are undervalued, with the goal of buying them at
attractive prices and watching them increase in value. A security may be sold to
take advantage of more favorable opportunities.

The Fund's portfolio manager will consider the duration of particular bonds and
the Fund's overall portfolio when managing the Fund. The Fund will typically
have a duration of four to six years. A security may be sold to take advantage
of more favorable opportunities.

Duration is the sensitivity of the net asset value of
the Fund to changes in interest rates.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decrease. The value of your shares will also be
impacted in part by the portfolio manager's ability to assess economic
conditions and investment opportunities.

Some of the securities purchased by the Government Bond Fund are virtually
immune to credit risk, because they are issued and backed by the "full faith and
credit" of the U.S. government. This means the U.S. government has the power to
tax its citizens in order to pay its debts. Other securities are issued by U.S.
government agencies and are not backed by the full faith and credit of the U.S.
government, but are backed by the issuing agency.

13
<PAGE> 63

Fund Summaries

the proceeds from the repayment at lower rates. In addition, rising interest
rates may cause prepayments to occur at slower than expected rates thereby
effectively lengthening the maturity of the securities and making them more
sensitive to interest rate changes. Extension risk is the risk that anticipated
payments on principal may not occur, typically because of a rise in interest
rates, and the expected maturity of the security will increase. During periods
of rapidly rising interest rates, the anticipated maturity of a security may be
extended past what the portfolio manager anticipated, affecting the maturity and
volatility of the Fund.

LIQUIDITY RISK. Liquidity risk is the risk that a security cannot be sold, or
cannot be sold quickly, at an acceptable price.

For additional information, see "More About the Bond Funds".

PERFORMANCE

ANNUAL RETURNS -- CLASS D SHARES(1)

<TABLE>
<CAPTION>
ANNUAL RETURNS -- CLASS D SHARES(1)
-----------------------------------
<S> <C>
1993 8.8
1994 -3.6
1995 18.6
1996 3.3
1997 9.5
1998 8.2
1999 -2.0
2000 6.0
</TABLE>

Best Quarter: % qtr. of

Worst Quarter: % qtr. of

---------------

<TABLE>
<CAPTION>
Since
inception
Average annual returns(1) -- as of 12/31/00 1 year 5 years 2/10/92
---------------------------------------------------------------------------
<S> <C> <C> <C>
Class A shares(2) % % %
...........................................................................
Class B shares(2) % % %
...........................................................................
Class C shares(3) % % %
...........................................................................
Class D shares % % %
...........................................................................
Merrill Lynch Government
Master Index(4) % % %
</TABLE>

---------------

(1) These returns reflect performance after sales charges and expenses are
deducted, and include the performance of its predecessor fund prior to May
11, 1998.

(3)These returns include performance based on the Fund's predecessor, which was
achieved prior to the creation of the Fund (May 11, 1998), and which is the
same as the performance shown for the Class D shares through May 1, 1998. In
addition, for the period from May 11, 1998 through December 31, 2000, which
is prior to the implementation of the Class C shares, the performance of
Class C shares is based on the performance shown for Class D shares. These
returns have been restated for sales charges but not for fees applicable to
Class C shares. Had Class C shares been in existence for the time periods
presented, the performance for Class C shares would have been lower as a
result of its additional expenses.

(4) The Merrill Lynch Government Master Index gives a broad look at how U.S.
government bonds have performed. These returns do not include the effect of
any sales charges or expenses. If sales charges and expenses were deducted,
the actual returns of this Index would be lower.

14
<PAGE> 64

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Fees(1) Class A Class B Class C Class D
(paid directly from your investment) shares shares shares shares
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) imposed 4.50%(2) None 1.00%
on purchases (as a percentage of 4.50%(2)
offering price)
...........................................................................
Maximum Deferred Sales Charge (Load) None(3) 5.00%(4) 1.00%(5) None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

Annual Fund Operating Expenses Class A Class B Class C Class D
(deducted from Fund assets) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50% 0.50%
.....................................................................
Distribution and/or Service 0.25% 0.85% 0.85% None
(12b-1) Fees
.....................................................................
Other Expenses % % % %
---------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
.....................................................................
Amount of Fee % % % %
Waiver/Expense
Reimbursement
---------------------------------------------------------------------
NET EXPENSES AFTER WAIVERS(6) % % % %
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(3) A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6) VMF and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February
28, 2002. The Fund is authorized to reimburse the adviser for management
fees previously waived and/or for the cost of Other Expenses paid by VMF
provided that any such reimbursement will not cause the Fund to exceed the
expense limitations noted above. The Fund's ability to reimburse VMF in this
manner only applies to fees paid or reimbursement made by VMF at some time
within the first five years from the time the Fund commenced operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

You would pay the following expenses on the same investment if you did not sell
your shares:(1)

---------------

(1)Expenses paid on the same investment in Class A and Class D shares do not
change whether or not you sell your shares.

15
<PAGE> 65

FUND SUMMARIES -- THE BOND FUNDS NATIONWIDE MORLEY ENHANCED
INCOME FUND
(FORMERLY "MORLEY ENHANCED
INCOME FUND")

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks to provide a high level of current income while preserving
capital and minimizing market fluctuations in your account value.

To achieve its goals, under normal conditions, the Fund invests primarily in
high-grade debt securities issued by the U.S. government and its agencies, as
well as by corporations. The Fund also purchases mortgage-backed and
asset-backed securities. The debt securities in which the Fund invests pay
interest on either a fixed-rate or variable-rate basis. The Fund will be managed
so that its duration will not exceed two years. The Fund may also enter into
futures or options contracts solely for
the purpose of adjusting the duration of
the Fund to minimize fluctuation of the Fund's market value. Depending on market
conditions, the Fund may also enter into book value maintenance agreements (wrap
contracts) with one or more highly rated financial institutions for the purpose
of maintaining some of the Fund's assets at a stable book value.

DURATION is the sensitivity of the net asset value of
the Fund to changes in interest rates.

When selecting securities for the Fund, the Fund's portfolio managers will
consider expected changes in interest rates and in the price relationships among
various types of securities. They will attempt to identify and purchase
securities offering the best combination of yield, maturity and relative price
performance. The Fund's portfolio managers may elect to sell securities in order
to buy others which they believe will better serve the objectives of the Fund. A
security may be sold to take advantage of more favorable opportunities.

The Fund's portfolio managers expect that careful selection of securities,
relatively short portfolio duration, and the potential availability and use of
wrap contracts will enable the Fund to meet its investment objective of limited
fluctuation of the Fund's net asset value. There can be no guarantee that the
Fund will meet its objective.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decrease. The value of your shares will also be
impacted in part by the adviser's ability to assess economic conditions and
investment opportunities.

CREDIT RISK. Credit risk is the risk that the issuer of a debt security will be
unable to make the required payments of interest and/or repay the principal when
due. In addition, there is a risk that the rating of a debt security may be
lowered if an issuer's financial condition changes, which may lead to a greater
price fluctuation in the securities the Fund owns. The Fund limits this risk by
purchasing high-grade debt securities.

INTEREST RATE AND INFLATION RISK. Interest rate risk is the risk that increases
in market interest rates may decrease the value of debt securities held by the
Fund. In general, the prices of debt securities fall when interest rates
increase and rise when interest rates decrease. Typically, the longer the
maturity of a debt security, the more sensitive it is to price shifts as a
result of interest rate changes. There is also inflation risk when investments
in debt securities are initially made when inflation and interest rates are low
and the value of these debt securities subsequently fall as inflation rises
because higher paying interest rates become more attractive than lower paying
interest rates. Because the Fund invests primarily in fixed-rate debt securities
with short-to-moderate maturities or variable-rate debt securities with frequent
interest rate resets, this risk is lower than for funds with longer maturities.
The Fund may also use wrap contracts to limit the impact of interest rate
changes on the Fund's net asset value.

PREPAYMENT RISK AND EXTENSION RISK. The issuers of mortgage- and asset-backed
securities may be able to repay principal in advance, and are especially likely
to do so when interest rates fall. Prepayment risk is the risk that because
prepayments generally occur when interest rates are falling, a Fund may have to
reinvest the proceeds from prepayments at lower rates. Changes in prepayment
rates can make the price and yield of mortgage- and asset-backed securities
volatile. When mortgage- and asset-backed securities are prepaid, the Fund may
also fail to recover premiums paid for the securities, resulting in an
unexpected capital loss, and the Fund may have to reinvest the proceeds from the
repayments at lower rates. In addition, rising interest rates may cause
prepayments to occur at a slower than expected rates thereby effectively
lengthening the maturity of the securities and making them more sensitive to
interest rate changes. Extension risk is the risk that anticipated payments on
principal may not occur, typically because of a rise in interest rates, and the
expected maturity of the security will increase. During periods of rapidly
rising interest rates, the anticipated maturity of a security may be extended
past what the

16
<PAGE> 66

portfolio manager anticipated, affecting the maturity and volatility of the
Fund.

RISK OF USING WRAP CONTRACTS. If the Fund elects to use wrap contracts, it will
incur certain additional risks associated with these contracts and their
providers. The credit standing of certain wrap providers may deteriorate over
time, impairing the value of their contracts, and the Fund may not be able to
renegotiate, replace, or provide for successor contracts in a timely or
economical manner.

If either or both of these events were to occur, the duration of the Fund could
be affected, and the net asset value of the Fund could be subject to increased
fluctuation.

LIQUIDITY RISK. Liquidity risk is the risk that a security cannot be sold, or
cannot be sold quickly, at an acceptable price. The Fund will limit liquidity
risk by investing primarily in relatively short-term, high-grade securities, and
by maintaining a reasonable cash balance to fund redemptions and investment
purchase opportunities.

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counter
parties to over-the-counter derivatives contracts present default risks if such
counterparties fail to fulfill their obligations. Derivatives can make the Fund
less liquid and harder to value, especially in declining markets. Also, the Fund
may suffer disproportionately heavy losses relative to the amount of its
investments in derivative contracts. Lastly, changes in the value of derivative
contracts or other hedging instruments may not match or fully offset changes on
the value of the hedged portfolio securities.

For more detailed information about the Fund's investment and risks, see "More
About the Bond Funds" beginning on page .

PERFORMANCE

The following bar chart and table present the performance of the Fund. The bar
chart shows the Fund's annual total return. The table shows the Fund's average
annual total returns for that time period compared to the returns of a
broad-based securities index. The bar chart and table provide some indication of
the risks of investing in the Fund. Remember, however, that past performance
does not guarantee similar results in the future.

ANNUAL RETURNS -- CLASS A SHARES(1)

Best Quarter: % qtr. of 2000

Worst Quarter: % qtr. of 2000

---------------

<TABLE>
<CAPTION>
Since
Average annual returns -- as of 12/31/00(1) 1 year Inception (2)
----------------------------------------------------------------------
<S> <C> <C>
Class A shares % %
......................................................................
Institutional Service Class shares % %
......................................................................
Institutional Class shares % %
......................................................................
Lipper Ultra-Short Bond Index(3) % %
</TABLE>

---------------

(1)These returns reflect performance after sales charges, if any, and expenses
are deducted.

(2)The Fund commenced operations on December 30, 1999.

(3)The Lipper Ultra-Short Bond Fund Index consists of funds with at least 65% of
their assets in investment-grade debt instruments and maintains a portfolio
with average maturity between 91 and 365 days. These returns do not include
the effect of any sales charges or expenses. If sales charges and expenses
were deducted, the actual returns of this Index would be lower.

17
<PAGE> 67

Fund Summaries

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
selling shares of the Fund.

<TABLE>
<CAPTION>
Institutional
Shareholder Fees(1) Class A Service Class Institutional
(paid directly from your investment) shares shares shares
-----------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) imposed 4.50%(2) None None
on purchases (as a percentage of
offering price)
.............................................................................
Maximum Deferred Sales Charge (Load) None(3) None None
imposed on redemptions (as a
percentage of original purchase
price or sale proceeds, as
applicable)
</TABLE>

<TABLE>
<CAPTION>
Institutional Institutional
Annual Fund Operating Expenses Class A Service Class Class
(deducted from Fund assets) shares shares shares
-----------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees 0.35% 0.35% 0.35%
.......................................................................
Distribution and/or Service 0.25% None None
(12b-1) Fees
.......................................................................
Other Expenses % % %
-----------------------------------------------------------------------
TOTAL ANNUAL FUND % % %
OPERATING EXPENSES
.......................................................................
Amount of Fee % % %
Waiver/Expense
Reimbursement
-----------------------------------------------------------------------
NET EXPENSES AFTER WAIVERS(4) % % %
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares, -- Class A, Class D and
Class C sales charges" on page .

(3) A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(4) Union Bond & Trust Company (UBT) and the Fund have entered into a written
contract limiting operating expenses to those listed in "Net Expenses After
Waivers" through February 28, 2002. The Fund is authorized to reimburse UBT
for management fees previously waived and/or for the cost of Other Expenses
paid by UBT provided that any such reimbursement will not cause the Fund to
exceed the expense limitations noted above. The Fund's ability to reimburse
UBT in this manner only applies to fees paid or reimbursements made by UBT
at some time within the first five years from the time the Fund commenced
operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A shares $ $
.............................................................
Institutional Service
Class shares $ $
.............................................................
Institutional Class
shares $ $
</TABLE>

18
<PAGE> 68

FUND SUMMARY -- THE MONEY MARKET FUND

This section summarizes key information about the Money Market Fund. Use it to
compare this Fund with other mutual funds. For more detailed information about
the risks and investment techniques of this Fund, see "More About the Money
Market Fund" on page .

OBJECTIVE AND PRINCIPAL STRATEGIES

This Fund seeks as high a level of current income as is consistent with the
preservation of capital and maintenance of liquidity.

It seeks to achieve this objective by investing in high-quality money market
obligations maturing in 397 days or less, including corporate obligations, U.S.
government and agency bonds, bills and notes, the obligations of foreign
governments, and the obligations of U.S. banks and U.S. branches of foreign
banks if they are denominated in U.S. dollars. The Fund may also invest in
floating- and adjustable-rate obligations and asset-backed commercial paper and
may enter into repurchase agreements. Typically, the Fund's dollar-weighted
average maturity will be 90 days or less.

WHY INVEST IN A MONEY MARKET FUND?
By investing in short-term corporate and government
bonds and other debt instruments, money market funds
provide current income to investors and allow easy
access to their money. Money market funds are for
risk-averse investors or investors who want to earn
competitive yields on cash they may need on short
notice. While the Money Market Fund pays dependable
income, there is no guarantee that the Fund's earnings
will stay ahead of inflation or always provide a
certain level of income.

The Fund invests in securities which the portfolio manager believes to have the
best return potential. Because the Fund invests in short-term securities, it
will generally sell securities only to meet liquidity needs, to maintain target
allocations and to take advantage of more favorable opportunities.

PRINCIPAL RISKS

Although the Fund's objective is to preserve capital, there can be no guarantee
that the Fund will be able to maintain a stable net asset value of $1.00 per
share; therefore you could lose money. Investments in the Fund are not bank
deposits and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.

CREDIT RISK. Credit risk is the risk that the issuer of a debt security will be
unable to make the required payments of interest and/or repay the principal when
due. This risk is significantly reduced due to the short-term nature of the debt
securities held by the Fund. In addition, there is a risk that the rating of a
debt security may be lowered if the issuer's financial condition changes. This
could lead to a greater fluctuation in the value of the Fund.

19
<PAGE> 69

Fund Summaries

PERFORMANCE

The following bar chart and table show two aspects of the Fund: volatility and
performance. The bar chart shows the volatility -- or variability -- of the
Fund's annual total returns over time, and shows that fund performance can
change from year to year. The table shows the Fund's average annual total
returns for certain time periods compared to the returns of the Consumer Price
Index. The bar chart and table provide some indication of the risks of investing
in the Fund. Remember, however, that past performance does not guarantee similar
results in the future.

ANNUAL RETURNS -- PRIME SHARES

Best Quarter: % qtr. of

Worst Quarter: % qtr. of

<TABLE>
<CAPTION>
Average annual returns -- as of 12/31/00 1 year 5 years 10 years
-----------------------------------------------------------------------
<S> <C> <C> <C>
Prime Shares(1) % % %
.......................................................................
Service Class Shares(2) % % %
.......................................................................
Consumer Price Index(3) % % %
</TABLE>

---------------

(1) These returns reflect performance after expenses are deducted and include
the performance of its predecessor fund prior to May 11, 1998. Prime shares
were created after January 4, 1999. Please call 1-800-637-0012 for the
Fund's current 7-day yield.

(2)These returns include performance of the Fund predecessor, which was achieved
prior to the creation of the Service Class (January 4, 1999), which is the
same as the performance shown for the Prime Shares through January 4, 1999.
The returns have not been restated for the higher fees of the Service Class
shares. Had Service Class shares been in existence for the time periods
presented, the performance of the Service Class shares would have been lower
as a result of its additional expenses.

(3) The Consumer Price Index represents changes in prices of basic goods and
services purchased for consumption by urban households.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

There are no sales charges to purchase or sell shares of the Money Market Fund.

<TABLE>
<CAPTION>
Service
Annual Fund Operating Expenses Prime Class
(deducted from Fund assets) Shares Shares
------------------------------------------------------------
<S> <C> <C>
Management Fees 0.40% 0.40%
............................................................
Distribution and Service (12b-1) Fees None 0.15%
............................................................
Other Expenses % %
............................................................
TOTAL ANNUAL FUND OPERATING EXPENSES % %
</TABLE>

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the cost of this Fund with other mutual funds.

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Prime Shares $ $ $ $
...............................................................
Service Class Shares $ $ $ $
</TABLE>

20
<PAGE> 70

MORE ABOUT THE BOND FUNDS

PRINCIPAL INVESTMENTS AND TECHNIQUES AND RISKS

The Bond Funds may use the following principal investments and techniques
described below to increase returns, protect assets or diversify investments.
Unless otherwise indicated, each of the Bond Funds may utilize those techniques.
These techniques are subject to certain risks.

The Statement of Additional Information (SAI) contains additional information
about all of the Bond Funds, including the Bond Funds' other investment
techniques. To obtain a copy of the SAI, see the back cover.

INVESTMENT-GRADE BONDS (BOND, TAX-FREE, GOVERNMENT AND ENHANCED INCOME). These
include U.S. government bonds and corporate bonds and municipal bonds that have
been rated within the four highest rating categories by a rating agency. The
rating agency evaluates a bond, measures the issuer's financial condition and
stability and assigns a rating to the security. If a rating agency changes the
bond's rating, it may affect the bond's value. By measuring the issuer's ability
to pay back the debt, ratings help investors evaluate the safety of their bond
investments.

MEDIUM-GRADE OBLIGATIONS (HIGH YIELD BOND, BOND, AND TAX-FREE
INCOME). Medium-grade securities are obligations rated in the fourth highest
rating category by any rating agency. Medium-grade securities, although
considered investment-grade, have speculative characteristics and may be subject
to greater fluctuations in value than higher-rated securities. In addition, the
issuers of medium-grade securities may be more vulnerable to adverse economic
conditions or changing circumstances than issuers of higher-rated securities.

All ratings are determined at the time of investment. Any subsequent rating
downgrade of a debt obligation will be monitored by VMF to consider what action,
if any, a Fund should take consistent with its investment objective. There is no
requirement that any such securities must be sold if downgraded.

U.S. GOVERNMENT SECURITIES (GOVERNMENT, BOND AND ENHANCED INCOME). These
securities include Treasury bills, notes, and bonds issued or guaranteed by the
U.S. government and securities issued by U.S. government agencies, including:

- The Federal Housing Administration, the Farmers Home Administration, and the
Government National Mortgage Association (GNMA), including GNMA pass-through
certificates, which are backed by the full faith and credit of the United
States government;
- The Federal Home Loan Banks;
- The Federal National Mortgage Association (FNMA);
- The Student Loan Marketing Association and Federal Home Loan Mortgage
Corporation (FHLMC); and
- The Federal Farm Credit Banks.

Although there is virtually no credit risk with these securities, neither the
U.S. government nor its agencies guarantee the market value of their securities.
Interest rate changes, prepayment rates and other factors may affect the value
of these securities.

ZERO-COUPON SECURITIES (TAX-FREE AND HIGH YIELD BOND). Zero-coupon securities
pay no interest during the life of the security, and are issued by a wide
variety of corporate and governmental issuers. Certain zero-coupon securities
are sold at a deep discount.

Zero-coupon securities may be subject to greater price changes, as a result of
changing interest rates than bonds that make regular interest payments. Their
value tends to grow more during periods of falling interest rates and,
conversely, tends to fall more during periods of rising interest rates than
bonds that make regular interest payments. Although they are not traded on a
national securities exchange, they are widely traded by brokers and dealers, and
are considered liquid. Investors in zero-coupon bonds are required by federal
income tax laws to pay interest on the payments they would have received had a
payment been made. So, to avoid federal income tax liability, a Fund may be
required to make distributions to shareholders and may have to sell some of
their assets at inappropriate times in order to generate cash to make the
distributions.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES (GOVERNMENT, BOND AND ENHANCED
INCOME). U.S. government mortgage-backed securities are securities that are
secured by and paid from a pool of mortgage loans on real property and issued or
guaranteed by the U.S. government or one of its agencies. Mortgage-backed
securities may also be issued by private issuers; however, as a principal
strategy, the Government Bond Fund will not invest in mortgage-backed securities
issued by private issuers. Collateralized mortgage obligations (CMOs) are
securities that have mortgage loans or mortgage pass-through securities, such as
GNMA, FNMA or FHLMC certificates as their collateral. CMOs can be issued by the
U.S. government or its agencies or by private lenders.

21
<PAGE> 71

More About the Bond Funds

Mortgage-backed securities are subject to interest rate risk. They are also
subject to credit risk if they are issued by private issuers. CMOs and other
mortgage-backed securities are also subject to prepayment risk. With respect to
prepayment risk, when interest rates fall, homeowners may refinance their loans
and the mortgage-backed securities may be paid off sooner than anticipated.
Reinvesting the returned principal in a lower interest-rate market would reduce
the Fund's income. Mortgage-backed securities are also subject to extension risk
as described above if rates increase and prepayments slow, and the possibility
of losing principal as a result of faster than anticipated prepayment of
securities purchased at a premium.

Asset-backed securities are securities that are secured by and paid from a pool
of underlying assets, such as automobile installment sales contracts, home
equity loans, property leases and credit card receivables. Asset-backed
securities are generally issued by private issuers and are subject to interest
rate, credit and prepayment risks like mortgage-backed securities. Only the
Enhanced Income Fund will invest in asset-backed securities as a principal
technique.

FLOATING- AND VARIABLE-RATE SECURITIES (ALL BOND FUNDS). Floating- and
variable-rate securities do not have fixed interest rates; the rates change
periodically. The interest rate on floating-rate securities varies with changes
to the underlying index (such as the Treasury-bill rate), but the interest rate
on variable-rate securities changes at preset times based upon some underlying
index. Some of the floating- or variable-rate securities will be callable by the
issuer, which means they can be paid off before their maturity date.

These securities are subject to interest rate risk like other debt securities.
In addition, because they may be callable, they are also subject to the risk
that a Fund will be repaid prior to the stated maturity, and the repaid
principal will be reinvested in a lower interest-rate market, reducing a Fund's
income. A Fund will only purchase floating- and variable-rate securities of the
same quality as the debt securities they would otherwise purchase.

MUNICIPAL OBLIGATIONS (TAX-FREE INCOME). Municipal obligation interest is
generally exempt from federal income taxes.

Municipal obligations include revenue bonds (which are paid from the revenue of
a specific project), general-obligation bonds (which are backed by the taxing
power of the issuer), and moral-obligation bonds (which are normally issued by
special-purpose public authorities). If the issuer of moral-obligation bonds is
unable to pay interest from current revenues, it can draw from a reserve fund,
the restoration of which is a moral commitment but not a legal obligation of
that issuer. The principal risks of municipal obligations are credit risk and
interest rate risk, although local, political and economic factors may also
adversely affect the value and liquidity of municipal securities.

CONVERTIBLE SECURITIES (HIGH YIELD BOND). In addition to investing in bonds, the
Fund may invest in convertible securities -- also known as
convertibles -- including bonds, debentures, notes, preferred stocks, and other
securities. Convertibles are hybrid securities that have characteristics of both
bonds and stocks. Like bonds, they pay interest. Because they can be converted
into common stock within a set period of time, at a specified price or formula,
convertibles also offer the chance for capital appreciation, like common stocks.

Convertibles tend to be more stable in price than the underlying common stock,
although price changes in the underlying common stock can affect the
convertible's market value. For example, as an underlying common stock loses
value, convertibles present less opportunity for capital appreciation, and may
also lose value. Convertibles, however, may sustain their value better than
common stock because they pay income, which tends to be higher than common stock
dividend yields.

Because of this fixed-income feature, convertibles may compete with bonds as a
good source of dependable income. Therefore, if interest rates increase and
"newer," better-paying bonds become more attractive, the value of convertibles
may decrease. Conversely, if interest rates decline, convertibles could increase
in value.

Convertibles tend to be more secure than common stock (companies must generally
pay holders of convertibles before they pay holders of common stock), but they
are typically less secure than similar non-convertible securities such as bonds
(bondholders must generally be paid before holders of convertibles and common
stock). Because convertibles are usually subordinate to bonds in terms of
payment priority, convertibles typically are rated below investment grade by a
nationally recognized rating agency, or they are not rated at all.

22
<PAGE> 72

WHEN-ISSUED SECURITIES (HIGH YIELD BOND). When the Fund purchases securities on
a "when-issued" basis, it enters into a commitment to buy the security before
the security has been issued. The Fund's payment obligation and the interest
rate on the security are determined when the Fund enters into the commitment.
The security is typically delivered to the Fund 15 to 120 days later. No
interest accrues on the security between the time the Fund enters into the
commitment and the time the security is delivered. If the value of the security
being purchased falls between the time the Fund commits to buy it and the
payment date, the Fund may sustain a loss. In addition, when the Fund buys a
security on a when-issued basis, it is subject to the risk that market rates of
interest will increase before the time the security is delivered, with the
result that the yield on the security delivered to the Fund may be lower than
the yield available on other, comparable securities at the time of delivery.

MATURITY. Every debt security has a stated maturity date -- when the issuer must
repay the bond's entire principal value to the investor. However, many bonds are
"callable," meaning their principal can be repaid earlier, on or after specified
call dates. Debt securities are most likely to be called when interest rates are
falling because the issuer can refinance at a lower rate, just as a homeowner
refinances a mortgage. In that environment, a bond's "effective maturity" is
usually its nearest call date. For mortgage-backed securities, the rate at which
homeowners pay down their mortgage principal helps to determine the effective
maturity of mortgage-backed bonds.

A bond mutual fund has no real maturity, but it does have a weighted average
maturity. This number is an average of the stated or effective maturities of the
underlying bonds, with each bond's maturity "weighted" by the percentage of fund
assets it represents. Funds that target maturities normally use the effective,
rather than the stated, maturities of the bonds in the portfolio when computing
the average. This provides additional flexibility in portfolio management but,
all else being equal, could result in higher volatility than a fund targeting a
stated maturity or maturity range.

DURATION. Duration is a calculation that seeks to measure the price sensitivity
of a bond or a mutual fund that primarily invests in debt securities to changes
in interest rates. It measures this sensitivity more accurately than maturity
because it takes into account the time value of cash flows generated over the
life of the debt security. Future interest and principal payments are discounted
to reflect their present value and are then multiplied by the number of years
they will be received to produce a value expressed in years -- the duration.
Effective duration takes into account call features and sinking fund payments
that may shorten a debt security's life.

DERIVATIVES (HIGH YIELD BOND AND ENHANCED INCOME). A derivative is a contract
whose value is based on the performance of an underlying financial asset, index
or other investment. For example, an option is a derivative because its value
changes in relation to the performance of an underlying stock. The value of an
option on a futures contract varies with the value of the underlying futures
contract, which in turn varies with the value of the underlying commodity or
security. Derivatives are available based on the performance of assets, interest
rates, currency exchange rates, and various domestic foreign indexes.

The Fund may use derivatives for any of the following purposes:

- To hedge against adverse changes in the market value of securities held by
or to be bought for the Fund. These changes may be caused by changing
interest rates, stock market prices or currency exchange rates.

- As a substitute for purchasing or selling securities or foreign currencies.

- To shorten or lengthen the effective maturity or duration of the Fund's
fixed income portfolio.

- In non-hedging situations, to attempt to profit from anticipated market
developments.

SHORT SALES (HIGH YIELD BOND). In selling a stock which the Fund does not own (a
short sale), the Fund may borrow the security sold short to make delivery to the
buyer. The Fund must then replace the security it has borrowed. If the price of
a security sold short goes up between the time of the short sale and the time
the Fund must deliver the security to the lender, the Fund will incur a loss.
The Fund must also pay the lender any interest accrued during the period of the
loan.

WRAP CONTRACTS (ENHANCED INCOME). Wrap contracts may cover certain assets of the
Fund and are intended to reduce the volatility of the Fund's net asset value. A
wrap contract is an agreement between the Fund and a financial institution,
typically a highly-rated bank or insurance company (a wrap provider), to
maintain certain Fund assets at their purchase price plus accrued interest.
Under normal circumstances, the

23
<PAGE> 73

More About the Bond Funds

value of a wrap contract is the difference between the aggregate book value and
the current market value of covered assets. A wrap contract therefore gains
value when the market price of covered assets declines, and decreases in value
when the market price of the covered assets increases. The Enhanced Income Fund
expects to pay an annual premium of between 0.10% and 0.20% on the book value of
any assets in the Fund which are covered by wrap contracts. The Enhanced Income
Fund does not anticipate purchasing contracts on more than 50% of the Fund's
assets.

Wrap contracts are considered illiquid assets of the Fund. In addition to
liquidity risk, wrap contracts are subject to the credit risk of the wrap
provider, and also to the risk that the Fund may be unable to replace a wrap
contract that is maturing or subject to termination. Although wrap contracts are
designed to reduce the volatility of the Fund's net asset value, they may not
always be able to do so.

PRINCIPAL RISKS

FOREIGN RISK (HIGH YIELD BOND, BOND).

- COUNTRY. General securities market movements in any country in which the
Fund has investments are likely to affect the value of the Fund's securities
that trade in that country. These movements will affect the Fund's share
price and the Fund's performance. The political, economic and social
structures of some countries in which the Fund invests may be less stable
and more volatile than those in the U.S. The risks of investing in these
countries include the possibility of the imposition of exchange controls,
currency devaluations, foreign ownership limitations, expropriation,
restrictions on removal of currency or other assets, nationalization of
assets, punitive taxes and certain custody and settlement risks.

- COMPANY. Foreign companies are not subject to the same disclosure,
accounting, auditing and financial reporting standards and practices as U.S.
companies and their securities may not be as liquid as securities of similar
U.S. companies. Foreign trading systems, brokers and companies generally
have less government supervision and regulation than in the U.S. A Fund may
have greater difficulty voting proxies, exercising shareholder rights,
pursuing legal remedies and obtaining judgments with respect to foreign
investments in foreign courts than with respect to U.S. companies in U.S.
courts. Generally, the Fund can decrease in value when the individual
securities it owns decrease in value. A company's securities can lose value
for various reasons, including poor profits, weakened finances, changes in
management, a downturn in the economy, or any other reason that leads
investors to lose faith in that security.

TEMPORARY DEFENSIVE POSITIONS

In response to economic, political or unusual market conditions, each of the
Bond Funds may adopt a temporary defensive position. The Tax-Free Income Fund
may invest up to 20% of its assets in cash and taxable money market bonds, and
the other Bond Funds may invest up to 100% of their assets in cash or money
market obligations. Should this occur, the Funds may not meet their investment
objectives and may miss potential market upswings.

24
<PAGE> 74

MORE ABOUT THE MONEY MARKET FUND

PRINCIPAL INVESTMENTS AND TECHNIQUES

The Money Market Fund may use the following principal investments and techniques
to increase returns, protect assets or diversify investments. These techniques
are subject to certain risks.

The SAI contains additional information about all of the Funds, including the
Money Market Fund's other investment techniques. To obtain a copy of the SAI,
see the back cover.

MONEY MARKET OBLIGATIONS. These include:

-U.S. Government securities with remaining maturities of 397 days or less,

-Commercial paper rated in one of the two highest categories of any rating
agency,

-Asset-backed commercial paper whose own ratings or the rating of any guarantor
is in one of the two highest categories of any rating agency,

-Short-term bank obligations rated in one of the two highest categories by any
rating agency (with respect to obligations maturing in one year or less),

-Repurchase agreements relating to debt obligations that the Fund could purchase
directly, and

-Unrated debt obligations with remaining maturities of one year or less that are
determined by the adviser to be of comparable quality to the securities
described above.

Generally, money market obligations will not increase in value, but they are
high-quality investments that offer a fixed rate of return, as well as
liquidity.

FLOATING- AND VARIABLE-RATE SECURITIES. The Fund may invest in floating- and
variable-rate securities. These are securities that do not have fixed interest
rates; the rates change periodically. The interest rate on floating-rate
securities varies with changes to another index (such as the Treasury bill
rate), but the interest rate on variable-rate bonds changes at preset times,
based upon some underlying index. Some of the floating- or variable-rate
securities will be callable by the issuer, which means they can be paid off
before their maturity date.

These securities are subject to credit and interest-rate risk like other debt
securities, but because they are callable, they are also subject to the risk
that the Fund will be repaid prior to the stated maturity, and the principal
reinvested in a lower interest-rate market that reduces the Fund's income. The
Fund will only purchase floating- and variable-rate securities of the same
quality as the debt securities it would otherwise purchase.

REPURCHASE AGREEMENTS. When entering into repurchase agreements, the Fund
essentially makes a short-term loan to a qualified bank or broker-dealer. The
Fund buys securities that the seller has agreed to buy back at a specific time
and at a set price that includes interest. There is a risk that the seller will
be unable to buy back the securities at the time required and the Fund could
experience delays in recovering the amounts owed to it.

ASSET-BACKED COMMERCIAL PAPER. The Money Market Fund may invest in asset-backed
commercial paper that is secured by a pool of assets such as installment-loan
contracts, leases of various types of property, and receivables from credit
cards. Asset-backed commercial paper is issued and supported by private issuers,
and is subject to interest rate risk and credit risk.

PRINCIPAL INVESTMENT RISKS

The Money Market Fund is a low-risk investment compared to most other
investments. Given its objective -- to preserve capital, generate income and
maintain liquidity -- the Fund invests in low-risk, high-quality securities. No
investment, however, is free of all risk. Any time an investor buys commercial
paper or similar obligations, there is credit risk and interest rate risk.

NON-PRINCIPAL RISK

LIQUIDITY RISK. Liquidity risk is the risk that a security cannot be sold, or
cannot be sold quickly, at an acceptable price. To the extent the Fund invests
in illiquid securities such as extendable commercial notes (whose maturity may
be extended to up to 390 days at the option of the issuer), it is subject to
this risk. The Fund will limit this risk by investing primarily in relatively
short-term, high-quality securities.

25
<PAGE> 75

MANAGEMENT

INVESTMENT ADVISER

Villanova Mutual Fund Capital Trust (VMF), 1200 River Road, Conshohocken,
Pennsylvania 19428, manages the investment of the Fund's assets and supervises
the daily business affairs of the Funds. VMF was organized in 1999 and advises
mutual funds. As of December 31, 2000, VMF and its affiliates had approximately
$ billion in assets under management.

Each Fund, other than the Morley Enhanced Income Fund, pays VMF a management fee
which is based on the Fund's average daily net assets. The total management fees
paid by such Funds for the fiscal year ended October 31, 2000, expressed as a
percentage of a Fund's average daily net assets and not taking into account any
applicable waivers, were as follows:

<TABLE>
<S> <C>
Nationwide High Yield Bond Fund %
............................................................
Nationwide Bond Fund %
............................................................
Nationwide Tax-Free Income Fund %
............................................................
Nationwide Government Bond Fund %
............................................................
Money Market Fund %
</TABLE>

PORTFOLIO MANAGER

HIGH YIELD BOND FUND

Curtiss Barrows has managed the High Yield Bond Fund since its commencement of
operations. He serves as Senior Vice President and Chief Investment
Officer -- High Yield at VMP, which he joined in December 1999. Prior to that,
he was Senior Vice President at Morgan Grenfell, Inc. (Deutsche Asset
Management), and a portfolio manager of the Morgan Grenfell High Yield Bond Fund
from March 1998 to December 1999. Before March 1998, he was a Vice President of
Phoenix Duff & Phelps and the portfolio manager of the Phoenix High Yield Fund.
He has 15 years experience managing high yield investments.

BOND FUND

Douglas Kitchen has managed the Nationwide Bond Fund and its predecessor since
March 1997. From 1992 to March 11, 1997, he managed the Bond Portfolio for the
Nationwide Foundation.

TAX-FREE INCOME FUND

Alpha Benson, Director of Municipal Securities, joined Nationwide Insurance in
1977 as a financial analyst. Ms. Benson has managed the Nationwide Tax-Free
Income Fund and its predecessor from its inception in March 1986, and managed
the Financial Horizons Investment Trust (FHIT) Municipal Bond Fund from March
1997 to May 1998.

GOVERNMENT BOND FUND

Gary Hunt joined VMF in 1992 as a securities analyst. Mr. Hunt has been
co-manager of the Government Bond Fund, and its predecessor Funds, since March
1997. Since May 1999, Mr. Hunt has had primary responsibility for the Government
Bond Fund. He also manages the Nationwide NSAT Government Bond Fund.

MONEY MARKET FUND

Patricia Mynster, Director of Securities Investments, has managed the Nationwide
Money Market Fund and its predecessor since July 1997, and has managed
short-term investments for the Nationwide Insurance Enterprise since 1991.

INVESTMENT ADVISER

Union Bond & Trust Company (UBT), 5665 S.W. Meadows Road, Lake Oswego, OR 97035,
manages the investment of the assets and supervises the daily business affairs
of the Morley Enhanced Income Fund. UBT is a state bank and trust company
chartered in 1913 and reorganized in 1992 under the laws of the state of Oregon.
UBT provides a range of investment and fiduciary services to institutional
clients. UBT maintains and manages common and pooled trust funds invested
primarily in fixed income assets whose principal value is believed to be
relatively stable. As of December 31, 2000, UBT and its affiliates have
approximately $ billion in assets under management.

The Nationwide Morley Enhanced Income Fund pays UBT a management fee which is
based on the Fund's average daily net assets. The total management fees paid by
the Fund for the fiscal year ended October 31, 2000, expressed as a percentage
of the Fund's average daily net assets and not taking into account any
applicable waivers, was 0.35%.

PORTFOLIO MANAGER

NATIONWIDE MORLEY ENHANCED INCOME FUND

Mr. Thomas F. Mitchell, Senior Portfolio Manager of UBT, joined the firm in
1999. He has served as portfolio manager of the Fund since December, 1999 when
the Fund began operations. Mr. Mitchell also currently manages the Morley
Capital Accumulation Fund, and has done so since February 1999 when that fund
began operations. Mr. Mitchell has over twenty-two years' experience with
taxable and tax-exempt

26
<PAGE> 76

securities. From 1978 to 1996, he managed investment portfolios for commercial
bank affiliates of First Interstate Bancorp. In 1997 and 1998, following First
Interstate's merger with Wells Fargo & Co., he was a fixed income trader with
Wells Fargo's Institutional Securities Sales and Trading Division.

Perpetua M. Phillips has recently been named co-manager of the Fund. She joined
UBT in 1999. Ms. Phillips has twelve years of experience in finance and
investments, including management of indexed and total return portfolios.

HISTORICAL PERFORMANCE OF THE PORTFOLIO MANAGER

As described above, Mr. Barrows previously managed two other mutual funds with
investment objectives and strategies that are substantially similar, but not
necessarily identical, to the High Yield Bond Fund. Such other mutual funds are
the Phoenix-Goodwin High-Yield Fund and Morgan Grenfell High Yield Bond Fund
(the "Prior Funds"). He managed the Phoenix-Goodwin High-Yield Fund until March
13, 1998. He managed the Morgan Grenfell High Yield Bond Fund individually from
March 16, 1998 through March 1999 when a co-portfolio manager was added to such
Fund. Performance for the Prior Funds was the following, during which period Mr.
Barrows managed the Prior Funds alone. This performance reflects changes in the
share prices and reinvestment of dividends and distributions, and is net of all
fees and expenses.

PHOENIX-GOODWIN HIGH-YIELD FUND

<TABLE>
<CAPTION>
ANNUALIZED FIRST BOSTON
TOTAL RETURN HIGH YIELD INDEX
<S> <C> <C>
1 year ending December 31,
1997 13.61% 12.63%
5 years ending December 31,
1997 11.88% 11.84%
10 years ending December 31,
1997 11.02% 11.88%
</TABLE>

MORGAN GRENFELL HIGH YIELD BOND FUND

<TABLE>
<S> <C> <C>
1 year ending March 31, 1999 3.31% (0.75)%
</TABLE>

Included for comparison are performance figures of the First Boston High Yield
Index, an unmanaged index that measures the performance of fixed income
securities similar, but not identical, to those in the High Yield Bond Fund's
portfolio.

We have included performance information about the Prior Funds for comparison
purposes, BUT THESE OTHER MUTUAL FUNDS ARE SEPARATE AND DISTINCT FROM THE FUND.
THEIR PERFORMANCE DOES NOT GUARANTEE SIMILAR RESULTS FOR THE FUND AND SHOULD NOT
BE VIEWED AS A SUBSTITUTE FOR THE FUND'S OWN PERFORMANCE.

The performance of the Prior Funds when managed by Mr. Barrows may not be
comparable to the performance of the Fund because of the following differences:

- brokerage commissions and dealer spreads

- expenses (including management fees)

- the size of the investment in a particular security in relation to the
portfolio size

- the timing of purchases and sales (including the affect of market conditions
at that time)

- the timing of cash flows into the portfolio

- the availability of cash flows into the portfolio

Average annual total return represents the average change over a specified
period of time in the value of an investment after reinvesting all income and
capital gains distributions. The Fund believes that the performance information
noted above is reliable, but the Fund has not independently verified it.

27
<PAGE> 77

BUYING, SELLING AND EXCHANGING FUND SHARES

CHOOSING A SHARE CLASS

As noted in the Fund Summaries, each Fund offers different share classes to give
investors different price and cost options. The Prime Shares of the Money Market
Fund and Class A, Class B and Class C shares of the other Funds are available to
all investors; Class D, Institutional Service Class, Service Class and
Institutional Class shares may be available to a limited group of investors
depending on which Fund you purchase.

The following sales charges will generally apply:

Front-end Sales Charge when you purchase:

Class A shares

Class C shares

Class D shares

Contingent Deferred Sales Charge (CDSC)*:

Class B shares if you sell your shares within six years of purchase

Class C shares if you sell your shares within one year of purchase

No Sales Charges on Institutional Service Class shares, Institutional Class
shares or Service Class shares

Sales charges are paid to the Funds' distributor, Villanova Distribution
Services, Inc. (the Distributor) which either retains them or pays them to a
selling representative.

If you want lower annual fund expenses, Class A shares (and Class D,
Institutional Class and Institutional Service Class shares if they are available
and you are eligible to purchase them) may be right for you, particularly if you
qualify for a reduction or waiver of sales charges. If you do not want to pay a
front-end sales charge, and you anticipate holding your shares for the long
term, Class B shares may be more appropriate. If you wish to pay a lower
up-front sales charge than you would for Class A shares and are uncertain as to
how long you may hold your shares, Class C shares may be right for you. The
Funds reserve the right to reject an order in excess of $ for Class B
shares and an order for Class B shares for Individual Retirement Accounts (IRA
accounts) for shareholders 70 1/2 years old and older.

WHEN CHOOSING A SHARE CLASS, CONSIDER THE FOLLOWING:

Reductions and waivers of the sales No reductions of the CDSC available, Like Class B shares, no reductions of
charge available but waivers available the CDSC are available, but waivers are
available
.............................................................................................................................

Lower expenses than Class B and Class C Higher distribution and service fees Higher distribution and service fees
shares mean higher dividends per share than Class A and Class D shares mean than Class A shares mean higher fund
higher fund expenses and lower expenses and lower dividends per share
dividends per share
.............................................................................................................................

Conversion features are not applicable After seven years, Class B shares Unlike Class B shares, Class C shares
convert into Class A shares, which do not automatically convert into
reduces your future fund expenses another class
.............................................................................................................................

No sales charge when shares are sold CDSC if shares are sold within six CDSC of 1% is applicable if shares are
back to the Fund* years: 5% in the first year, 4% in the sold in the first year after purchase
second, 3% in the third and fourth
years, 2% in the fifth, and 1% in the
sixth year
.............................................................................................................................
No maximum investment limit Maximum investment amount permitted $-- Maximum investment amount permitted $--
</TABLE>

---------------

* A CDSC of up to 1% may be charged on certain redemptions of Class A shares
purchased without a sales charge.

28
<PAGE> 78

For investors who are eligible to purchase Class D, Institutional Service Class
and Institutional Class shares, the purchase of such shares will be preferable
to purchasing Class A, Class B or Class C shares.

WHO CAN BUY INSTITUTIONAL SERVICE CLASS SHARES

- registered investment advisers investing on behalf of institutions and high
net-worth individuals where the adviser is compensated by the Fund for
services it provides

- life insurance separate accounts to fund the benefits of variable annuity
contracts issued to governmental entities as an investment option under their
deferred compensation plans as defined under Section 457 of the Internal
Revenue Code (the Code) or qualified plans adopted pursuant to Section 401(a)
of the Code.

WHO CAN BUY CLASS D SHARES

Class D shares are available for purchase by the following:

- Persons eligible to purchase Class D shares without a sales charge as
described below or in the SAI

WHO CAN BUY INSTITUTIONAL CLASS SHARES

The Institutional Class shares are available for purchase only by the following:

- funds of funds offered by the Distributor or other affiliates of the Trust

- tax-exempt employee benefit plans if no third party administrator for the
plan receives compensation from the Funds

- institutional advisory accounts of VMF or its affiliates and those having
client relationships with an affiliate of VMF, or its affiliates and their
corporate sponsors, as well as subsidiaries and related employee benefit
plans and rollover individual retirement accounts from such institutional
advisory accounts

- a bank, trust company or similar financial institution investing for its own
account or for the account of its trust customers for whom such financial
institution is exercising investment discretion in purchasing Institutional
Class shares, where the investment is not part of a program that requires
payment to the financial institution of a Rule 12b-1 or administrative
service fee

- registered investment advisers investing on behalf of institutions and high
net-worth individuals entrusted to the adviser for investment purposes, if
the adviser is compensated for its services exclusively from its clients for
such advisory services

- High net worth individuals desiring to purchase shares of the Funds directly
through the Distributor provided they are able to satisfy the minimum
investment requirements described below.

Service Class shares of the Money Market Fund are currently sold only to
separate account of Nationwide Life Insurance Company and an omnibus account
held by Nationwide Trust Company. The address for these entities is One
Nationwide Plaza, Columbus, Ohio 43215.

29
<PAGE> 79

Buying, Selling and Exchanging Fund Shares

BUYING SHARES

MINIMUM INVESTMENTS --

CLASS A, B, C & PRIME SHARES

To open an account (per Fund) $1,000

......................................................

Through the Automatic Asset

Accumulation plan per
transaction $25

......................................................

Additional investments (per Fund) $100
MINIMUM INVESTMENTS -- CLASS D
To open an account (per Fund) $250

......................................................

Through the Automatic Asset

Accumulation plan per
transaction $25

......................................................

Additional investments $25

MINIMUM INVESTMENTS --

INSTITUTIONAL SERVICE CLASS AND
INSTITUTIONAL CLASS SHARES

To open an account $

......................................................

Additional investments $

--------------------------------------------------------------

The Funds do not calculate NAV on the following days:

- New Year's Day

- Martin Luther King, Jr. Day
- Presidents' Day
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
- Other days when the New York Stock Exchange is not open.

Each Fund reserves the right not to determine NAV when:

- It has not received any orders to purchase, sell or exchange shares.

- Changes in the value of that Fund's portfolio do not affect the NAV.

Wrap contracts utilized by the Nationwide Morley Enhanced Income Fund are valued
at fair value in accordance with procedures adopted by the Board of Trustees of
the Trust.

The Money Market Fund's securities are valued at amortized cost, which
approximates market value, in accordance with Rule 2a-7 of the Investment
Company Act of 1940.

IN-KIND PURCHASES. The Funds reserve the right to accept payment for shares in
the form of securities that are permissible investments for the Funds.

CLASS A, CLASS D AND CLASS C SALES CHARGES

The charts below show the applicable front-end sales. Class A and Class D shares
sales charges, which decrease as the amount of your investment increases.

CLASS A SHARES

<TABLE>
<CAPTION>
Sales charge
Sales charge as % of
as % of amount
Amount of purchase offering price invested
------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 4.50% 4.71%
..................................................................
$50,000 to $99,999 4.00 4.17
..................................................................
$100,000 to $249,999 3.00 3.09
..................................................................
$250,000 to $499,999 2.50 2.56
..................................................................
$500,000 to $999,999 2.00 2.04
..................................................................
$1 million to $24,999,999 0.50 0.50
..................................................................
$25 million or more 0.25 0.25
</TABLE>

30
<PAGE> 80

CLASS D SHARES

<TABLE>
<CAPTION>
Sales charge
Sales charge as % of
as % of amount
Amount of purchase offering price invested
------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 4.50% 4.71%
..................................................................
$50,000 to $99,999 4.00 4.17
..................................................................
$100,000 to $249,999 3.00 3.09
..................................................................
$250,000 to $499,999 2.50 2.56
..................................................................
$500,000 to $999,999 1.00 1.01
..................................................................
$1 million to $24,999,999 0.50 0.50
..................................................................
$25 million or more None None
</TABLE>

CLASS C SHARES

Sales of Class C shares will be charged a sales charge of 1.00% of the offering
price (1.01% of the amount invested).

CLASS A FINDERS' FEES

For certain sales of Class A shares at net asset value to employer sponsored
retirement plans (other than those investing in the Funds through a variable
insurance product), which are subject to a CDSC as described below, the Funds
will pay a finder's fee to the dealer at the time of purchase. For the dealer to
be eligible for the finder's fee, the following requirements apply:

- The purchase of shares must be made by one employer sponsored retirement
plan within a twelve month period from the purchase of any Nationwide Mutual
Funds (Nationwide Funds) Class A shares.

- The purchase can be made in any combination of Nationwide Funds.

If these conditions are met, a finder's fee will be paid on the purchase at the
following rates:

- 1.00% for sales of the Nationwide Funds of $1 million and more but less than
$3 million.

- 0.50% for sales of the Nationwide Funds of $3 million and more but less than
$50 million.

- 0.25% for sales of the Nationwide Funds of $50 million or more.

REDUCTION AND WAIVER OF CLASS A AND CLASS D SALES CHARGES

Shareholders can reduce or eliminate Class A and Class D shares' initial sales
charge through one or more of the discounts described below:

- An increase in the amount of your investment. The above tables show how the
sales charge decreases as the amount of your investment increases.

- Lifetime Additional Discount. You can add the value of any of the Nationwide
Funds' Class A and Class D shares you already own (except the Nationwide
Money Market Fund) with the value of the shares you are purchasing, which
may reduce the applicable sales charge.

31
<PAGE> 81

Buying, Selling and Exchanging Fund Shares

Your Letter of Intent is not a binding obligation to buy shares of the Fund;
it is merely a statement of intent. Call 1-800-848-0920 for more
information.

WAIVER OF CLASS A AND CLASS D SALES CHARGES

The Class A and Class D sales charges will be waived for the following
purchases:

(CLASS A SHARES ONLY)

- Any person purchasing through an account with an unaffiliated brokerage firm
that has an agreement with the Distributor to waive sales charges for those
persons. (Class A shares only)

- Any person who pays for the shares with the proceeds of a sale of
non-Nationwide mutual fund shares. To qualify, you must have paid an initial
sales charge or CDSC on the shares sold. You must purchase the Class A
shares within 60 days of the sale, and you must request the waiver when you
purchase the Class A shares (may require evidence that you qualify for this
waiver). (Class A shares only)

- Trustees and retired Trustees of Nationwide Mutual Funds (including its
predecessor or Trusts). (both Class A and Class D shares for those funds
which have Class D Shares)

- Directors, officers, full-time employees, sales representatives and their
employees, and retired directors, officers, employees, and sales
representatives, their spouses, children or immediate relatives (including
mother, father, brothers, sisters, grandparents and grand-children) and
immediate relatives of deceased employees of any member of the Nationwide
Insurance and Nationwide Financial companies, or any investment advisory
clients of VMF, VSA and their affiliates. (both Class A and Class D shares
for those funds which have Class D Shares)

- Directors, officers, full-time employees, their spouses, children or
immediate relatives and immediate relatives of deceased employees of any
sponsor group which may be affiliated with the Nationwide Insurance and
Nationwide Financial companies from time to time (including, but not limited
to, Farmland Insurance Industries, Inc., Maryland Farm Bureau, Inc., Ohio
Farm Bureau Federation, Inc., Pennsylvania Farmers' Association, Ruralite
Services, Inc., and Southern States Cooperative). (both Class A and Class D
shares for those funds which have Class D Shares)

Additional investors eligible for sales charge waivers may be found in the SAI.

CONVERSION OF CLASS B SHARES

HOW TO PLACE YOUR PURCHASE ORDER

If you wish to purchase Class A, Class B, Class C or Class D shares, you may
purchase them using one of the methods described below. When you buy shares, be
sure to specify the class of shares. If you don't choose a class, your
investment will be made in Class A shares (Prime Shares for the Money Market
Fund). Eligible entities wishing to purchase Institutional Service Class or
Institutional Class shares should contact Customer Service at 1-800-848-0920 for
more information regarding such purchases.

32
<PAGE> 82

ADDITIONAL SHAREHOLDER SERVICES

Shareholders are entitled to a wide variety of services by contacting:

NATIONWIDE FUNDS NOW 1-800-637-0012

Our customized voice-response system, available 24 hours a day, seven days a
week

CUSTOMER SERVICE 1-800-848-0920

For additional information on buying shares and shareholder services, call the
Customer Service or contact your sales representative.

SELLING SHARES

You can sell or, in other words, redeem your shares of the Funds at any time,
subject to certain restrictions described below. The price you will receive when
you sell your shares will be the NAV (less any applicable sales charges) next
determined after a Fund receives your
properly completed order to sell in its
offices in Columbus, Ohio. Of course, the
value of the shares you sell may be worth
more or less than their original purchase price depending upon the market value
of a Fund's investments at the time of the sale.

Properly completed orders contain all necessary
paperwork to authorize and complete the transaction.
The Funds may require all account holder signatures,
updated account registration and bank account
information and, depending on circumstances, a
signature guarantee.

If you request to sell shares in an amount exceeding $250,000 or 1% of the net
asset value of any Fund, under extraordinary circumstances the Fund may elect to
honor your request by transferring some of the securities held by the Fund
directly to you. For more information about a Fund's ability to make such a
redemption in kind, see the SAI.

RESTRICTIONS ON SALES

You may not be able to sell your shares of a Fund or a Fund may delay paying you
the proceeds from a sale when the New York Stock Exchange is closed (other than
customary

33
<PAGE> 83

Buying, Selling and Exchanging Fund Shares

weekend and holiday closings) or if trading is restricted or if an emergency
exists.

SIGNATURE GUARANTEE

A signature guarantee is required under the following circumstances:

- if a redemption is over $100,000.

- if your account registration has changed within the last 10 business days.

- if the redemption check is made payable to anyone other than the registered
shareholder.

- if the proceeds are sent to a bank account not previously designated or
changed within the past 10 business days.

- if the proceeds are mailed to an address other than the address of record.

The Funds reserve the right to require a signature guarantee in other
circumstances, without notice.

CONTINGENT DEFERRED SALES CHARGE (CDSC) ON CLASS A, CLASS B AND CLASS C SHARES

All purchases during the month are grouped together and will be treated as if
made on the last day of the preceding month.

Under certain circumstances, employer-sponsored retirement plans investing in
Class A shares without a sales charge and for which a finders' fee has been paid
(other than those investing in the Funds through variable insurance products)
may be charged a CDSC if shares are redeemed within three years after purchase.
The CDSC will be 1% for the first year, 0.50% for the second year and 0.25% for
the third year.

With respect to Class C shares, you must pay a CDSC of 1% if you sell your
shares within the first year after you purchased the shares.

We do not impose a CDSC on Class A, Class B or Class C shares purchased through
reinvested dividends and distributions. If you sell your Class B or Class C
shares and reinvest the proceeds in Class B or Class C shares within 30 days,
the Funds will deposit an amount equal to any CDSC on Class B or Class C shares
you paid into your account. We will also waive the CDSC on Class B or Class C if
you sell shares following the death or disability of a shareholder, provided the
sale occurs within one year of the shareholder's death or a determination of
disability, and for mandatory withdrawals from IRA accounts after age 70 1/2
years. For more information, see the SAI.

HOW TO PLACE YOUR SALE ORDER

You can request the sale of your Class A, Class B, Class C or Class D shares in
any of the ways described below. A signature guarantee may be required under
certain circumstances. Please refer to the section entitled "Signature
guarantee". Eligible entities wishing to sell Service, Institutional Service
Class or Institutional Class shares should contact the Distributor at
1-800-848-0920 for information regarding such sales.

THROUGH OUR CUSTOMER SERVICE LINE. Unless you declined the telephone redemption
privilege on your application, you can call and request that a check payable to
the shareholder of record be mailed to the address of record. You can sell

34
<PAGE> 84

shares of your IRA by telephone if we receive the proper forms. The distribution
from an IRA will be subject to a mandatory 10% federal withholding tax, unless
you inform us in writing not to withhold taxes. For additional information or to
request the forms, please call the customer service line at 1-800-848-0920. The
Funds will use procedures to confirm that telephone instructions are genuine. If
a Fund acts on instructions it reasonably believed were genuine, it will not be
liable for any loss, injury, damage or expense that occurs as a result, and the
Fund will be held harmless for any loss, claims or liability arising from its
compliance with the instructions. The Funds may record telephone instructions to
sell shares. The Funds reserve the right to revoke this privilege at any time,
without notice to shareholders, and to request the sale in writing, signed by
all shareholders on the account.

BY BANK WIRE. The Funds can wire the funds directly to your account at a
commercial bank (a voided check must be attached to your application), unless
you declined telephone privileges on your application. (This authorization will
remain in effect until you give the appropriate Funds written notice of its
termination.) Your proceeds will be wired to your bank on the next business day
after your order to sell shares has been processed. We will deduct a $20 fee
from the proceeds of your sale for this service. Your financial institution may
also charge you a fee for receiving the wire. Funds sent outside the U.S. may be
subject to a higher fee.

BY AUTOMATED CLEARING HOUSE (ACH). Your funds can be sent to your bank via ACH
on the second business day after your order to sell has been received by the
appropriate Funds. Funds sent through ACH should reach your bank in two business
days. There is no fee for this service. (This authorization will remain in
effect until you give the appropriate Funds written notice of its termination.)

BY MAIL OR FAX. Write a letter to Nationwide Mutual Funds, P.O. Box 1492,
Columbus, Ohio 43216-1492 or fax it to 614-428-3278. Please be sure your letter
is signed by all account owners. Be sure to include your account number and the
Fund from which you wish to make a redemption. For a distribution from an IRA,
you must include your date of birth and indicate whether or not you want the
Fund to withhold federal income tax from your proceeds. Your sale of shares will
be processed on the date the Fund receives your signed letter or fax. If your
fax is received after 4 p.m. Eastern Time, it will be processed the next
business day. The Funds reserve the right to require the original document if
you fax your letter.

BY MONEY MARKET FUND CHECK WRITING. Shareholders of Prime Shares of the Money
Market Fund receive free check-writing privileges ($500 minimum). If you wish to
withdraw your money this way, please complete the appropriate section of the
application. There is no fee for this service, but the Fund reserves the right
to charge for it or to terminate this service in the future. If you acquired
your Money Market Fund shares through an exchange, the shares may be subject to
a sales charge as described in "Exchanging Shares."

THROUGH AN AUTHORIZED BROKER. The Distributor has relationships with certain
brokers and other financial intermediaries who are authorized to accept, or
designate intermediaries to accept, purchase and redemption orders for the
Funds. If you have an account with such a broker, your redemption order will be
priced at the NAV next determined after your order has been accepted by your
broker or its designated intermediary. Your broker or financial intermediary may
charge fee for this services.

ON-LINE. Log on to our website www.nationwidefunds.com 24 hours a day, seven
days a week, for easy access to your mutual fund accounts. Once you have reached
the website, you will be instructed on how to select a password and perform
transactions. You can receive information on all of our funds by downloading a
prospectus or using other methods as well as information concerning your own
personal accounts on-line. You may also perform transactions, such as purchases,
redemptions and exchanges. The Funds may terminate the ability to sell Fund
shares on this website at any time, in which case you may continue to sell
shares by mail, telephone or through an authorized broker as described in this
Prospectus.

ACCOUNTS WITH LOW BALANCES

If the value of your Money Market Fund account falls below a daily average of
$250 for any month, you will be charged a $2 monthly fee, which is deposited
into the Fund to offset

35
<PAGE> 85

Buying, Selling and Exchanging Fund Shares

the expenses of small accounts. We will sell shares from your account in the
first week of the following month to cover the fee.

For additional information on selling your shares, call our Customer Service
line at 1-800-848-0920 or contact your sales representative.

DISTRIBUTION PLAN

In addition to the sales charges which you may pay for Class A, Class B, Class C
and Services Class shares the Trust has adopted a Distribution Plan under Rule
12b-1 of the Investment Company Act of 1940, which permits Class A and Class B
shares of the Funds to compensate the Distributor for expenses associated with
distributing such shares and providing shareholder services.

DISTRIBUTION AND SERVICE FEES

Under the Distribution Plan, Class A, Class B and Class C shares of the Funds
(and Service Class Shares of the Money Market Fund) pay the Distributor
compensation which is accrued daily and paid monthly. Each Fund shall pay
amounts not exceeding an annual amount of:

<TABLE>
<CAPTION>
FUND/CLASS AS A % OF DAILY NET ASSETS
----------------------------------------------------------------
<S> <C>
Class A shares 0.25% (distribution or service fee)
................................................................
Class B shares 0.85% (0.10% service fee)
................................................................
Class C shares 0.85% (0.10% service fee)
................................................................
Service Class (Money Market
Fund) 0.15% (distribution or service fee)
</TABLE>

Class D, Institutional Service Class, Institutional Class shares and Prime
Shares of the Money Market Fund pay no 12b-1 fees.

EXCHANGING SHARES

You can exchange the shares you own for shares of another Fund within Nationwide
Funds (except the Nationwide Morley Capital
Accumulation Fund) as long as they are
the same class of shares, both accounts
have the same owner, and your first
purchase in the new fund meets the fund's
minimum investment requirement. For
example, you can exchange Class A shares
of any one of the Funds for Class A
shares of any other fund within the Nationwide Funds, but you cannot exchange
Class A shares for Class B, Class C or Class D shares.

Generally, there is no sales charge for exchanges of Class B, Class C, Class D,
Institutional Service Class or Institutional Class shares. However, if your
exchange involves certain Class A shares, you may have to pay the difference
between the sales charges if a higher sales charge applies to the Fund into
which you are exchanging. If you exchange Prime Shares of the Money Market Fund
into another fund, you must pay the applicable sales charge, unless it has
already been paid prior to an exchange into the Money Market Fund. If you
exchange Class B or Class C shares for Prime Shares of the Money Market Fund,
the time you hold the shares in the Money Market Fund will not be counted for
purposes of calculating any CDSC. If you then sell your Prime Shares of the
Money Market Fund, you will pay the sales charge that would have been charged if
the shares had been sold at the time they were originally exchanged into the
Money Market Fund. If you exchange your Prime Shares of the Money Market Fund
back into Class B or Class C shares, the time you held Class B or Class C shares
prior to the exchange will be counted for purposes of calculating the CDSC.

HOW TO PLACE YOUR EXCHANGE ORDER

36
<PAGE> 86

exchange will be processed on the date the Fund receives your signed letter or
fax. If your fax is received after 4 p.m. Eastern Time, it will be processed the
next day. If you fax your request, we reserve the right to ask for the original.
You can automatically request an exchange 24 hours a day, seven days a week, by
calling Nationwide Funds NOW, our automated voice-response system, or by logging
on to our website at www.nationwidefunds.com. You will have automatic exchange
privileges unless you decline this option on your application. The Trust
reserves the right to amend or discontinue these exchange privileges upon 60
days' written notice to shareholders.

EXCESSIVE EXCHANGE ACTIVITY

37
<PAGE> 87

DISTRIBUTIONS AND TAXES
DISTRIBUTIONS AND TAXES

DISTRIBUTIONS OF INCOME DIVIDENDS

The Funds declare dividends daily and distribute them monthly. Income dividends
are taxable to you as ordinary income for federal income tax purposes, unless
you hold your shares in a qualified tax-deferred plan or account, or are
otherwise not subject to federal income tax. The amount of income dividends
distributed to you will be reported in a Form 1099, which we will send to you
during the tax season each year (unless you hold your shares in a qualified tax-
deferred plan or account or are otherwise not subject to federal income tax).
For corporate shareholders, a portion of each year's distributions may be
eligible for the corporate dividend-received deduction.

TAX-FREE INCOME FUND

Generally, income from the Tax-Free Income Fund will be exempt from federal
income taxes, although it is possible that a small portion could be taxable. Any
taxable distributions will be reported in a Form 1099. Although the
distributions may be exempt from federal income taxes, they may be subject to
state and local taxes. Please be aware that income that is exempt from federal
income taxes may be considered in addition to taxable income for purposes of
determining whether Social Security payments received by a shareholder are
subject to federal income taxes. Certain income not subject to the normal
federal income tax may be subject to the federal alternative minimum tax. To
determine whether a tax-free fund is right for you, please speak with your tax
adviser.

DISTRIBUTIONS OF CAPITAL GAINS

REINVESTING DISTRIBUTIONS

All income and capital gains distributions will be reinvested in shares of the
applicable Fund. You may request a payment in cash in writing if distributions
are in excess of $5. You may be subject to tax on reinvested distributions. If
distribution checks (1) are returned and marked as "undeliverable" or (2) remain
uncashed for six months, your account
will be changed automatically so that
all future distributions are reinvested
in your account. Checks that remain uncashed for six months will be cancelled
and the money reinvested in a Fund as of the cancellation date. No interest is
paid during the time the check is outstanding.

CHANGING YOUR DISTRIBUTION OPTION
If you want to change your distribution option, you must notify us by the record
date for a dividend or distribution in order for it to be effective for that
dividend or distribution.

STATE AND LOCAL TAXES

Distributions may be subject to state and local taxes, even if not subject to
federal income taxes. State and local tax laws vary; please consult your tax
adviser.

SELLING FUND SHARES

Selling Fund shares for more than you paid for them gives you a capital gain,
which is subject to federal income tax. The amount of the tax depends on how
long you held your shares. For individuals, long-term capital gains are
currently taxed at a maximum rate of 20%; and short-term capital gains are taxed
as ordinary income, such as interest or dividends. Capital gains from your sale
of Fund shares is not reported on Form 1099; you or your tax adviser should keep
track of your purchases, sales, and any resulting gain or loss. If you do sell
Fund shares for a loss, you may be able to use this capital loss to offset any
capital gains you may have.

EXCHANGING FUND SHARES

Exchanging your shares of a Fund for another Fund within the Nationwide Funds is
considered a sale for income tax purposes. Therefore, if the shares you exchange
are worth more than you paid for them, you may have capital gains, which are
subject to the federal income taxes described above. If you exchange Fund shares
for a loss, you may be able to use this capital loss to offset any capital gains
you may have.

38
<PAGE> 88

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand the Funds'
financial performance for the past 5 years or, if the Fund has not been in
operation for the past five years, for the life of the Fund. Certain information
reflects financial results for a single Fund share. The total returns in the
tables represent the rate that an investor would have earned [or lost] on an
investment in the Fund (assuming reinvestment of all dividends and distributions
and no sales charges). This information has been audited by KPMG LLP, whose
report, along with the Funds' financial statements, are included in the Trust's
annual reports, which are available upon request. For the Bond, Government Bond
and Tax-Free Funds for 1996, 1997 and 1998, information is for one Class D share
outstanding through the periods ended October 31, which includes information for
these Funds and their respective predecessors (prior to May 11, 1998, shares of
these Funds' predecessors were without class designation). The tables for each
of these Funds also include information for the Class A and Class B shares for
the period from May 11, 1998 to October 31, 1998 and for the years ended October
31, 1999 and October 31, 2000. For the Money Market Fund for 1996, 1997, 1998
and 1999, information is for one share outstanding through the years ended
October 31, which includes information for the Fund and its predecessor, as of
January 4, 1999, the original shares of the Money Market Fund were renamed Prime
Shares, and a new Class of shares of the Money Market Fund (Service Class
Shares) was added.

<TABLE>
<CAPTION>
NATIONWIDE HIGH YIELD BOND FUND
-----------------------------------
PERIOD ENDED OCTOBER 31, 2000
-----------------------------------
INSTITUTIONAL
CLASS A CLASS B SERVICE CLASS
------- ------- -------------
<S> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD
Income from investment operations
Net investment income (loss)
Net realized gain and unrealized appreciation
------- ------- ----------
Total from investment operations
------- ------- ----------
Less distributions
Dividends from net investment income
Distributions from net realized gain from investment
transactions
------- ------- ----------
Total distributions
Net increase (decrease) in net asset value

NET ASSET VALUE -- END OF PERIOD
======= ======= ==========
Total return (excluding sales charges)
Ratios and supplemental data
Net assets at end of period (000's)
Expenses to average net assets
Net investment income (loss) to average net assets
Portfolio turnover (b)
</TABLE>

---------------

(a) Annualized.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

39
<PAGE> 89

Financial Highlights

<TABLE>
<CAPTION>
BOND FUND
------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, PERIOD ENDED OCTOBER 31, 1998 YEAR ENDED OCTOBER 31, 1999
---------------------- ------------------------------ ------------------------------
1996 1997 CLASS D CLASS A CLASS B CLASS D CLASS A CLASS B
--------- --------- -------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ 9.50 $ 9.34 $ 9.49 $ 9.52 $ 9.52 $ 9.76 $ 9.75 $ 9.75
Income from investment operations
Net investment income 0.61 0.60 0.57 0.26 0.23 0.55 0.53 0.47
Net realized gain (loss) and
unrealized appreciation
(depreciation) (0.15) 0.15 0.27 0.23 0.23 (0.67) (0.68) (0.67)
-------- -------- -------- ------ ------ -------- ------ ------
Total from investment operations 0.46 0.75 0.84 0.49 0.46 (0.12) (0.15) (0.20)
-------- -------- -------- ------ ------ -------- ------ ------
Less distributions
Dividends from net investment
income (0.62) (0.60) (0.57) (0.26) (0.23) (0.55) (0.53) (0.47)
-------- -------- -------- ------ ------ -------- ------ ------
Total distributions (0.62) (0.60) (0.57) (0.26) (0.23) (0.55) (0.53) (0.47)
Net increase (decrease) in net asset
value (0.16) 0.15 0.27 0.23 0.23 (0.67) (0.68) (0.67)

NET ASSET VALUE -- END OF PERIOD $ 9.34 $ 9.49 $ 9.76 $ 9.75 $ 9.75 $ 9.09 $ 9.07 $ 9.08
======== ======== ======== ====== ====== ======== ====== ======
Total return (excluding sales
charges) 5.05% 8.33% 9.11% 5.18% 4.85% (1.24)% (1.58)% (2.07)%
Ratios and supplemental data
Net assets at end of period (000's) $133,253 $124,404 $134,822 $1,365 $ 490 $125,451 $3,186 $1,662
Expenses to average net assets 0.70% 0.72% 0.78% 1.17%(a) 1.81%(a) 0.83% 1.08% 1.68%
Net investment income (loss) to
average net assets 6.60% 6.43% 5.93% 5.48%(a) 4.93%(a) 5.86% 5.67% 5.07%
Portfolio turnover(b) 38.95% 70.63% 70.31% 70.31% 70.31% 64.26% 64.26% 64.26%

<CAPTION>
BOND FUND
------------------------------
YEAR ENDED OCTOBER 31, 2000
------------------------------
CLASS D CLASS A CLASS B
-------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ $ $
Income from investment operations
Net investment income
Net realized gain (loss) and
unrealized appreciation
(depreciation)
-------- ------ ------
Total from investment operations
-------- ------ ------
Less distributions
Dividends from net investment
income
-------- ------ ------
Total distributions
Net increase (decrease) in net asset
value
NET ASSET VALUE -- END OF PERIOD $ $ $
======== ====== ======
Total return (excluding sales
charges) % % %
Ratios and supplemental data
Net assets at end of period (000's) $ $ $
Expenses to average net assets % % %
Net investment income (loss) to
average net assets % % %
Portfolio turnover(b) % % %
</TABLE>

---------------

(a) Annualized.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.

40
<PAGE> 90

<TABLE>
<CAPTION>
TAX-FREE INCOME FUND
------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, PERIOD ENDED OCTOBER 31, 1998 YEAR ENDED OCTOBER 31, 1999
---------------------- ------------------------------ ------------------------------
1996 1997 CLASS D CLASS A CLASS B CLASS D CLASS A CLASS B
--------- --------- -------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ 10.22 $ 10.24 $ 10.51 $10.48 $10.48 $ 10.66 $10.65 $10.66
Income from investment operations
Net investment income 0.51 0.50 0.50 0.23 0.20 0.51 0.49 0.42
Net realized gain (loss) and
unrealized appreciation
(depreciation) 0.02 0.27 0.23 0.17 0.18 (0.84) (0.82) (0.83)
-------- -------- -------- ------ ------ -------- ------ ------
Total from investment operations 0.53 0.77 0.73 0.40 0.38 (0.33) (0.33) (0.41)
-------- -------- -------- ------ ------ -------- ------ ------
Less distributions
Dividends from net investment
income (0.51) (0.50) (0.50) (0.23) (0.20) (0.51) (0.49) (0.43)
Distributions from net realized
gain from investment transactions -- -- (0.08) -- -- (0.04) (0.04) (0.04)
-------- -------- -------- ------ ------ -------- ------ ------
Total distributions (0.51) (0.50) (0.58) (0.23) (0.20) (0.55) (0.53) (0.47)
Net increase (decrease) in net asset
value 0.02 0.27 0.15 0.17 0.18 (0.88) (0.86) (0.88)

NET ASSET VALUE -- END OF PERIOD $ 10.24 $ 10.51 $ 10.66 $10.65 $10.66 $ 9.78 $ 9.79 $ 9.78
======== ======== ======== ====== ====== ======== ====== ======
Total return (excluding sales
charges) 5.31% 7.72% 7.09% 3.86% 3.66% (3.21)% (3.26)% (4.02)%
Ratios and supplemental data
Net assets at end of period (000's) $264,642 $256,486 $263,662 $ 601 $1,477 $226,270 $2,383 $3,746
Expenses to average net assets 0.96% 0.96% 0.85% 1.06%(a) 1.66%(a) 0.71% 0.96% 1.56%
Expenses to average net assets* 1.11% 1.11% 0.93% -- -- -- -- --
Net investment income to average
net assets 4.98% 4.85% 4.73% 4.50%(a) 3.94%(a) 4.93% 4.73% 4.12%
Net investment income to average
net assets* 4.83% 4.70% 4.65% -- -- -- -- --
Portfolio turnover(b) 24.15% 39.49% 28.88% 28.88% 28.88% 42.26% 42.26% 42.26%

<CAPTION>
TAX-FREE INCOME FUND
------------------------------
YEAR ENDED OCTOBER 31, 2000
------------------------------
CLASS D CLASS A CLASS B
-------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ $ $
Income from investment operations
Net investment income
Net realized gain (loss) and
unrealized appreciation
(depreciation)
-------- ------ ------
Total from investment operations
-------- ------ ------
Less distributions
Dividends from net investment
income
Distributions from net realized
gain from investment transactions
-------- ------ ------
Total distributions
Net increase (decrease) in net asset
value
NET ASSET VALUE -- END OF PERIOD $ $ $
======== ====== ======
Total return (excluding sales
charges) % % %
Ratios and supplemental data
Net assets at end of period (000's) $ $ $
Expenses to average net assets % % %
Expenses to average net assets* % % %
Net investment income to average
net assets % % %
Net investment income to average
net assets* % % %
Portfolio turnover(b) % % %
</TABLE>

---------------

* Ratios calculated as if no expenses were waived or reimbursed.
(a) Annualized.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

41
<PAGE> 91

Financial Highlights

<TABLE>
<CAPTION>
NATIONWIDE GOVERNMENT BOND FUND (FORMERLY NATIONWIDE INTERMEDIATE U.S. GOVERNMENT BOND FUND)
---------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, PERIOD ENDED OCTOBER 31, 1998 YEAR ENDED OCTOBER 31, 1999
--------------------------- ------------------------------- ---------------------------
1995 1996 1997 CLASS D CLASS A CLASS B CLASS D CLASS A CLASS B
------- ------- ------- -------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ 9.22 $ 10.12 $ 10.04 $ 10.31 $10.24 $10.24 $ 10.57 $ 10.56 $10.55
Income from investment operations
Net investment income 0.59 0.59 0.59 0.56 0.26 0.23 0.53 0.51 0.45
Net realized gain (loss) and
unrealized appreciation
(depreciation) 0.89 (0.08) 0.27 0.34 0.32 0.31 (0.63) (0.62) (0.61)
------- ------- ------- ------- ------ ------ ------- ------- ------
Total from investment
operations 1.48 0.51 0.86 0.90 0.58 0.54 (0.10) (0.11) (0.16)
------- ------- ------- ------- ------ ------ ------- ------- ------
Less distributions
Dividends from net investment
income (0.58) (0.59)** (0.59) (0.56) (0.26) (0.23) (0.53) (0.51) (0.45)
Distributions from net realized
gain from investment
transactions -- -- -- (0.08) -- -- (0.05) (0.05) (0.05)
------- ------- ------- ------- ------ ------ ------- ------- ------
Total distributions (0.58) (0.59) (0.59) (0.64) (0.26) (0.23) (0.58) (0.56) (0.50)
Net increase (decrease) in net
asset value 0.90 (0.08) 0.27 0.26 0.32 0.31 (0.68) (0.67) (0.66)

NET ASSET VALUE -- END OF PERIOD $ 10.12 $ 10.04 $ 10.31 $ 10.57 $10.56 $10.55 $ 9.89 $ 9.89 $ 9.89
======= ======= ======= ======= ====== ====== ======= ======= ======
Total return (excluding sales
charges) 16.47% 5.28% 8.86% 9.03% 5.69% 5.29% (0.93)% (1.05)% (1.57)%
Ratios and supplemental data
Net assets at end of period
(000's) $39,777 $39,497 $41,328 $50,849 $ 332 $ 297 $52,260 $49,601 $1,148
Expenses to average net assets 1.08% 1.06% 1.07% 0.92% 1.04%(a) 1.64%(a) 0.79% 0.99% 1.64%
Expenses to average net assets* 1.23% 1.21% 1.22% 1.03% 1.17%(a) 1.86%(a) 0.81% 1.15% 1.65%
Net investment income (loss) to
average net assets 5.92% 5.86% 5.85% 5.43% 5.10%(a) 4.59%(a) 5.24% 5.13% 4.44%
Net investment income (loss) to
average net assets(*) 5.77% 5.71% 5.70% 5.32% 4.97%(a) 4.37%(a) 5.26% 5.29% 4.45%
Portfolio turnover(b) 25.40% 9.30% 26.58% 59.52% 59.52% 59.52% 51.86% 51.86% 51.86%

<CAPTION>
NATIONWIDE GOVERNMENT BOND FUND
(FORMERLY NATIONWIDE INTERMEDIATE
U.S. GOVERNMENT BOND FUND)
---------------------------------
YEAR ENDED OCTOBER 31, 2000
---------------------------
CLASS D CLASS A CLASS B
------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD
Income from investment operations
Net investment income
Net realized gain (loss) and
unrealized appreciation
(depreciation)
------- ------- ------
Total from investment
operations
------- ------- ------
Less distributions
Dividends from net investment
income
Distributions from net realized
gain from investment
transactions
------- ------- ------
Total distributions
Net increase (decrease) in net
asset value
NET ASSET VALUE -- END OF PERIOD
======= ======= ======
Total return (excluding sales
charges)
Ratios and supplemental data
Net assets at end of period
(000's)
Expenses to average net assets
Expenses to average net assets*
Net investment income (loss) to
average net assets
Net investment income (loss) to
average net assets(*)
Portfolio turnover(b)
</TABLE>

---------------

<TABLE>
<S> <C>
* Ratios calculated as if no expenses were waived or
reimbursed.
** Includes $(0.01) dividend in excess of net investment
income.
(a) Annualized.
(b) Portfolio turnover is calculated on the basis of the Fund as
a whole without distinguishing among the classes of shares.
</TABLE>

42
<PAGE> 92

<TABLE>
<CAPTION>
NATIONWIDE MORLEY ENHANCED INCOME FUND
(FORMERLY MORLEY ENHANCED INCOME FUND)
---------------------------------------------------------
PERIOD ENDED OCTOBER 31, 2000(a)
---------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS A SHARES CLASS B SHARES CLASS SHARES
-------------- -------------- ---------------------
<S> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD
Net investment income (loss)
Net realized gain (loss) and unrealized appreciation
(depreciation)
------- ------- -------
Total from investment operations
------- ------- -------
Dividends from net investment income
Total distributions
------- ------- -------
Net increase in net asset value
------- ------- -------
NET ASSET VALUE -- END OF PERIOD
======= ======= =======
Total Return (excluding sales charges)
Ratios and supplemental data:
Net Assets, end of period (000's)
Ratio of expenses to average net assets(b)
Ratio of expenses to average net assets(b)
Ratio of net investment income to average net assets(b)
Ratio of net investment income to average net assets(b)
Portfolio turnover(c)
</TABLE>

---------------

(a)Ratios calculated as if no fees were waived or expenses reimbursed.

(b)The Nationwide Morley Enhanced Income Fund commenced operations on December
30, 1999.

(c)Annualized.

(d)Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing among the classes of shares.

43
<PAGE> 93

Financial Highlights

<TABLE>
<CAPTION>
MONEY MARKET FUND
-----------------------------------------------------------------------------------------
SERVICE CLASS
YEAR ENDED OCTOBER 31, PRIME SHARES SHARES FOR PRIME SHARES(a)
-------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED
1996 1997 1998 OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 2000
-------- -------- ---------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE --
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations
Net investment income 0.05 0.05 0.05 0.05
-------- -------- ---------- ---------- ---------- ----------
Total from
investment
operations 0.05 0.05 0.05 0.05
-------- -------- ---------- ---------- ---------- ----------
Less distributions
Dividends from net
investment income (0.05) (0.05) (0.05) (0.05)
-------- -------- ---------- ---------- ---------- ----------
Total distributions (0.05) (0.05) (0.05) (0.05)

NET ASSET VALUE -- END
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ========== ========== ========== ==========
Total return 5.05% 5.07% 5.15% 4.61%
Ratios and supplemental
data
Net assets at end of
period (000's) $729,500 $820,657 $1,048,689 $1,345,342
Expenses to average
net assets 0.60% 0.59% 0.59% 0.61%
Expenses to average
net assets* 0.65% 0.64% 0.64% --
Net investment income
(loss) to average
net assets 4.93% 4.96% 4.96% 4.52%
Net investment income
(loss) to average
net assets* 4.88% 4.91% 4.91% --

SERVICE SHARES(a)
YEAR ENDED
OCTOBER 31, 2000
-----------------
<S> <C>
NET ASSET VALUE --
BEGINNING OF PERIOD
Income from investment
operations
Net investment income
----------
Total from
investment
operations
----------
Less distributions
Dividends from net
investment income
----------
Total distributions
NET ASSET VALUE -- END
OF PERIOD
==========
Total return
Ratios and supplemental
data
Net assets at end of
period (000's)
Expenses to average
net assets
Expenses to average
net assets*
Net investment income
(loss) to average
net assets
Net investment income
(loss) to average
net assets*
</TABLE>

---------------

<TABLE>
<S> <C>
* Ratios calculated as if no expenses were waived or
reimbursed.
(a) On January 4, 1999, the existing shares of the Nationwide
Money Market Fund were renamed Prime Shares and a new class
(Service Class Shares) were added.
</TABLE>

44
<PAGE> 94

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 95

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 96

INFORMATION FROM NATIONWIDE

- Statement of Additional Information (incorporated by reference in this
Prospectus)

- Annual Reports (which contain discussions of the market conditions and
investment strategies that significantly affected each Funds' performance)

- Semi-Annual Reports (as available)

FOR ADDITIONAL INFORMATION CONTACT:

Nationwide Family of Funds

P.O. Box 1492
Columbus, Ohio 43216-1492

(614) 428-3278 (fax)

Nationwide Logo

FOR INFORMATION, ASSISTANCE AND WIRE ORDERS:

1-800-848-0920 (toll free, 8 a.m.- 5 p.m. Eastern Time (Monday through Friday,
except Thursday, when representatives are available between 9:30 a.m. and 5 p.m.
Eastern Time.))

FOR 24-HOUR ACCOUNT ACCESS:

1-800-637-0012 (toll free)
Also, visit the Nationwide Funds' website at
www.nationwidefunds.com.

INFORMATION FROM THE SECURITIES AND EXCHANGE COMMISSION (SEC)

You can obtain copies of Fund documents from the SEC
as follows:

IN PERSON:

Public Reference Room in Washington, D.C. (For their hours
of operation, call 1-202-942-8090.)

BY MAIL:

Securities and Exchange Commission
Public Reference Section
Washington, D.C. 20549-0102
(The SEC charges a fee to copy any documents.)

ON THE EDGAR DATABASE VIA THE INTERNET:

www.sec.gov

BY ELECTRONIC REQUEST:

[email protected]

INVESTMENT COMPANY ACT FILE NO. 811-08495

NATIONWIDE FAMILY OF FUNDS
PO BOX 1492
COLUMBUS, OHIO 43215-1492

PRSRT STD
US POSTAGE
PAID
CLEVELAND OH
PERMIT NO 2112

HS-409-N
<PAGE> 97

NATIONWIDE(R) FAMILY OF FUNDS

Prospectus

March 1, 2001

- Gartmore Global Technology and Communications Fund

- Gartmore Emerging Markets Fund

- Gartmore International Growth Fund

- Gartmore Global Leaders Fund

- Gartmore OTC Fund

- Gartmore International Small Cap Growth Fund

<PAGE> 98

TABLE OF CONTENTS

FUND SUMMARIES.............................................................. 2

Gartmore Global Technology and Communications
Fund.............. 3

Gartmore Emerging Markets
Fund.............. 6

Gartmore International Growth
Fund.............. 9

Gartmore Global Leaders
Fund.............. 12

Gartmore OTC
Fund.............. 15

Gartmore International Small Cap Growth
Fund.............. 18

MORE ABOUT THE FUNDS........................................................ 21

Principal Investments and
Techniques........ 21

Principal Investment
Risks............. 22

MANAGEMENT.................................................................. 24

Investment
Advisor........... 24

Portfolio
Manager........... 24

Subadviser........ 24

Portfolio Management
Teams............. 24

BUYING, SELLING AND EXCHANGING FUND SHARES.................................. 26

Choosing a Share
Class............. 26

Buying Shares..... 28

Selling Shares.... 31

Distribution
Plan.............. 33

Exchanging
Shares............ 33

DISTRIBUTIONS AND TAXES..................................................... 35

Distributions of Income
Dividends......... 35

Distributions of Capital
Gains............. 35

Reinvesting
Distributions..... 35

State and Local
Taxes............. 35

Selling Fund
Shares............ 35

Exchanging Fund
Shares............ 35

FINANCIAL HIGHLIGHTS........................................................ 36

ADDITIONAL INFORMATION................................................BACK COVER

1
<PAGE> 99

FUND SUMMARIES

A QUICK NOTE ABOUT SHARE CLASSES

Each Fund has four different share classes -- Class A, Class B, Class C and
Institutional Service Class. The Gartmore OTC and Gartmore International Small
Cap Growth Funds have a fifth share class -- the Institutional Class. The fees,
sales charges and expenses for each share class are different, but each share
class of a particular Fund represents an investment in the same assets of that
Fund. Having different share classes simply lets you choose the cost structure
that's right for you.

2
<PAGE> 100

FUND SUMMARIES -- GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long term capital appreciation.

To achieve its objective, the Fund invests at least 65% of its total assets in
equity securities issued by U.S. and foreign companies with business operations
in technology and communications and/or technology and communications related
industries. These companies may include, for example, companies that develop,
produce and distribute products or services in the computer, semi-conductor,
electronics, communications, health care, and biotechnology sectors. A security
will generally be considered appropriate if (as determined by the investment
adviser) at least 50% of the issuer's assets, revenues, or net income is related
to, or derived from, the industry or industries designated for the Fund.

TECHNOLOGY is the use of science to create new products and services. The
industry comprises information technology and communications as well as medical,
environmental and biotechnology.

The Fund may invest in companies domiciled in any country and allocates its
assets among securities that are expected to provide the best opportunities for
meeting its investment objective. However, normally at least 65%, if not more,
of its total assets will be invested in companies in at least three different
countries, one of which may be the U.S. If the portfolio manager thinks that
advantageous investment opportunities exist in countries with emerging
securities markets, the Fund will invest in those countries.

The Fund may invest in companies of any size. The Fund may invest in securities
of large companies that are well established in the world technology market
because they can be expected to grow with the market. The Fund may also invest
in securities of small to mid-size companies to the extent that they provide
strong prospects for future growth.

In analyzing specific companies for possible investment, the Fund's portfolio
manager ordinarily looks for several of the following characteristics:

- Above-average per share earnings growth.

- High return on invested capital.

- A healthy balance sheet.

- Sound financial and accounting policies and overall financial strength.

- Strong competitive advantages.

- Effective research and product development and marketing.

- Development of new technologies.

- Efficient service.

- Pricing flexibility.

- Strong management.

- General operating characteristics that will enable the company to compete
successfully in its respective markets.

Villanova Mutual Fund Capital Trust (VMF), the Fund's investment adviser,
considers whether to sell a particular security when any of these factors
materially change.

The Fund may also lend portfolio securities on a short-term or long-term basis
up to 30% of its total assets. VMF expects a high portfolio turnover rate of
300% or more.

PRINCIPAL RISKS

STOCK MARKET RISK. Stock market risk is the risk that the Fund could lose value
if the individual stocks in which the Fund has invested or the overall stock
markets in which they trade go down. Individual stocks and the overall stock
market may experience short-term volatility as well as extended periods of
decline or little growth. Individual stocks are affected by factors such as
corporate earnings, production, management and sales. Individual stocks may also
be affected by the demand for a particular type of stock, such as growth stocks
or the stocks of companies with a particular market capitalization. Stock
markets are affected by numerous factors, including interest rates, the outlook
for corporate profits, the health of the national and world economies, national
and world social and political events, and the fluctuations of other stock
markets around the world.

3
<PAGE> 101

Fund Summaries -- Gartmore Global Technology and Communications Fund

SMALL CAP RISK. To the extent the Fund invests in securities of smaller
capitalization companies, it may be riskier than investments in larger, more
established companies. The stocks of smaller companies are usually less stable
in price and less liquid than the stocks of larger companies.

FOREIGN RISK. Investments in foreign securities involve special risks which are
not associated with domestic investments. These risks include political and
economic risks, currency fluctuations, higher transaction costs, and delayed
settlement. To the extent that the Fund invests in countries with emerging
markets, the foreign securities risks are magnified since these countries may
have unstable governments and less established markets.

SECTOR RISK. The Fund may be susceptible to factors affecting technology and
communications and technology-and communications-related industries and
therefore the value of the Fund's investments may be more volatile than other
funds that invest in a broader range of securities across different industries.

PORTFOLIO TURNOVER RISK. The Fund will attempt to buy securities with the intent
of holding them for investment, but the portfolio manager may engage in active
and frequent trading of securities if doing so is in the best interest of the
Fund. A higher portfolio turnover rate may result in higher transaction costs
for the Fund and increase the volatility of the Fund. In addition, a higher
portfolio turnover rate may cause a shareholder to have additional tax
consequences as a result of owning the Fund.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" beginning on page .

PERFORMANCE

No performance information is provided because the Fund did not begin operations
until June 30, 2000.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Fund.

<TABLE>
<CAPTION>
Institutional
Shareholder Fees(1) Service
(paid directly from your Class A Class B Class C Class
investment) shares shares shares shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge 5.75%(2) None 1.00% None
(Load) imposed upon
purchases (as a
percentage of offering
price)
.....................................................................
Maximum Deferred Sales None(3) 5.00%(4) 1.00%(5) None
Charge (Load) imposed on
redemptions (as a
percentage of original
purchase price or sale
proceeds, as applicable)
</TABLE>

<TABLE>
<CAPTION>
Institutional
Annual Fund Operating Service
Expenses (deducted from Class A Class B Class C Class
Fund assets) shares shares shares shares
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees(6) 0.98% 0.98% 0.98% 0.98%
....................................................................
Distribution and/or 0.25% 1.00% 1.00% None
Service (12b-1) Fees
....................................................................
Other Expenses(7) % % % %
--------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
....................................................................
Amount of Fee % % % %
Waiver/Expense
Reimbursement
--------------------------------------------------------------------
NET EXPENSES AFTER % % % %
WAIVERS(8)
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A sales
charges" on page .

4
<PAGE> 102

(3) A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6) The Fund commenced operations on June 30, 2000. As a result, the management
fee represents the fee that is payable to VMF under its contract with the
Fund.

(7)As a new fund these are estimates for the current fiscal year ending October
31, 2001. These estimates do not take into account the expense limitation
agreement between the Fund and VMF.

(8)VMF and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February 28,
2002. The Fund is authorized to reimburse VMF for management fees previously
waived and/or for the cost of Other Expenses paid by VMF provided that any
such reimbursement will not cause the Fund to exceed the expense limitations
noted above. The Fund's ability to reimburse VMF in this manner only applies
to fees paid or reimbursement made by VMF at some time within the first five
years from the time the Fund commenced operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the costs of this Fund with other mutual funds.

<TABLE>
<CAPTION>
1 year 3 years
------------------------------------------------------------
<S> <C> <C>
Class A Shares $ $
............................................................
Class B Shares $ $
............................................................
Class C Shares $ $
............................................................
Institutional Service Class Shares $ $
</TABLE>

You would pay the following expenses on the same investment if you did not sell
your shares(1):

<TABLE>
<CAPTION>
1 year 3 years
-----------------------------------------------------------
<S> <C> <C>
Class B Shares $ $
...........................................................
Class C Shares $ $
</TABLE>

---------------

(1)Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

5
<PAGE> 103

FUND SUMMARIES -- GARTMORE EMERGING MARKETS FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long term capital growth by investing primarily in equity
securities of companies located in emerging market countries.

Villanova Global Asset Management Trust (VGAMT), the Fund's investment adviser,
has chosen Gartmore Global Partners (Gartmore) as a subadviser to manage the
Fund's portfolio on a day-to-day basis. To achieve its objective, the Fund
normally invests at least 65% of its assets in companies located in emerging
markets or developing countries. The Fund intends to invest in securities of
companies in at least three of these countries at any one time. Gartmore selects
regions or countries and companies they believe have the potential to deliver
unexpected earnings growth.

The Fund invests primarily in common stocks, preferred stocks, convertible
securities, equity interests in foreign investment funds or trusts, and
depositary receipts.

EMERGING MARKET

Emerging market countries are countries that

- Have been defined as emerging market countries by the International Finance
Corporation.

- Have a low-to-middle income economy according to the World Bank.

- Are listed as developing countries in World Bank publications.

There are more than 25 countries that currently qualify as emerging market
countries, including Argentina, Brazil, Chile, China, the Czech Republic,
Columbia, Ecuador, Greece, Hong Kong, Indonesia, India, Malaysia, Mexico, the
Philippines, Poland, Portugal, Peru, Russia, Singapore, South Africa, Thailand,
Taiwan and Turkey. [Inset Box]

The Fund may invest in securities that are not part of its principal investment
strategies as described above, but it will not hold more than 10% of its assets
in any one type of these securities. See the Statement of Additional Information
for a discussion of these securities.

The Fund may also invest in foreign currency exchange contracts to convert
foreign currencies to and from U.S. dollar, and to hedge against changes in
foreign currency exchange rates.

Gartmore looks for emerging markets that are believed to have the potential for
strong economic growth, and tries to avoid emerging markets that it believes
might be politically or economically risky.

Gartmore is a growth stock adviser and its investment philosophy rests on two
fundamental principles:

-Growth investing can produce superior returns over the longer term, but
consensus growth (or the market's expectations for earnings forecasts) tends to
produce average returns. Therefore, Gartmore focuses on identifying companies
that it believes offer earnings growth that exceeds market expectations.

-Gartmore looks to sell companies where there is significant risk that earnings
growth will not meet market expectations.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by Gartmore's ability to assess economic conditions and
investment opportunities.

EMERGING MARKETS RISK. The Fund invests primarily in equity securities of
companies in emerging market countries, including securities denominated in
foreign currencies. Those investments involve special risks and are generally
riskier than domestic investments and other kinds of foreign investments,
particularly because emerging market countries may be less stable from a
political and economic standpoint than other countries. These risks include
political and economic risks, currency fluctuations, higher transaction costs,
and delayed settlement. It may also be more difficult to buy and sell securities
in emerging market countries. Foreign securities may also be less liquid and
harder to value than U.S. securities. In addition, the securities in which the
Fund invests are subject to significant changes in value due to exchange rate
fluctuations.

for corporate

6
<PAGE> 104

profits, the health of the national and world economies, national and world
social and political events, and the fluctuations of other stock markets around
the world.

RISK OF HOLDING A SMALLER NUMBER OF SECURITIES. Because the Fund typically holds
fewer securities than other stock funds, the price fluctuations of any security
will have a greater impact on the Fund. The Fund generally holds 80 to 100
stocks which are fewer than those held by other equity funds. Because of this
greater concentration, a single security's increase or decrease in value may
have a greater impact on the Fund's net asset value and total return.

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counter
parties to over-the-counter derivatives contracts present default risks if such
counterparties fail to fulfill its obligations. Derivatives can make the Fund
less liquid and harder to value, especially in declining markets. Also, the Fund
may suffer disproportionately heavy losses relative to the amount of its
investments in derivative contracts. Lastly, changes in the value of derivative
contracts or other hedging instruments may not match or fully offset changes on
the value of the hedged portfolio securities.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" beginning on page .

PERFORMANCE

No performance information is provided because the Fund did not begin operations
until September 1, 2000.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Emerging Markets Fund.

<TABLE>
Institutional
Shareholder Fees(1) Service
(paid directly from Class A Class B Class C Class
your investment) shares shares shares shares
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum Sales Charge 5.75%(2) None 1.00% None
(Load) imposed upon
purchases (as a
percentage of
offering price)
..................................................................
Maximum Deferred None(3) 5.00%(4) 1.00%(5) None
Sales Charge (Load)
imposed on
redemptions (as a
percentage of
original purchase
price or sale
proceeds, as
applicable)
</TABLE>

<TABLE>
Institutional
Annual Fund Operating Service
Expenses (deducted Class A Class B Class C Class
from Fund assets) shares shares shares shares
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees(6) 1.15% 1.15% 1.15% 1.15%
..................................................................
Distribution and/or 0.25% 1.00% 1.00% None
Service (12b-1) Fees
..................................................................
Other Expenses(7) % % % %
------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
..................................................................
Amount of Fee % % % %
Waiver/Expense
Reimbursement
------------------------------------------------------------------
NET FUND AFTER % % % %
WAIVERS(8)
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A sales
charges" on page .

7
<PAGE> 105

Fund Summaries -- Gartmore Emerging Markets Fund

(3) A CDSC of up to 1% may be imposed on certain redemptions of Class A shares
purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6) The Fund commenced operations on September 1, 2000. As a result, the
management fee represents the fee which is payable to VGAMT under its
contract with the Fund.

(7)As a new fund these are estimates for the current fiscal year ending October
31, 2001. These estimates do not take into account the expense limitation
agreement between the Fund and VGAMT.

(8) VGAMT and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February
28, 2002. The Fund is authorized to reimburse VGAMT for management fees
previously waived and/or for the cost of Other Expenses paid by VGAMT
provided that any such reimbursement will not cause the Fund to exceed the
expense limitations noted above. The Fund's ability to reimburse VGAMT in
this manner only applies to fees paid or reimbursement made by VGAMT at some
time within the first five years from the time the Fund commenced
operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the costs of this Fund with other mutual funds.

You would pay the following expenses on the same investment if you did not sell
your shares(1):

<TABLE>
<CAPTION>
1 year 3 years
------------------------------------------------------------
<S> <C> <C>
Class B Shares $ $
............................................................
Class C Shares $ $
</TABLE>

---------------

(1) Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

8
<PAGE> 106

FUND SUMMARIES -- GARTMORE INTERNATIONAL GROWTH FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long term capital growth by investing primarily in equity
securities of companies in Europe, Australia, the Far East and other regions,
including developing countries.

VGAMT, the Fund's investment adviser, has chosen Gartmore as a subadviser to
manage the Fund's portfolio on a day-to-day basis. To achieve its objective, the
Fund invests at least 65%, if not more, of its assets in established companies
located in at least three countries other than the United States. Gartmore
selects regions or countries, and companies it believes have the potential for
unexpected growth.

The Fund primarily invests in equity securities which may include common stocks,
preferred stocks, equity interests in foreign investment funds or trusts,
convertible securities, real estate investment trust securities and depositary
receipts.

The Fund may invest in foreign currency exchange contracts to convert foreign
currencies to and from the U.S. dollar, and to hedge against changes in foreign
currency exchange rates.

The Fund may also invest in securities that are not part of its principal
investment strategies as described above, but it will not hold more than 10% of
its assets in any one type of these securities. See the Statement of Additional
Information for a discussion of these securities.

Gartmore is a growth stock adviser and its investment philosophy rests on two
fundamental principles:

-Gartmore looks to sell companies where there is significant risk that earnings
growth will not meet market expectations.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by the Gartmore's ability to assess economic conditions and
investment opportunities.

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counter
parties to over-the-counter derivatives contracts present default risks if such
counterparties fail to fulfill their obligations. Derivatives can make the Fund
less liquid and harder to value, especially in declining markets. Also, the Fund
may suffer disproportionately heavy losses relative to the amount of its
investments in derivative contracts. Lastly, changes in the value of derivative
contracts or other hedging

9
<PAGE> 107

Fund Summaries -- Gartmore International Growth Fund

instruments may not match or fully offset changes on the value of the hedged
portfolio securities.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" beginning on page .

PERFORMANCE

No performance information is provided because the Fund did not begin operations
until September 1, 2000.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Fund.

TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
..................................................................
Amount of Fee % % % %
Waiver/Expense
Reimbursement
------------------------------------------------------------------
NET EXPENSES AFTER % % % %
WAIVERS(8)
</TABLE>

---------------

(1 )If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A sales
charges" on page .

(3) A CDSC of up to 1% may be imposed on certain redemptions of Class A shares
purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6) The Fund commenced operations on September 1, 2000. As a result, the
management fee represents the fee which is payable to VGAMT under its
contract with the Fund.

(7)As a new fund these are estimates for the current fiscal year ending October
31, 2001. These estimates do not take into account the expense limitation
agreement between the Fund and VGAMT.

(8) VGAMT and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February
28, 2002. The Fund is authorized to reimburse the adviser for management
fees previously waived and/or for the cost of Other Expenses paid by VGAMT
provided that any such reimbursement will not cause the Fund to exceed the
expense limitations noted above. The Fund's ability to reimburse VGAMT in
this manner only applies to fees paid or reimbursement made by VGAMT at some
time within the first five years from the time the Fund commenced
operations.

10
<PAGE> 108

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the costs of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
only one year. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1)Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

11
<PAGE> 109

FUND SUMMARIES -- GARTMORE GLOBAL LEADERS FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long term capital growth by investing primarily in equity
securities of global leaders. A global leader is defined as a company with a
strong and improving franchise that is well positioned to take advantage of
growth opportunities in its industry.

VGAMT, the Fund's investment adviser, has chosen Gartmore as a subadviser to
manage the Fund's portfolio on a day-to-day basis. To achieve its objective, the
Fund invests at least 65% of its assets in equity securities of companies from
at least three countries, including the U.S. The rationale for investing in
global leaders arises from the increasing globalization of many industries
coupled with the increasing importance of multinational strategies in leading
corporations. Global leaders may be domiciled anywhere globally while adopting
winning multinational strategies within their industries.

Gartmore adopts a sector approach and looks to identify those companies within
industries with a strong and improving competitive advantage in key growth
segments. The portfolio management team then identifies which of these companies
have earnings growth potential greater than that expected by the stock market.

The Fund primarily invests in equity securities which may include equity
interests in investment funds or trusts, convertible securities, common stocks,
preferred stocks, warrants, real estate investment trust securities and
depositary receipts.

The Fund may invest in foreign currency exchange contracts to convert foreign
currencies to and from the U.S. dollar, and to hedge against changes in foreign
currency exchange rates.

Gartmore is a growth stock adviser and its investment philosophy rests on two
fundamental principles:

-Gartmore looks to sell companies where there is significant risk that earnings
growth will not meet market expectations.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by Gartmore's ability to assess economic conditions and
investment opportunities.

STOCK MARKET RISK. Stock market risk is the risk that the Fund could lose value
if the individual stocks in which the Fund has invested or the overall stock
markets in which they trade go down. Individual stocks and the overall stock
market may experience short-term volatility as well as extended periods of
decline or little growth. Individual stocks are affected by factors such as
corporate earnings, production, management and sales. Individual stocks may also
be affected by the demand for a particular type of stock, such as growth stocks
or the stocks of companies with a particular market capitalization. Stock
markets are affected by numerous factors, including interest rates, the outlook
for corporate profits, the health of the national and world economies, national
and world social and political events, and the fluctuations of other stock
markets around the world.

12
<PAGE> 110

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counter
parties to over-the-counter derivatives contracts present default risks if such
counterparties fail to fulfill their obligations. Derivatives can make the Fund
less liquid and harder to value, especially in declining markets. Also, the Fund
may suffer disproportionately heavy losses relative to the amount of its
investments in derivative contracts. Lastly, changes in the value of derivative
contracts or other hedging instruments may not match or fully offset changes on
the value of the hedged portfolio securities.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" beginning on page .

PERFORMANCE

No performance information is provided because the Fund did not begin operations
until September 1, 2000.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Fund.

<TABLE>
<CAPTION>
Institutional
Annual Fund Operating Service
Expenses (deducted from Class A Class B Class C Class
Fund assets) shares shares shares shares
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Distribution and/or 0.25% 1.00% 1.00% None
Service (12b-1) Fees
....................................................................
Other Expenses(7) % % % %
--------------------------------------------------------------------
TOTAL ANNUAL FUND % % % %
OPERATING EXPENSES
....................................................................
Amount of Fee % % % %
Waiver/Expense
Reimbursement
--------------------------------------------------------------------
NET EXPENSES AFTER % % % %
WAIVERS(8)
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A sales
charges" on page .

(3) A CDSC of up to 1% may be imposed on certain redemptions of Class A shares
purchased without a sales charge.

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6) The Fund commenced operations on September 1, 2000. As a result, the
management fee represents the fee which is payable to VGAMT under its
contract with the Fund.

(7)As a new fund these are estimates for the current fiscal year ending October
31, 2001. These estimates do not take into account the expense limitation
agreement between the Fund and VGAMT.

13
<PAGE> 111

Fund Summaries -- Gartmore Global Leaders Fund

Expenses paid by VGAMT provided that any such reimbursement will not cause
the Fund to exceed the expense limitations noted above. The Fund's ability
to reimburse VGAMT in this manner only applies to fees paid or reimbursement
made by VGAMT at some time within the first five years from the time the
Fund commenced operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the costs of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
only one year. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
1 year 3 years
-------------------------------------------------------------
<S> <C> <C>
Class A Shares $ $
.............................................................
Class B Shares $ $
.............................................................
Class C Shares $ $
.............................................................
Institutional Service Class Shares $ $
</TABLE>

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1) Expenses paid on the same investment in Class A and Institutional Service
Class shares do not change whether or not you sell your shares.

14
<PAGE> 112

FUND SUMMARIES -- GARTMORE OTC FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long term capital growth by investing primarily in equity
securities of U.S. and foreign companies that are traded in over-the-counter
(OTC) markets.

VGAMT, the Fund's investment adviser, has chosen Gartmore as a subadviser to
manage the remainder of the Fund's portfolio. To achieve its objective, the Fund
invests at least 65%, if not more, of its total assets in equity securities of
U.S. and foreign companies that are traded in the OTC market. The Fund also
invests in U.S. and foreign emerging growth companies whose securities are
traded on a securities exchange. The Fund may also invest 25% or more of its
assets in companies in any one industry including technology and communications
related industries. Companies in the technology and communications related
industries may include, for example, companies that develop, produce and
distribute products or services in the computer, semi-conductor, electronic,
communications, health-care and bio-technology sectors. Regions or countries and
companies are selected that are believed to have the potential to exceed market
growth expectations.

The Fund invests primarily in equity securities which may include common stocks,
preferred stocks, equity interests in foreign investment funds or trusts,
convertible securities, and depositary receipts. The Fund will invest primarily
in OTC companies across the market spectrum and small and mid-sized emerging
growth companies.

The Fund may invest in foreign currency exchange contracts to convert foreign
currencies to and from the U.S. dollar, and to hedge against changes in foreign
currency exchange rates.

THE OTC MARKET

The OTC market is a network of telephone lines and a computerized quotation
system through which securities trades can be made. OTC securities are
securities which are principally traded on the OTC market; however, OTC
securities can also be listed for trading on a domestic or foreign exchange.
Currently the four OTC markets are the NASDAQ (U.S.), JASDAQ (Japan), EASDAQ
(Europe) and KOSDAQ (Korea).

EMERGING GROWTH COMPANIES Gartmore believes emerging growth companies are those
companies that have a strong franchise in a dynamic industry.

Gartmore is a growth stock adviser and its investment philosophy rests on two
fundamental principles:

-Gartmore looks to sell companies where there is significant risk that earnings
growth will not meet market expectations.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by Gartmore's ability to assess economic conditions and
investment opportunities.

OTC MARKET RISKS. Companies whose securities are traded in the OTC markets
generally have small market capitaliza-

15
<PAGE> 113

Fund Summaries -- Gartmore OTC Fund

tions or are newer companies than those listed on the NYSE or the American Stock
Exchange. OTC companies often have limited product lines, or relatively new
products or services, and may lack established markets, depth of experienced
management or financial resources. As a result, the securities of these
companies may have limited marketability and may be more volatile in price than
securities of larger capitalized or more well-known companies.

In addition to these general risks, the liquidity and trading patterns of
securities quoted on the EASDAQ, JASDAQ, or KOSDAQ markets may be substantially
different from those of securities quoted on the NASDAQ. These OTC markets are
relatively new quotation systems and only a small number of issuer's shares are
quoted on these exchanges. As a result, historical trading prices may not be
indicative of the prices at which securities listed on these exchanges will
trade in the future. In addition, these exchanges have relatively low trading
volumes for the stocks which they list. Hence, the price at which stocks will
trade on the EASDAQ, JASDAQ or KOSDAQ may be subject to significant price
fluctuations.

SMALL CAP RISK. The Fund's investments in the securities of smaller, newer
companies may be riskier than investments in larger, more established companies.
The stocks of smaller companies are usually less stable in price and less liquid
than the stocks of larger companies.

CONCENTRATION RISK. The Fund may invest 25% or more of its assets in companies
in any one industry. This ability to invest in a more concentrated range of
securities than other mutual fund, increases the risk and potential of the Fund.
With a concentrated portfolio of securities, it is possible that the Fund could
have returns that are significantly more volatile than broadbased market indices
and other more diversified mutual funds due to the market movement of the
particular industry or concentration.

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counter
parties to over-the-counter derivatives contracts present default risks if such
counterparties fail to fulfill their obligations. Derivatives can make the Fund
less liquid and harder to value, especially in declining markets. Also, the Fund
may suffer disproportionately heavy losses relative to the amount of its
investments in derivative contracts. Lastly, changes in the value of derivative
contracts or other hedging instruments may not match or fully offset changes on
the value of the hedged portfolio securities.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" beginning on page .

PERFORMANCE

No performance information is provided because the Fund did not commence
operations until on or about December 29, 2000.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Fund.

<TABLE>
<CAPTION>
Institutional
Shareholder Fees(1) Service Institutional
(paid directly from your Class A Class B Class C Class Class
investment) shares shares shares shares shares
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge 5.75%(2) None 1.00% None None
(Load) imposed upon
purchases (as a
percentage of offering
price)
.....................................................................................
Maximum Deferred Sales None(3) 5.00%(4) 1.00%(5) None None
Charge (Load) imposed on
redemptions (as a
percentage of original
purchase price or sale
proceeds, as applicable)
</TABLE>

16
<PAGE> 114

<TABLE>
<CAPTION>
Institutional
Annual Fund Operating Service Institutional
Expenses (deducted from Class A Class B Class C Class Class
Fund assets) shares shares shares shares shares
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Management Fees(6) 1.00% 1.00% 1.00% 1.00% 1.00%
....................................................................................
Distribution and/or 0.25% 1.00% 1.00% None None
Service (12b-1) Fees
....................................................................................
Other Expenses(7) % % % % %
------------------------------------------------------------------------------------
TOTAL ANNUAL FUND % % % % %
OPERATING EXPENSES
Amount of Fee Waiver/ % % % % %
Expense Reimbursement
------------------------------------------------------------------------------------
NET FUND AFTER % % % % %
WAIVERS(8)
</TABLE>

---------------

(1) If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a separate transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A sales
charges" on page .

(3) A CDSC of up to 1% may be imposed on certain redemptions of Class A shares
purchased without a sales charge. See "Buying, Selling and Exchanging Fund
Shares -- " Selling Shares -- Contingent Deferred Sales Charge (CDSC) on
Class A, Class B and Class C shares on page .

(4) A CDSC ranging from 5% to 1% is charged when you sell Class B shares within
the first six years of purchase. Class B shares are converted to Class A
shares after you have held them for seven years. See "Buying, Selling and
Exchanging Fund Shares -- Selling Shares -- Contingent deferred sales charge
(CDSC), on Class A, Class B and Class C shares" on page .

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6) The Fund commenced operations on December 29, 2000. As a result, the
management fee represents the fee which is payable to VGAMT under its
contract with the Fund.

(7) As a new fund these are estimates for the current fiscal year ending October
31, 2001. These estimates do not take into account the expense limitation
agreement between the Fund and VGAMT.

(8) VGAMT and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February
28, 2002. The Fund is authorized to reimburse VGAMT for management fees
previously waived and/or for the cost of "Other Expenses" paid by VGAMT
provided that any such reimbursement will not cause the Fund to exceed the
expense limitations noted above. The Fund's ability to reimburse VGAMT in
this manner only applies to fees paid or reimbursements made by VGAMT at
some time within the first five years from the time the Fund commenced
operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the costs of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
only one year. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1) Expenses paid on the same investment in Class A, Institutional Class and
Institutional Service Class shares do not change whether or not you sell
your shares.

17
<PAGE> 115

FUND SUMMARIES -- GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND

OBJECTIVE AND PRINCIPAL STRATEGIES

The Fund seeks long-term capital growth by investing primarily in equity
securities of small capitalization companies that are located outside of the
United States.

VGAMT, the Fund's investment adviser, has chosen Gartmore as a subadviser to
manage the Fund's portfolio on a day-to-day basis. To achieve its objective, the
Fund invests at least 65%, if not more, of its total assets in the equity
securities of small capitalization companies that are headquartered, domiciled
or have their principal business functions located outside the United States,
including such companies in Europe, Australasia and the Far East. The Fund may
make investments in any of the foreign countries across the globe and at minimum
will make investments in at least three countries other than the United States.
Gartmore selects regions or countries, and companies they believe have the
potential to exceed market growth expectations.

WHAT IS MARKET CAPITALIZATION?
Market capitalization is a common way to measure the size of a company based on
the price of its common stock; it's simply the number of outstanding shares of
the company multiplied by the current share price.

Gartmore generally considers a small capitalization company to be a company
whose market capitalization is similar to companies represented by the Morgan
Stanley Capital International (MSCI) Developed Countries EAFE Small Cap Index
(small cap companies). The MSCI Developed Countries EAFE Small Cap Index is an
index consisting of approximately 276 companies. As of December 31, 2000, the
market capitalizations for companies in the MSCI Developed Countries EAFE Small
Cap Index ranged from approximately $ million to $ billion. The market
capitalization range for companies in this index is updated annually.

The market capitalization of some companies in which the Fund invests may, after
purchase, grow so that their market capitalization is no longer in the range
represented by the MSCI Developed Countries EAFE Small Cap Index. Although the
Fund will not purchase any more of this stock unless the company's market
capitalization again falls in the Index's range, the Fund will consider this
stock to be small cap for purposes of its commitment to invest 65% of its assets
in securities of small cap companies.

The Fund may invest in foreign currency exchange contracts to convert foreign
currencies to and from the U.S. dollar, and to hedge against changes in foreign
currency exchange rates.

Gartmore is a growth stock adviser and its investment philosophy rests on two
fundamental principles:

- Growth investing can produce superior returns over the longer term, but
consensus growth (or the market's expectations for earnings forecasts) tends
to produce average returns. Therefore, Gartmore focuses on identifying
companies that it believes offer earnings growth that exceeds market
expectations.

- Gartmore looks to sell companies where there is significant risk that earnings
growth will not meet market expectations.

PRINCIPAL RISKS

Because the value of your investment in the Fund will fluctuate, there is the
risk that you will lose money. Your investment will decline in value if the
value of the Fund's investments decreases. The value of your shares will also be
impacted in part by Gartmore's ability to assess economic conditions and
investment opportunities.

18
<PAGE> 116

tion, management and sales. Individual stocks may also be affected by the demand
for a particular type of stock, such as growth stocks or the stocks of companies
with a particular market capitalization. Stock markets are affected by numerous
factors, including interest rates, the outlook for corporate profits, the health
of the national and world economies, national and world social and political
events, and the fluctuations of other stock markets around the world.

DERIVATIVES RISK. An investment in derivatives can have an impact on market,
currency and interest rate exposure. Using derivatives can disproportionately
increase losses and reduce opportunities for gains when security prices,
currency rates or interest rates are changing in unexpected ways. Counterparties
to the over-the-counter derivative contracts present the same types of default
risk as issuers of fixed income securities. Derivatives can make the Fund less
liquid and harder to value, especially in declining markets. Also, the Fund may
suffer disproportionately heavy losses relative to the amount of its investments
in derivative contracts. Lastly, changes in the value of derivative contracts or
other hedging instruments may not match or fully offset changes on the value of
the hedged portfolio securities.

For more detailed information about the Fund's investments and risks, see "More
About the Funds" beginning on page .

PERFORMANCE

No performance information is provided because the Fund did not begin operations
until on or about December 29, 2000.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay when buying and
holding shares of the Fund.

<TABLE>
Institutional
Shareholder Fees(1) Service Institutional
(paid directly from Class A Class B Class C Class Class
your investment) shares shares shares shares Shares
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge 5.75%(2) None 1.00% None None
(Load) imposed upon
purchases (as a
percentage of
offering price)
.................................................................................
Maximum Deferred None(3) 5.00%(4) 1.00%(5) None None
Sales Charge (Load)
imposed on
redemptions (as a
percentage of
original purchase
price or sale
proceeds, as
applicable)
</TABLE>

<TABLE>
Annual Fund Institutional
Operating Expenses Service Institutional
(deducted from Fund Class A Class B Class C Class Class
assets) shares shares shares shares shares
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Management Fees(6) 1.10% 1.10% 1.10% 1.10% 1.10%
.................................................................................
Distribution and/or 0.25% 1.00% 1.00% None None
Service (12b-1) Fees
.................................................................................
Other Expenses(7) % % % % %
---------------------------------------------------------------------------------
TOTAL ANNUAL FUND % % % % %
OPERATING EXPENSES

Amount of Fee % % % % %
Waiver/ Expense
Reimbursement
---------------------------------------------------------------------------------
NET EXPENSES AFTER 1.85% 2.45% 2.45% 1.52% 1.37%
WAIVERS(8)
</TABLE>

---------------

(1 )If you buy and sell shares through a broker or other financial intermediary,
they may also charge you a transaction fee.

(2) As the amount of your investment increases, the sales charge imposed on the
purchase of Class A shares decreases. For more information, see "Buying,
Selling and Exchanging Fund Shares -- Buying Shares -- Class A sales
charges" on page .

(3) A contingent deferred sales charge (CDSC) of up to 1% may be imposed on
certain redemptions of Class A shares purchased without a sales charge. See
"Buying, Selling and Exchanging Fund Shares -- Selling Shares -- CDSC or
Class A, Class B and Class C shares" on page .

19
<PAGE> 117

Fund Summaries -- Gartmore International Small Cap Growth Fund

(5)A CDSC of 1% is charged when you sell Class C shares within the first year
after purchase.

(6) The Fund commenced operations on December 29, 2000. As a result, the
management fee represents the fee which is payable to VGAMT under its
contract with the Fund.

(7) As a new fund these are estimates for the current fiscal year ending October
31, 2001. These estimates do not take into account the expense limitation
agreement between the Fund and VGAMT.

(8) VGAMT and the Fund have entered into a written contract limiting operating
expenses to those listed in "Net Expenses After Waivers" through February
28, 2002. The Fund is authorized to reimburse VGAMT for management fees
previously waived and/or for the cost of "Other Expenses" paid by VGAMT
provided that any such reimbursement will not cause the Fund exceed the
expense limitations noted above. The Fund's ability to reimburse VGAMT in
this manner only applies to fees paid or reimbursements made by VGAMT at
some time within the first five years from the time the Fund commenced
operations.

EXAMPLE

This example shows what you could pay in expenses over time. You can also use
this example to compare the costs of this Fund with other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then sell all of your shares at the end of those periods. It
assumes a 5% return each year, no changes in expenses and expense waivers for
only one year. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

You would pay the following expenses on the same investment if you did not sell
your shares(1):

---------------

(1)Expenses paid on the same investment in Class A, Institutional Class and
Institutional Service Class shares do not change whether or not you sell your
shares.

20
<PAGE> 118

MORE ABOUT THE FUNDS

PRINCIPAL INVESTMENTS AND TECHNIQUES

The Funds may use the following additional principal investments and techniques
described below to increase returns, protect assets or diversify investments. As
with any mutual fund, there can be no guarantee that a Fund will meet its goals
or that its performance will be positive for any period of time.

PREFERRED STOCK. (EMERGING MARKETS, INTERNATIONAL GROWTH, GLOBAL LEADERS, OTC,
INTERNATIONAL SMALL CAP GROWTH) Holders of preferred stocks normally have the
right to receive dividends at a fixed rate but do not participate in other
amounts available for distribution by the issuer. Dividends on preferred stock
may be cumulative, and cumulative dividends must be paid before common
shareholders receive any dividends. Because preferred stock dividends usually
must be paid before common stock dividends, preferred stocks generally entail
less risk than common stocks. Upon liquidation, preferred stocks are entitled to
a specified liquidation preference, which is generally the same as the par or
stated value, and are senior in right of payment to common stock. Preferred
stocks do not represent a liability of the issuer and, therefore, do not offer
as great a degree of protection of capital or assurance of continued income as
investments in corporate debt securities. In addition, preferred stocks are
subordinated in right of payment to all debt obligations and creditors of the
issuer, and convertible securities may be subordinated to other preferred stock
of the same issuer.

CONVERTIBLE SECURITIES. (EMERGING MARKETS, INTERNATIONAL GROWTH, GLOBAL LEADERS,
OTC, INTERNATIONAL SMALL CAP GROWTH) Convertible securities -- also known as
convertibles -- include bonds, debentures, notes, preferred stocks, and other
securities. Convertibles are a hybrid security that have characteristics of both
bonds and stocks. Like bonds, they pay interest. Because they can be converted
into common stock within a set period of time, at a specified price or formula,
convertibles also offer the chance for capital appreciation, like common stocks.

Convertibles tend to be more stable in price than the underlying common stock,
although price changes in the underlying common stock can affect the
convertible's market value. For example, as an underlying common stock loses
value, convertibles present less opportunity for capital appreciation, and may
also lose value. Convertibles, however, may sustain their value better than the
common stock because they pay income, which tends to be higher than common stock
dividend yields.

WARRANTS. (GLOBAL LEADERS) A warrant is a security that gives the holder of the
warrant the right to buy common stock at a specified price for a specified
period of time. Warrants are considered speculative and have no value if they
are not exercised before their expiration date.

DERIVATIVES. (EMERGING MARKETS, INTERNATIONAL GROWTH, GLOBAL LEADERS, OTC,
INTERNATIONAL SMALL CAP GROWTH) A derivative is a contract whose value is based
on the performance of an underlying financial asset, index or other investment.
For example, an option is a derivative because its value changes in relation to
the performance of an underlying stock. The value of an option on a futures
contract varies with the value of the underlying futures contract, which in turn
varies with the value of the underlying commodity or security. Derivatives are
available based on the performance of assets, interest rates, currency exchange
rates, and various domestic foreign indexes. Derivatives afford leverage and can
also be used in hedging portfolios.

REITS. (INTERNATIONAL GROWTH, GLOBAL LEADERS) A Fund may invest in real estate
investment trusts (REITs). REITs are pooled investment vehicles which invest
primarily in income producing real estate or real estate related loans or
interests. REITs are generally classified as equity REITs, mortgage REITs or
hybrid REITs. Equity REITs invest the majority of

21
<PAGE> 119

More About the Funds

their assets directly in real property and derive income primarily from the
collection of rents. Equity REITs can also realize capital gains by selling
properties that have appreciated in value. Mortgage REITs invest the majority of
their assets in real estate mortgages and derive income from the collection of
interest payments. Hybrid REITs combine the investment strategies of Equity
REITs and Mortgage REITs.

REITs involve certain risks that are associated with direct ownership of real
estate and with the real estate industry in general. These risks include, among
others, possible declines in the value of real estate, possible lack of
availability of mortgage funds, and extended vacancies of properties.

DEPOSITARY RECEIPTS. (ALL FUNDS) A Fund may invest indirectly in securities of
foreign issuers through sponsored or unsponsored American Depositary Receipts
(ADRs), Global Depositary Receipts (GDRs) and International Depositary Receipts
(IDRs) (collectively, depositary receipts). Depositary receipts may not
necessarily be denominated in the same currency as the underlying securities
into which they may be converted. In addition, the issuers of the stock of
unsponsored depositary receipts are not obligated to disclose material
information in the United States and, therefore, there may not be a correlation
between such information and the market value of the depositary receipts. ADRs
are typically issued by a U.S. bank or trust company and evidence ownership of
underlying securities issued by a foreign corporation. GDRs, IDRs, and other
types of depositary receipts are typically issued by foreign banks or trust
companies and evidence ownership of underlying securities issued by either a
foreign or United States corporation. Depositary receipts which are not
denominated in U.S. dollars will be subject to foreign currency exchange rate
risks. Certain depositary receipts may not be listed on an exchange and
therefore may be considered illiquid securities.

PRINCIPAL INVESTMENT RISKS

FOREIGN RISK. (ALL FUNDS) Foreign security investing involves special risks not
presented by U.S. investing that can increase the chances that a Fund will lose
money.

- COUNTRY. General securities market movements in any country in which a
Fund has investments are likely to affect the value of a Fund's securities
that trade in that country. These movements will affect a Fund's share
price and a Fund's performance. The political, economic and social
structures of some countries in which a Fund invests may be less stable and
more volatile than those in the U.S. The risk of investing in these
countries include the possibility of the imposition of exchange controls,
currency devaluation, foreign ownership limitations, expropriation,
restrictions on removal of currency or other assets, nationalization of
assets, punitive taxes and certain custody and settlement risks.

- FOREIGN MARKETS. Because there are generally fewer investors in foreign
markets and a smaller number of securities traded each day, it may make it
difficult for a Fund to buy and sell certain securities. In addition,
prices of foreign securities may go up and down more than prices of
securities traded in the U.S. Also, brokerage commissions and other costs
of buying and selling securities often are higher in foreign countries than
they are in the U.S. This reduces the amount a Fund can earn on its
investments.

- GOVERNMENTAL SUPERVISION AND REGULATION/ACCOUNTING STANDARDS. Foreign
companies are not subject to the same disclosure, accounting, auditing and
financial reporting standards and practices as U.S. companies. A Fund may
have greater difficulty voting proxies, exercising shareholder rights,
pursuing legal remedies and obtaining judgments with respect to foreign
investments in foreign courts than with respect to U.S. companies in U.S.
courts. Many foreign governments supervise and regulate stock exchanges,
brokers and the sale of securities less than the U.S. does. Other countries
may not have laws to protect investors the way that the U.S. securities
laws do. Accounting standards in other countries are not necessarily the
same as in the U.S. If the accounting standards in another country do not
require as much detail as U.S. accounting standards, it may be harder for a
Fund's portfolio manager to completely and accurately determine a company's
financial condition.

22
<PAGE> 120

SMALL CAP RISK. (GLOBAL TECHNOLOGY AND COMMUNICATIONS, OTC, INTERNATIONAL SMALL
CAP GROWTH) Historically, the securities of small companies have been more
volatile in price than larger company securities, especially over the short
term. Among the reasons for the greater price volatility are the less certain
growth prospects of small companies, the lower degree of liquidity in the
markets for such securities, the greater impact caused by changes in investor
perception of value, and the greater sensitivity of small cap companies to
changing economic conditions. In addition, small cap companies may:

- Lack depth of management.

- Lack a proven track record.

- Be unable to generate funds necessary for growth or development.

- Be developing or marketing new products or services for which markets are
not yet established and may never become established.

- Market products or services which may become quickly obsolete.

Certain small cap companies in which the Fund invests may be in the technology
related and biotechnology industries. Small cap companies in these industries
may be subject to more abrupt or erratic price movements than small cap stocks
in other industries. Therefore, while small cap companies may offer greater
opportunities for capital growth than larger, more established companies, they
also involve greater risks and should be considered speculative.

TEMPORARY DEFENSIVE POSITIONS

In response to economic, political or unusual market conditions, each Fund may
invest up to 100% of its assets in cash or money market obligations. Should this
occur, a Fund may not meet its investment objectives and may miss potential
market upswings.

23
<PAGE> 121

MANAGEMENT

INVESTMENT ADVISER --
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND

Villanova Mutual Fund Capital Trust (VMF), 1200 River Road, Conshohocken, PA
19428, manages the investment of the assets and supervises the daily business
affairs of the Gartmore Global Technology and Communications Fund. VMF was
organized in 1999, and advises mutual funds. As of December 31, 2000, VMF and
its affiliates had approximately $ billion in assets under management.

The Fund pays VMF a management fee, which is based on the Fund's average daily
net assets.

<TABLE>
<CAPTION>
Fund Fee
-----------------------------------------------------
<S> <C>
Global Technology and Communications Fund 0.98%
</TABLE>

PORTFOLIO MANAGER --
GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND

Aaron Harris is the portfolio manager for the Global Technology and
Communications Fund. Prior to joining VMF in April 2000, Mr. Harris was
portfolio manager for the Nicholas Applegate Capital Management, managing
several portfolios for Nicholas-Applegate Capital Management.

INVESTMENT ADVISER --

GARTMORE EMERGING MARKETS FUND

GARTMORE INTERNATIONAL GROWTH FUND

GARTMORE GLOBAL LEADERS FUND

GARTMORE OTC FUND

GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND

Villanova Global Asset Management Trust (VGAMT), 1200 River Road, Conshohocken,
Pennsylvania 19428, manages the investment of the assets and supervises the
daily business affairs of each of the Funds. VGAMT was organized in July 2000,
and advises mutual funds and other institutional separate accounts.

Each Fund pays VGAMT a management fee, which is based on the Funds' average
daily net assets.

<TABLE>
<CAPTION>
Fund Fee
-----------------------------------------------------
<S> <C>
Gartmore Emerging Markets 1.15%
.....................................................
Gartmore International Growth 1.00%
.....................................................
Gartmore Global Leaders 1.00%
.....................................................
Gartmore OTC Fund 1.00%
.....................................................
Gartmore International Small Cap Growth Fund 1.10%
</TABLE>

SUBADVISER

Gartmore Global Partners (Gartmore), 121 W. Trade Street, Suite 3030, Charlotte,
NC is the subadvisor to the Funds. Subject to the supervision of VGAMT and the
Trustees, Gartmore will manage each Fund's assets in accordance with the Fund's
investment objective and strategies. Gartmore makes investment decisions for
each Fund and, in connection with such investment decisions, places purchase and
sell orders for securities.

Gartmore is a global asset manager dedicated to serving the needs of U.S. based
investors. Gartmore was formed in 1995 as a registered investment adviser and
manages more than $1 billion in assets.

Gartmore takes a team approach to portfolio construction, allowing investors to
benefit from the skills of all the members of the team, not just one investment
manager.

PORTFOLIO MANAGEMENT TEAM --
GARTMORE EMERGING MARKETS FUND

Christopher Palmer and Philip Ehrmann of the Pacific and Emerging Markets Equity
Team are the portfolio managers for the Gartmore Emerging Markets Fund. In that
capacity, they are responsible for the day-to-day management of the Fund,
including the selection of the Fund's investments.

Mr. Palmer joined Gartmore as an investment manager on the Pacific and Emerging
Markets Equity Team in 1995. In 1999, he became responsible for managing U.S.
portfolios for Gartmore.

Mr. Ehrmann joined Gartmore as Head of the Emerging Markets Equity team in 1995.
Phillip has also managed U.S. portfolios for Gartmore since 1995.

24
<PAGE> 122

PORTFOLIO MANAGEMENT TEAM --
GARTMORE INTERNATIONAL GROWTH FUND

Stephen Watson, leader of the International Equities Team, is primarily
responsible for the investment management of the Gartmore International Growth
Fund.

Mr. Watson joined Gartmore in 1993 as a global fund manager. He is currently the
Chief Investment Officer for Gartmore and a member of Gartmore's Global Policy
Group.

PORTFOLIO MANAGEMENT TEAM --
GARTMORE GLOBAL LEADERS FUND

Gary Smith, Brian O'Neill and Neil Rogan, Gartmore's global specialists, are
responsible for managing the Gartmore Global Leaders Fund.

Gary Smith joined Gartmore as Head of the Investment Risk Consultancy Team in
1990. He provides full quantitative research support for Gartmore's active
investment managers. He also advises clients in the area of long-term strategy
and issues related to benchmarks and risk controls. Mr. Smith became responsible
for managing U.S. portfolios for Gartmore in 2000.

Brian O'Neill joined Gartmore in 1981 and became responsible for managing U.S.
portfolios for Gartmore in 1997.

Neil Rogan joined Gartmore as Head of the Asia Pacific Team in September of
1997. In 2000, he became responsible for managing U.S. portfolios for Gartmore
and is currently the Head of the International Equities Team. Prior to joining
Gartmore, Mr. Rogan served as a Director and senior fund manager for Jardine
Fleming Investment Management in Hong Kong from 1992 to 1997.

PORTFOLIO MANAGEMENT TEAM --
GARTMORE OTC FUND

Nicholas Ford of Gartmore's U.S. Equity Team manages the Gartmore OTC Fund with
support from day-to-day management of the Fund, including the selection of the
Fund's investments. Mr. Ford joined Gartmore as an investment manager on the
Gartmore U.S. Equities Team in 1998. Mr. Ford served as an investment manager
for Clerical Medical in London from November 1996 to December 1997 and also as
an investment manager for Sun Alliance from 1995 to 1996.

PORTFOLIO MANAGEMENT TEAM --
GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND

Gartmore's International Small Cap Specialists are responsible for the
Investment management of the Gartmore International Small Cap Growth Fund.

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BUYING, SELLING AND EXCHANGING FUND SHARES

CHOOSING A SHARE CLASS

As noted in the Fund Summaries, each Fund offers different share classes to give
investors different price and cost options. Class A, Class B and Class C shares
of the Funds are available to all investors; Institutional Service Class and
Institutional Class shares are available to a limited group of investors.

The following sales charges will generally apply:

Front-end Sales Charge when you purchase:

Class A shares

Class C shares

Contingent Deferred Sales Charge (CDSC)*:

Class B shares if you sell your shares within six years of purchase

Class C shares if you sell your shares within one year of purchase

No Sales Charges on Institutional Class or Institutional Service Class shares

Sales charges are paid to the Funds' distributor, Villanova Distribution
Services, Inc. (the Distributor) which either retains them or pays them to a
selling representative.

Class A, Class B and Class C shares each pay distribution and/or service fees
under a Distribution Plan. These fees are retained by the Distributor or paid by
the Distributor to brokers for distribution and shareholder services.

Class A and Institutional Service Class shares may also pay administrative
service fees. These fees are paid to brokers and other entities who provide
administrative support services to the beneficial owners of Class A and
Institutional Service Class shares.

If you want lower annual fund expenses, Class A shares may be right for you,
particularly if you qualify for a reduction or waiver of sales charges. If you
do not want to pay an up-front-end sales charge, and you anticipate holding your
shares for the long term, Class B shares may be more appropriate. If you wish to
pay a lower up-from sales charge than you would for Class A share and are
uncertain as to how long you may hold your shares, Class C shares may be right
for you. The Funds reserve the right to reject an order in excess of $
for Class B shares and an order for Class B shares for Individual Retirement
Accounts (IRA accounts) for shareholders 70 1/2 years old and older.

WHEN CHOOSING A SHARE CLASS, CONSIDER THE FOLLOWING:

<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Front-end sales charge means that a No front-end sales charge, so your Front-end sales charge means that a
portion of your initial investment full investment immediately goes portion of your initial investment
goes toward the sales charge, and is toward buying shares goes toward the sales charge and is
not invested not invested. Front-end sales charge
on Class C is lower than Class A
......................................................................................................................
Reductions and waivers of the sales No reductions of the CDSC available, Like Class B shares, no reductions of
charge available but waivers available the CDSC are available, but waivers
are available
......................................................................................................................
Lower expenses than Class B and Class Higher distribution and service fees Higher distribution and service fees
C shares mean higher dividends per than Class A shares mean higher fund than Class A shares mean higher fund
share expenses and lower dividends per share expenses and lower dividends per share
......................................................................................................................
Conversion features are not applicable After seven years, Class B shares Unlike Class B shares, Class C shares
convert into Class A shares, which do not automatically convert into
reduces your future fund expenses another class
......................................................................................................................
No sales charge when shares are sold CDSC if shares are sold within six CDSC of 1% is applicable if shares are
back to the Fund* years: 5% in the first year, 4% in the sold in the first year after purchase
second, 3% in the third and fourth
years, 2% in the fifth, and 1% in the
sixth year
......................................................................................................................
No maximum investment limit Maximum Amount permitted to be Maximum Amount permitted to be
invested $ -- invested $ --
</TABLE>

---------------

* A CDSC of up to 1% may be charged on certain redemptions of Class A shares
purchased without a sales charge.

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<PAGE> 124

For investors who are eligible to purchase Institutional Service Class or
Institutional Class shares, the purchase of such shares will be preferable to
purchasing Class A, Class B or Class C Shares.

WHO CAN BUY INSTITUTIONAL SERVICE CLASS SHARES

The Institutional Service Class shares are available for purchase only by the
following:
- retirement plans introduced by persons not associated with brokers or
dealers that are primarily engaged in the retail securities business and
roll-over individual retirement accounts from such plans
- tax-exempt employee benefit plans for which third party administrators
provide recordkeeping services and are compensated by the Fund for such
services
- a bank, trust company or similar financial institution investing for its
own account or for the account of its trust customers for whom such
financial institution is exercising investment discretion in purchasing
Institutional Service Class shares, where the investment is part of a
program that collects an administrative service fee
- registered investment advisers investing on behalf of institutions and
high net-worth individuals where the adviser is compensated by the Fund
for services it provides
- life insurance separate accounts to fund the benefits of variable annuity
contracts issued to governmental entities as an investment option under
their deferred compensation plans as defined under Section 457 of the
Internal Revenue Code (the Code) or qualified plans adopted pursuant to
Section 401(a) of the Code.

WHO CAN BUY INSTITUTIONAL CLASS SHARES

The Institutional Class shares are available for purchase only by the
following:

- funds of funds offered by the Distributor or other affiliates of
Nationwide Mutual Funds

- tax-exempt employee benefit plans if no third party administrator for the
plan receives compensation from the Funds

- Institutional advisory accounts of VGAMT or its affiliates and those
having client relationships with an affiliate of VGAMT, or its affiliates
and their corporate sponsors, as well as subsidiaries and related employee
benefit plans and rollover individual retirement accounts from such
institutional advisory accounts

- a bank, trust company or similar financial institution investing for its
own account or for the account of its trust customers for whom such
financial institution is exercising investment discretion in purchasing
Institutional Class shares, where the investment is not part of a program
that requires payment to the financial institution of a Rule 12b-1 or
administrative service fee

- registered investment advisers investing on behalf of institutions and
high net-worth individuals where the adviser is compensated for services it
provides exclusively from its clients for such advisory services

- high net worth individuals desiring to purchase shares of the Funds
directly through the Distributor, provided they are able to satisfy the
minimum investment requirements described below.

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<PAGE> 125

Buying, Selling and Exchanging Fund Shares

BUYING SHARES

PURCHASE PRICE. The purchase or "offering" price of each share of a Fund is its
"net asset value" (NAV) next determined after the order is received, plus any
applicable sales charge. A separate NAV is calculated for each class of a Fund.
Generally, the NAV is based on the market value of the securities owned by the
Fund less its liabilities. The NAV for a class is determined by dividing the
total market value of the securities owned by a Fund, allocated to such class,
less liabilities allocable to such class, by the total number of that class'
outstanding shares. NAV is determined at the close of regular trading on the New
York Stock Exchange (usually 4 p.m. Eastern Time) on each day the Exchange is
open for trading.

MINIMUM INVESTMENTS --

CLASS A, CLASS B AND CLASS C SHARES

To open an account (per Fund) $1,000
................................................................................
Through the Automatic Asset
Accumulation plan per transaction $25
................................................................................
Additional investments (per Fund) $100
................................................................................
MINIMUM INVESTMENT --

INSTITUTIONAL SERVICE CLASS AND INSTITUTIONAL CLASS SHARES

To open an account (per Fund) $

................................................................................

Additional investments (per Fund) $

-------------------------------------

If you purchase shares through an account at a broker different minimum account
requirements may apply. These minimum investment requirements do not apply to
certain retirement plans. Call 1-800-848-0920 for more information.

The Funds do not calculate NAV on the following days:

- New Year's Day

- Martin Luther King, Jr. Day
- Presidents' Day
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day

- Christmas Day

- Other days when the New York Stock Exchange is not open.

Each Fund reserves the right not to determine an NAV when:

- It has not received any orders to purchase, sell or exchange shares.

- Changes in the value of that Fund's portfolio do not affect the NAV.

If current prices are not available for a security, or if Villanova SA Capital
Trust (VSA), as the Fund's administrator, or its agent, determines a price does
not represent fair value, a Fund's investments may be valued at fair value in
accordance with procedures adopted by the Board of Trustees. To the extent that
a Fund's investments are traded in markets that are open when the New York Stock
Exchange is closed, the value of the Fund's investments may change on days when
shares cannot be purchased or redeemed.

IN-KIND PURCHASES. The Funds reserve the right to accept payment for shares in
the form of securities that are permissible investments for the Funds.

CLASS A SALES CHARGES

The chart below shows the Class A sales charges, which decrease as the amount of
your investment increases.

CLASS C SALES CHARGES

Sales of Class C shares will be charged a sales charge of 1.00% of the offering
price (1.01% of the amount invested).

CLASS A FINDERS' FEES

- The purchase can be made in any combination of Nationwide Funds.

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<PAGE> 126

If these conditions are met, a finder's fee will be paid on the purchase at the
following rates:

- 1.00% for sales of the Nationwide Funds of $1 million and more but less
than $3 million.

- 0.50% for sales of the Nationwide Funds of $3 million and more but less
than $50 million.

- 0.25% for sales of the Nationwide Funds of $50 million or more.

REDUCTION AND WAIVER OF CLASS A SALES CHARGES

Shareholders can reduce or eliminate Class A shares' initial sales charge
through one or more of the discounts described below:

- An increase in the amount of your investment. The table above shows how the
sales charge decreases as the amount of your investment increases.

- Lifetime Additional Discount. You can add the value of any of the
Nationwide Funds Class A shares (except the Nationwide Money Market Fund)
you already own with the value of the shares you are purchasing, which may
reduce the applicable sales charge.

- Insurance Proceeds or Benefits Discount Privilege. If you use the proceeds
of an insurance policy issued by any member of the Nationwide Insurance
Enterprise to purchase Class A shares, you will pay one-half of the
published sales charge if you make your investment 60 days after receiving
the proceeds.

- No sales charge on a repurchase. If you sell Fund shares from your account,
we allow you a one-time privilege to reinvest some or all of the proceeds in
shares of the same class. You will not pay a sales charge on Class A shares
that you buy within 30 days of selling Class A shares of an equal or lesser
amount if you have already paid a sales charge. Remember, if you realize a
gain or a loss on your sale of shares, the transaction is taxable and
reinvestment will not affect the amount of capital gains tax that is due. If
you realize a loss on your sale and your reinvest, some or all of the loss
may not be allowed as a tax deduction depending on the amount you reinvest.

- Letter of Intent Discount. State in writing that during a 13-month period
you or a group of family members who live at the same address will purchase
or hold at least $50,000 in Class A shares (excluding the Nationwide Money
Market Fund) and your sales charge will be based on the total amount you
intend to invest. The letter may be backdated up to 90 days to include
previous purchases for determining your sales charge. Your Letter of Intent
is not a binding obligation to buy shares of a Fund; it is merely a
statement of intent. Call 1-800-848-0920 for more information.

WAIVER OF CLASS A SALES CHARGES

The Class A sales charges will be waived for the following purchases:

- Any person purchasing through an account with an unaffiliated brokerage firm
that has an agreement with the Distributor, to waive sales charges for those
persons.

- Directors, officers, full-time employees, sales representatives and their
employees or any investment advisory clients of a broker-dealer having a
dealer/selling agreement with the Distributor.

- Employer-sponsored retirement plans, including pension, profit sharing or
deferred compensation plans which are qualified under sections 401(a),
403(b) or 457 of the Internal Revenue Code.

- Trustees and retired Trustees of Nationwide Mutual Funds (including its
predecessor Trusts).

- Directors, officers, full-time employees, sales representatives and their
employees, and retired directors, officers, employees, and sales
representatives, their spouses, children or immediate relatives (including
mother, father, brothers, sisters, grandparents and grandchildren) and
immediate relatives of deceased employees of any member of Nationwide
Insurance and Nationwide Financial companies, or any investment advisory
clients of VMF, VGAMT and VSA and their affiliates.

29
<PAGE> 127

Buying, Selling and Exchanging Fund Shares

- Directors, officers, full-time employees, their spouses, children or
immediate relatives and immediate relatives of deceased employees of any
sponsor group which may be affiliated with the Nationwide Insurance and
Nationwide Financial companies from time to time (including but not limited
to, Farmland Insurance Industries, Inc., Maryland Farm Bureau, Inc., Ohio
Farm Bureau Federation, Inc., Pennsylvania Farmers' Association, Ruralite
Services, Inc., and Southern States Cooperative).

Additional investors eligible for sales charge waivers may be found in the SAI.

CONVERSION OF CLASS B SHARES

HOW TO PLACE YOUR PURCHASE ORDER

If you wish to purchase Class A, Class B or Class C shares, you may purchase
them using one of the methods described below. When you buy shares, be sure to
specify the class of shares. If you don't choose a class, your investment will
be made in Class A shares. Eligible entities wishing to purchase Institutional
Service Class or Institutional Class shares should contact Customer Service at
1-800-848-0920 for information regarding such purchases.

BY MAIL. Complete and mail the application with a check or money order made
payable to Nationwide Mutual Funds, P.O. Box 1492, Columbus, Ohio 43216-1492.
Payment must be made in U.S. dollars only and drawn on a U.S. bank. The Funds
will not accept third-party checks.

BY WIRE. You can request that your bank transmit funds (federal funds) by wire
to the Funds' custodian bank. In order to use this method, you must call
Customer Service at 1-800-848-0920 by 4 p.m. Eastern Time, and the wire must be
received by the custodian bank by the close of business on the day you placed
your order or your order will be cancelled. You may be liable for any loss to a
Fund resulting from the cancellation. Please note that your bank may charge a
fee to wire funds. If you choose this method to open your account, you must call
our toll-free number before you wire your investment, and you must then complete
and fax the application.

BY TELEPHONE (NATIONWIDE FUNDS NOW). Call 1-800-637-0012, our automated
voice-response system, 24 hours a day, seven days a week, for easy access to
mutual fund information. You can choose from a menu of choices to conduct
transactions and hear Fund price information, mailing and wiring instructions
and other mutual fund information. You must complete the appropriate section of
the application to use Nationwide Funds NOW to make purchases.

ADDITIONAL SHAREHOLDER SERVICES

Shareholders are entitled to a wide variety of services by contacting:

NATIONWIDE FUNDS NOW 1-800-637-0012

Our customized voice-response system, available 24 hours a day, seven days a
week

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<PAGE> 128

CUSTOMER SERVICE 1-800-848-0920

Representatives are available to answer questions between 8 a.m. and 5 p.m.
Eastern Time. (Monday through Friday, except Thursday, when representatives are
available between 9:30 a.m. and 5 p.m. Eastern Time.)

For additional information on buying shares and shareholder services, call
Customer Service or contact your sales representative.

SELLING SHARES

You can sell or, in other words, redeem your shares of the Funds at any time,
subject to certain restrictions described below. The price you will receive when
you sell your shares will be the NAV (less any applicable sales charges) next
determined after a Fund receives your properly completed order to sell in their
offices in Columbus, Ohio. Of course, the value of the shares you sell may be
more or less than their original purchase price depending upon the market value
of a Fund's investments at the time of the sale.

Properly completed orders contain all necessary paperwork to authorize and
complete the transaction. The Funds may require all account holder signatures,
updated account registration and bank account information and, depending on
circumstances, a signature guarantee.

RESTRICTIONS ON SALES

You may not be able to sell your shares of a Fund or a Fund may delay paying you
the proceeds from a redemption when the New York Stock Exchange is closed (other
than customary weekend and holiday closings) or if trading is restricted or if
an emergency exists.

SIGNATURE GUARANTEE -- CLASS A, CLASS B AND CLASS C SHARES