<PAGE> 1
Gartmore Growth 20 Fund
Gartmore Global Technology
and Communications Fund
Gartmore Emerging Markets Fund
Gartmore International Growth Fund
Gartmore Global Leaders Fund
Nationwide Family of Funds Annual Report 2000
GARTMORE
GLOBAL PARTNERS
[LOGO] NATIONWIDE
Family of Funds
(Background Photo)
<PAGE> 2
[PHOTO]
MESSAGE TO SHAREHOLDERS
October 31, 2000
Paul J. Hondros
President, Chief Executive Officer
Villanova Capital
In our fiscal 1999 report, we made a commitment to Nationwide Family of
Funds shareholders to deliver expanded investment capabilities and a more robust
product line. Moreover, we raised the bar for our existing portfolios in terms
of both performance and adherence to objective and policy. Today, at the close
of fiscal 2000, we have made significant progress in meeting that commitment.
- We have added several talented individuals to our investment management
team.
- We have enhanced our research capabilities while implementing a rigorous
review process to ensure that our funds adhere to their mandates.
- Our focus on performance was evident during the last three months, with our
three largest equity funds outpacing their benchmarks despite significant
market turbulence.
- And, we have expanded the range of investment solutions we provide to our
shareholders.
At the same time, we have extended our reach globally through our
partnership with our new affiliate, London-based Gartmore Investment Management
plc, a leading international investment management firm. We are working with
our colleagues at Gartmore to provide investors around the world with investment
solutions designed to help them meet their financial goals (see below).
We have achieved these results over a relatively short period by focusing
our investments in three key areas: people, product and process.
OUR INVESTMENT IN PEOPLE
In the U.S., our investment capabilities have been strengthened by several
additions to our portfolio management team.
- CURTISS BARROWS, who oversees our U.S. and global high-yield bond programs,
joined us from Deutsche Asset Management in January.
- JEFFREY PETHERICK and MARY CHAMPAGNE, formerly of Loomis, Sayles, head up a
team of value investment specialists. This group joined us in January.
- CHRISTOPHER BAGGINI left Allied Investment Advisors, Inc., in March to head
up our large-cap growth equity programs.
- AARON HARRIS, former lead manager of the Nicholas-Applegate Global
Technology Fund, came aboard in April to lead the development of our
investment capabilities in the technology sector.
- PANK AGRRAWAL moved from Putnam Investments to Villanova Capital in April
to head our quantitative research group.
In addition, we can draw on the considerable international resources
available to us through our affiliation with Gartmore.
To support our portfolio management team, we have increased our investment
in our research area, adding several talented analysts. Our investment team
relies heavily on research--rigorous, bottom-up research on companies,
industries and countries, augmented by sophisticated quantitative analysis. This
value-added research, we believe, allows us to offer competitive, risk-adjusted
results for our shareholders.
THE GARTMORE ADVANTAGE
With more than $80 billion in assets under management as of October 31,
2000, Gartmore Investment Management plc, offers comprehensive investment
management services covering the world's major equity, bond, and currency
markets. Gartmore ranks as the fifth largest institutional manager and the
seventh largest retail manager in the United Kingdom.
Gartmore was acquired by Nationwide Mutual in May 2000. Since then,
Nationwide Family of Funds and Gartmore Global Partners (the SEC-registered,
wholly owned subsidiary of Gartmore Investment Management plc) have partnered to
provide our shareholders with new global product solutions, including several
mutual funds introduced in October.
[PHOTO]
<PAGE> 3
OUR INVESTMENT IN PRODUCT OFFERINGS AND PROCESS
The additions to our investment team have enabled us to expand the lineup
of investment solutions available through the Nationwide Family of Funds. Today,
our shareholders can choose from more than 20 retail mutual funds, representing
a broad range of objectives, styles, and strategies, including global technology
and concentrated growth, international and emerging markets, and small-cap
value.
In addition to introducing new products, we implemented a process to
rigorously review and continually evaluate our existing portfolios to ensure
that they are managed in a manner consistent with their objectives, as stated in
our prospectuses. And, as we grow our investment capabilities, we want to ensure
that the appropriate level of resources is assigned to each of our portfolios.
As a result, we made changes in the management of three of our funds.
- In March, CHRIS BAGGINI became manager of the NATIONWIDE GROWTH FUND.
- One month later, AARON HARRIS took the helm of the GARTMORE MILLENNIUM
GROWTH FUND (formerly the Nationwide Mid Cap Growth Fund).
- In September, WILLIAM MILLER, our Chief Investment Officer, joined CHARLES
BATH as co-manager of the NATIONWIDE FUND, our largest fund. Bill is
responsible for the technology and telecommunications portions of the Fund,
while Chuck, who has successfully served Nationwide Fund shareholders for
more than 15 years, will continue to manage all other sectors of the Fund.
We will continue to evaluate our portfolios to ensure that our seasoned
managers are allowed to focus on their strengths and provide shareholders with
competitive results.
THE YEAR IN REVIEW
Our efforts in the investment and research areas are beginning to show
promise. Two of our newest equity funds, Gartmore Growth 20 Fund and Gartmore
Global Technology and Communications Fund, turned in stellar performances during
their first three months of operations, (June 30 to September 30, 2000), beating
their respective benchmarks by wide margins. October's turbulent markets cut
into these margins, but both funds managed to remain in positive territory.
Our new international offerings, which began operations on August 30,
suffered through a global downswing, and fell short of their respective
benchmarks.
BUILDING FOR THE FUTURE
Each of the investments we have made--in people, products, and process--is
designed with a single goal in mind: to provide our fund shareholders with
competitive returns on a risk-adjusted basis across a broad range of investment
solutions.
We look forward to continuing to help our shareholders meet their financial
goals in the months and years ahead.
/s/ Paul J. Hondros
Paul J. Hondros
CONTENTS
1 Message to Shareholders
2 Fund Highlights
5 Gartmore Growth 20 Fund
7 Gartmore Global Technology and Communications Fund
10 Gartmore Emerging Markets Fund
13 Gartmore International Growth Fund
17 Gartmore Global Leaders Fund
21 Statements of Assets and Liabilities
23 Statements of Operations
25 Statements of Changes in Net Assets
27 Financial Highlights
30 Notes to Financial Statements
39 Independent Auditors' Report
40 Shareholder Meeting
45 Trustees and Officers
<PAGE> 4
GARTMORE FUND HIGHLIGHTS
--------------------------------------------------------------------------------
GARTMORE GROWTH 20 FUND
INVESTMENT STRATEGY
The Fund seeks long-term capital appreciation by investing in a concentrated
portfolio of stocks that represent the "best ideas" of the managers. The Fund
typically focuses on a core group of 20 to 30 common stocks with high growth
potential.
PORTFOLIO MANAGERS
Christopher Baggini, CFA
Aaron Harris
TOP TEN HOLDINGS BY ISSUER
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
===================================================
Juniper Networks, Inc. 6.52%
Telecommunications
---------------------------------------------------
Foundry Networks, Inc. 5.99%
Networking Products
---------------------------------------------------
Emulex Corp. 5.89%
Networking Products
---------------------------------------------------
Manugistics Group, Inc. 5.71%
Computer Software & Services
---------------------------------------------------
Cisco Systems, Inc. 5.40%
Networking Products
---------------------------------------------------
Transocean Sedco Forex, Inc. 5.31%
Oil & Gas
---------------------------------------------------
BEA Systems, Inc. 5.28%
Computer Software & Services
---------------------------------------------------
Flextronics International Ltd. 5.08%
Electronics
---------------------------------------------------
Sanmina Corp. 4.97%
Electronics
---------------------------------------------------
Sun Microsystems, Inc. 4.82%
Computer Hardware
---------------------------------------------------
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
INVESTMENT STRATEGY
The Fund seeks long-term capital appreciation by investing in equity
securities of companies of all sizes, specifically targeting the technology and
communications sector, located around the world, including the United States.
The Fund targets industries and companies undergoing positive fundamental change
that the manager believes will deliver unexpected, sustainable growth.
PORTFOLIO MANAGER
Aaron Harris
TOP TEN HOLDINGS BY ISSUER
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
===================================================
Check Point Software Technologies Ltd. 3.45%
Internet Security
---------------------------------------------------
Nortel Networks Co. ADR 3.35%
Telecom Equipment
---------------------------------------------------
PeopleSoft, Inc. 3.10%
Enterprise Software
---------------------------------------------------
Siebel Systems, Inc. 3.00%
Applications Software
---------------------------------------------------
Flextronics International Ltd. 2.96%
Electronic Components/Instruments
---------------------------------------------------
Juniper Networks, Inc. 2.79%
Networking
---------------------------------------------------
Broadvision, Inc. 2.76%
Internet Applications Software
---------------------------------------------------
Foundry Networks, Inc. 2.59%
Networking Products
---------------------------------------------------
Broadcom Corp. 2.04%
Electronic Components/Instruments
---------------------------------------------------
Manugistics Group, Inc. 1.96%
Enterprise SoftwareInvestment Strategy
---------------------------------------------------
2 NATIONWIDE
<PAGE> 5
GARTMORE FUND HIGHLIGHTS [PHOTO]
--------------------------------------------------------------------------------
GARTMORE EMERGING MARKETS FUND
INVESTMENT STRATEGY
The Fund seeks long-term capital growth by investing primarily in equity
securities of companies located in emerging market countries. The Fund's
investment managers select regions or countries, and companies that they believe
have the potential to deliver unexpected earnings growth.
PORTFOLIO MANAGERS
Christopher Palmer, CFA
Philip Ehrmann
TOP TEN HOLDINGS BY ISSUER
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
===========================================================
Taiwan Semiconductor Manufacturing Co. Ltd. A 4.51%
Electronic Equipment
-----------------------------------------------------------
Carso Global Telecom ADR 4.40%
Telecommunications
-----------------------------------------------------------
SK Telecom Co. Ltd. ADR 3.88%
Telecommunications
-----------------------------------------------------------
Samsung Electronics GDR 3.81%
Semiconductors
-----------------------------------------------------------
Korea Telecom Corp. ADR 3.08%
Telecommunications
-----------------------------------------------------------
ICICI Ltd. ADR 2.78%
Financial Services
-----------------------------------------------------------
Yapi ve Kredi Bankasi AS 2.76%
Banking
-----------------------------------------------------------
Tele Norte Leste Participacoes SA ADR 2.72%
Telecommunications
-----------------------------------------------------------
Wal-Mart de Mexico SA de CV ADR 2.66%
Retail
-----------------------------------------------------------
AO Tatneft ADR 2.55%
Oil & Gas
-----------------------------------------------------------
GARTMORE INTERNATIONAL GROWTH FUND
INVESTMENT STRATEGY
The Fund seeks long-term capital growth by investing primarily in equity
securities of companies located in Europe, Australia, the Far East and other
regions, including developing countries. The Fund's investment manager selects
regions or countries, and companies that he believes have the potential to
deliver unexpected growth.
PORTFOLIO MANAGER
Stephen Watson
TOP TEN HOLDINGS BY ISSUER
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
===========================================================
Vodafone Group PLC 3.05%
Telecommunications
-----------------------------------------------------------
Total Fina Elf SA 2.45%
Oil & Gas
-----------------------------------------------------------
BP Amoco PLC 2.39%
Oil & Gas
-----------------------------------------------------------
Royal Dutch Petroleum Co. 2.05%
Oil & Gas
-----------------------------------------------------------
Nippon Telegraph & Telephone Corp. 2.05%
Telecommunications
-----------------------------------------------------------
Telefonica SA 1.83%
Telecommunications
-----------------------------------------------------------
Royal Bank of Scotland Group PLC 1.64%
Banking
-----------------------------------------------------------
L'Oreal SA 1.61%
Health & Personal Care
-----------------------------------------------------------
Mizuho Holdings, Inc. 1.56%
Banking
-----------------------------------------------------------
Christian Dior SA 1.54%
Luxury Goods
-----------------------------------------------------------
3 NATIONWIDE
<PAGE> 6
GARTMORE FUND HIGHLIGHTS
--------------------------------------------------------------------------------
GARTMORE GLOBAL LEADERS FUND
INVESTMENT STRATEGY
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. The portfolio management team uses a
sector approach and looks to identify those companies within industries with a
strong and competitive advantage in key growth segments. The team then seeks to
identify which of these companies have earnings growth potential greater than
that expected by the stock market.
PORTFOLIO MANAGERS
Gary Smith
Brian O'Neill
Neil Rogan
TOP TEN HOLDINGS BY ISSUER
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
===================================================
General Electric Co. 2.75%
Electrical Equipment
---------------------------------------------------
Exxon Mobil Corp. 2.34%
Oil & Gas
---------------------------------------------------
Microsoft Corp. 2.25%
Computer Software & Services
---------------------------------------------------
Amvescap PLC 2.20%
Financial Services
---------------------------------------------------
Pfizer, Inc. 1.98%
Pharmaceuticals
---------------------------------------------------
Citigroup, Inc. 1.95%
Financial Services
---------------------------------------------------
Merrill Lynch & Co., Inc. 1.83%
Financial Services
---------------------------------------------------
Wal-Mart Stores, Inc. 1.68%
Retail
---------------------------------------------------
Verizon Communications 1.64%
Telecommunications
---------------------------------------------------
Hartford Financial Services Group 1.62%
Financial Services
---------------------------------------------------
4 NATIONWIDE
<PAGE> 7
[PHOTO]
GARTMORE FUNDS
--------------------------------------------------------------------------------
GARTMORE GROWTH 20 FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the four-month period ended October 31, 2000, the Gartmore Growth 20 Fund
returned 16.40%(a) versus -1.39% for the S&P 500 Index and -12.79% for the
Nasdaq. The Fund commenced operations on June 30, 2000.
The portfolio was positively impacted by the strong performance of companies
with hyper-growth that exceeded earnings estimates. Stock selection continued to
be very important as a slower economy has made investing more treacherous. As
the period progressed, we increased portfolio exposure to the energy sector, and
continued to focus on market leaders within the technology sector.
The Growth 20 Fund was not exposed to personal computer stocks nor to
wireless phones and service providers -- contributors to the recent tech
sell-off. Companies such as BEA Systems, Corning, and Cisco helped the Fund's
performance through positive earnings revisions that led to continued relative
share price appreciation. We have been successful in exploiting short-term
volatility where possible -- in particular, through better execution of our
trades.
During the last few months, we placed significant emphasis on more
predictable or more stable earnings growth as we expect volatility to continue
as investors assimilate the impacts of a slower growth economy. Looking forward,
we will continue to focus on faster growing, large-cap securities with positive
fundamental dynamics.
PORTFOLIO MANAGERS: CHRISTOPHER BAGGINI, CFA, AND AARON HARRIS.
(a) Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $2,977,443
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
[PIEGRAPH]
Common Stock 100.0%
AVERAGE ANNUAL TOTAL RETURN
(For Period Ended October 31, 2000)*
CLASS A CLASS B INSTITUTIONAL
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) SERVICE CLASS(3)
--------------------------------------------------------------
Life* 16.40% 9.71% 16.20% 11.20% 16.60%
--------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* Fund commenced operations on June 30, 2000.
** These returns do not reflect the effects of sales charge.
(1) A 5.75% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted.
The CDSC declines to 0% after 6 years.
(3) Not subject to any sales charges.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE
[LINEGRAPH]
<TABLE>
<CAPTION>
Class A Class B Institutional Service Class S&P 500 CPI Nasdaq-100 Index
<S> <C> <C> <C> <C> <C> <C>
6/30/00 $ 9425 $10000 $10000 $10000 $10000 $10000
10/30/00 $10971 $11120 $11660 $ 9861 $10113 $ 8721
</TABLE>
Comparative performance of $10,000 invested in the Gartmore Growth 20 Fund, S&P
500 Index (S&P 500)(b), Consumer Price Index (CPI)(c), and the Nasdaq-100
Index(d) since inception. Unlike our Fund, these indices do not reflect any
fees, expenses, or sales charges.
(b) The S&P 500 is a capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy through changes in the
aggregate market value of these 500 stocks which represent all major
industries.
(c) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
(d) The Nasdaq-100 Index is capitalization-weighted and includes 100 of the
largest non-financial companies, domestic and foreign, in the Nasdaq
National Market.
5 NATIONWIDE
<PAGE> 8
STATEMENT OF INVESTMENTS GARTMORE GROWTH 20 FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (99.5%)
---------------------------------------------------------
BUSINESS SERVICES (3.3%)
2,000 Freemarkets, Inc.* $ 98,875
----------
---------------------------------------------------------
COMPUTER HARDWARE (7.2%)
2,300 Compaq Computer Corp. 69,943
1,300 Sun Microsystems, Inc.* 144,138
----------
214,081
----------
---------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (17.6%)
2,200 BEA Systems, Inc.* 157,850
1,500 Commerce One, Inc.* 96,281
600 i2 Technologies, Inc.* 102,000
1,500 Manugistics Group, Inc.* 170,907
----------
527,038
----------
---------------------------------------------------------
ELECTRONICS (10.0%)
4,000 Flextronics International Ltd.* 152,000
1,300 Sanmina Corp.* 148,606
----------
300,606
----------
---------------------------------------------------------
NETWORKING PRODUCTS (21.7%)
3,000 Cisco Systems, Inc.* 161,625
1,200 Emulex Corp.* 176,250
1,600 Extreme Networks, Inc.* 132,700
2,700 Foundry Networks, Inc.* 179,381
----------
649,956
----------
---------------------------------------------------------
OIL & GAS (10.1%)
5,600 Pride International, Inc.* 141,750
3,000 Transocean Sedco Forex, Inc. 159,000
----------
300,750
----------
---------------------------------------------------------
SEMICONDUCTORS (6.7%)
1,600 Applied Micro Circuits Corp.* 122,200
1,000 Globespan, Inc.* 76,938
----------
199,138
----------
---------------------------------------------------------
TELECOMMUNICATIONS (21.2%)
1,000 CIENA Corp.* 105,125
1,500 Corning, Inc. 114,750
2,000 Corvis Corp.* 131,250
1,000 Juniper Networks, Inc.* 194,999
2,000 Nortel Networks Corp. ADR 91,000
----------
637,124
----------
SHARES SECURITY VALUE
COMMON STOCK (99.5%)
---------------------------------------------------------
UTILITIES (1.7%)
3,000 TNPC, Inc.* $ 49,875
----------
TOTAL INVESTMENTS (cost $2,865,088) $2,977,443
==========
---------------------------------------------------------
The abbreviation in the above statement stands for the following:
ADR American Depository Receipt
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $2,881,346.
SECURITIES DENOMINATED IN FOREIGN CURRENCIES ARE SHOWN AT THE U.S. DOLLAR COST
AND VALUE.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $2,992,383.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
6 NATIONWIDE
<PAGE> 9
[PHOTO]
GARTMORE FUNDS
--------------------------------------------------------------------------------
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the four-month period ended October 31, 2000, the Gartmore Global
Technology and Communications Fund returned 11.10% (a) versus -8.64% for the
Morgan Stanley High-Tech 35 Index, the bench-mark index. The Fund commenced
operations on June 30, 2000.
Although the global technology sector suffered from slowing PC demand,
inventory build-ups, and concern over a slowing U.S. economy, the Fund's
performance was strong, thanks to its focus on identifying unexpected growth and
strong business franchises.
The Fund's top performers included Manugistics and i2 Technologies, two
supply-chain software manufacturers; DDi Corporation, a time-critical supplier
of electronics design, development, and manufacturing services; and Broadvision,
a provider of software that creates personalized web sites. IXIA, a diagnostic
systems maker that tests high-speed optical networks, was also a top performer,
thanks to an initial public offering that was very successful despite its debut
in a turbulent environment.
Poor performers included Nortel Networks. The company's announcement of third
quarter revenues that were below expectations created selling pressure on its
stock as well as other related stocks, including Sycamore Networks, whose
products transport voice and data over wavelengths of light; Foundry Networks, a
maker of Internet switches and routers; and Vitesse Semiconductor Corporation, a
high-speed chip maker. We view Nortel's problems as short-term in nature and
still see the company as a leading supplier of high-growth network equipment,
with a strong management team.
Despite third quarter results that greatly exceeded expectations, GlobeSpan,
the leading provider of integrated circuit, software, and systems designs for
digital subscriber lines, was a victim of the tech sell-off.
We continue to emphasize global companies that provide infra-structure
software and telecommunications network equipment to power the Internet. We are
also looking at opportunities overseas, such as Internet security firms in
Israel; consumer entertainment software providers in Japan; and a software
development firm in Europe. In the U.S., we like developers of digital imaging
products.
We still see the greatest growth opportunities in the volatile technology
sector. Even though the Internet has had a major impact on the U.S. economy, it
still has many more applications--particularly overseas.
PORTFOLIO MANAGER: AARON HARRIS
(a) Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $9,442,138
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
[PIEGRAPH]
Common Stock 81.0%
Repurchase Agreement 19.0%
AVERAGE ANNUAL TOTAL RETURN
(For Period Ended October 31, 2000)*
CLASS A CLASS B INSTITUTIONAL
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) SERVICE CLASS(3)
--------------------------------------------------------------------------------
Life* 11.10% 4.71% 10.80% 5.80% 11.20%
--------------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* Fund commenced operations on June 30, 2000.
** These returns do not reflect the effects of a sales charge.
(1) A 5.75% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted.
The CDSC declines to 0% after 6 years.
(3) Not subject to any sales charges.
Investment return and principal value will fluctuate, and when redeemed,
shares may be worth more or less than original cost. Past performance is no
guarantee of future results.
FUND PERFORMANCE
[LINEGRAPH]
<TABLE>
<CAPTION>
Class A Class B Institutional Service Class Morgan Stanley High Tech CPI
<S> <C> <C> <C> <C> <C>
6/30/00 $ 9425 $10000 $10000 $10000 $10000
10/31/00 $10471 $10580 $11120 $ 9136 $10113
</TABLE>
Comparative performance of $10,000 invested in the Gartmore Global
Technology and Communications Fund, Morgan Stanley High-Tech 35 Index
(Morgan Stanley High-Tech)(b), and the Consumer Price Index (CPI)(c) since
inception. Unlike our Fund, these indices do not reflect any fees, expenses,
or sales charges.
(b) The Morgan Stanley High-Tech is an equal dollar-weighted index of 35
stocks in nine different technology subsectors.
(c) The CPI represents changes in prices of a basket of goods and
services purchased for consumption by urban households.
7 NATIONWIDE
<PAGE> 10
STATEMENT OF INVESTMENTS
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (87.6%)
--------------------------------------------------------------------------------
CANADA (3.4%)
TELECOM EQUIPMENT (3.4%)
6,431 Nortel Networks Corp. ADR $292,611
--------
--------------------------------------------------------------------------------
FRANCE (1.2%)
TELECOM EQUIPMENT (1.2%)
600 Alcatel 36,567
1,150 Alcatel SA ADR 71,732
--------
TOTAL FRANCE 108,299
--------
--------------------------------------------------------------------------------
JAPAN (3.8%)
COMPUTER SOFTWARE (0.8%)
800 Konami Co. Ltd. 67,408
--------
COMPUTERS - INTEGRATED SYSTEMS (3.0%)
600 ITOCHU TECHNO-SCIENCE Corp. 142,545
4 Net One Systems Co., Ltd. 118,696
--------
261,241
--------
TOTAL JAPAN 328,649
--------
--------------------------------------------------------------------------------
SINGAPORE (1.3%)
TELECOM EQUIPMENT (1.3%)
17,200 Datacraft Asia Ltd. 117,820
--------
--------------------------------------------------------------------------------
UNITED KINGDOM (8.2%)
DATA PROCESSING & REPRODUCTION (1.9%)
3,200 Autonomy Corp. PLC* 163,566
--------
INTERNET SECURITY (0.6%)
9,000 nCipher PLC* 51,622
--------
NETWORKING (2.7%)
8,700 Dimensions Data Holdings PLC* 76,305
48,100 Redbus Interhouse PLC* 162,392
--------
238,697
--------
TELECOM EQUIPMENT (3.0%)
11,900 Marconi PLC 150,336
11,750 Spirent PLC 109,027
--------
259,363
--------
TOTAL UNITED KINGDOM 713,248
--------
--------------------------------------------------------------------------------
UNITED STATES (69.7%)
APPLICATIONS SOFTWARE (4.3%)
600 Rational Sotware Corp.* 35,813
1,800 Resonate, Inc.* 76,275
2,500 Siebel Systems, Inc.* 262,343
--------
374,431
--------
BUSINESS-TO-BUSINESS / E COMMERCE (3.7%)
600 Ariba, Inc.* 75,825
2,200 Commerce One, Inc.* 141,213
600 i2 Technologies, Inc.* 102,000
--------
319,038
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
UNITED STATES (CONTINUED)
CIRCUIT BOARDS (2.3%)
2,150 DDi Corp.* $ 85,866
2,450 Merix Corp.* 114,423
--------
200,289
--------
COMPUTER (5.6%)
8,400 Apple Computer, Inc.* 164,325
5,400 Compaq Computer Corp. 164,214
1,450 Sun Microsystems, Inc.* 160,769
--------
489,308
--------
COMPUTER HARDWARE (4.8%)
1,650 EMC Corp.* 146,953
2,000 SanDisk Corp.* 107,469
1,150 VERITAS Software Corp.* 162,168
--------
416,590
--------
COMPUTER SOFTWARE (0.9%)
1,600 Packeteer, Inc.* 39,800
800 Quest Software, Inc.* 34,950
--------
74,750
--------
COMPUTERS - INTEGRATED SYSTEMS (1.5%)
300 Brocade Communications Systems, Inc.* 68,213
750 McDATA Corp.* 62,520
--------
130,733
--------
DISTRIBUTION (0.1%)
300 Owens & Minor, Inc. 4,538
--------
ELECTRONIC COMPONENTS / INSTRUMENTS (9.3%)
1,350 Applied Micro Circuits Corp.* 103,106
800 Broadcom Corp.* 177,899
6,800 Flextronics International Ltd.* 258,399
1,300 Orbotech Ltd.* 68,819
550 PMC-Sierra, Inc.* 93,225
1,050 Sanmina Corp.* 120,028
--------
821,476
--------
ENTERPRISE SOFTWARE (7.8%)
2,000 BEA Systems, Inc.* 143,500
11,800 Brio Technology, Inc.* 96,613
1,500 Manugistics Group, Inc.* 170,905
6,200 PeopleSoft, Inc.* 270,571
--------
681,589
--------
INTERNET APPLICATIONS SOFTWARE (2.8%)
8,100 BroadVision, Inc.* 240,974
--------
INTERNET SECURITY (3.4%)
1,900 Check Point Software Technologies Ltd.* 300,912
--------
INTERNET SERVICES / SOFTWARE (0.4%)
600 Inktomi Corp.* 38,063
--------
NETWORKING PRODUCTS (9.1%)
1,200 Cobalt Networks, Inc.* 66,150
900 Emulex Corp.* 132,188
1,650 Extreme Networks, Inc.* 136,847
3,400 Foundry Networks, Inc.* 225,887
1,250 Juniper Networks, Inc.* 243,749
--------
804,821
--------
CONTINUED
8 NATIONWIDE
<PAGE> 11
[PHOTO]
STATEMENT OF INVESTMENTS
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
UNITED STATES (CONTINUED)
SEMICONDUCTORS & RELATED SERVICES (3.3%)
1,850 GlobeSpan, Inc.* $ 142,334
2,200 Linear Technology Corp. 142,038
----------
284,372
----------
TELECOM EQUIPMENT (8.5%)
1,500 Avanex Corp.* 152,344
1,225 CIENA Corp.* 128,778
2,050 Corning, Inc. 156,825
800 Corvis Corp.* 52,500
800 Cosine Communications, Inc.* 26,450
2,600 Finisar Corp.* 74,913
450 SDL, Inc.* 116,663
550 Sycamore Networks, Inc.* 34,788
----------
743,261
----------
WIRELESS EQUIPMENT (1.9%)
3,050 Palm, Inc.* 163,366
----------
TOTAL UNITED STATES 6,088,511
----------
TOTAL COMMON STOCK (cost $7,759,255) 7,649,138
----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (20.5%)
--------------------------------------------------------------------------------
UNITED STATES
$1,793,000 Fifth Third Bank 6.35%, 10/31/00, matures
11/1/00, Collateralized by $1,879,633
FHARM #786905, 6.38%, 10/1/29,
market value $1,828,860
TOTAL REPURCHASE AGREEMENT (cost $1,793,000) 1,793,000
----------
TOTAL INVESTMENTS (cost $9,552,255) $9,442,138
==========
--------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
ADR American Depository Receipt
FHARM Federal Home Adjustable Rate Mortgage
(Federal Housing Administration)
PLC Public Limited Company
SA Societe Anonyme (French corporation)
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $9,632,786.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $8,731,533.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
9 NATIONWIDE
<PAGE> 12
GARTMORE FUNDS
--------------------------------------------------------------------------------
GARTMORE EMERGING MARKETS FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the two months ended October 31, 2000, the Gartmore Emerging Markets Fund
returned -18.81%(a) versus -16.34% for the S&P/IFC Investables Index (S&P/IFC).
The Fund commenced operations on August 30, 2000.
Returns from regional and country selections were broadly neutral over the
period, while stock selection detracted from performance. In particular, the
Fund's emphasis on technology and telecommunications stocks hurt overall
performance, particularly in Asia and Latin America.
Ambev, a Brazilian beverage company, was the Fund's top performing stock
during the period. Ambev is currently the world's fourth largest beverage
company, following the merger of Brazilian beverage companies Brahma and
Antarctica. The stock's positive performance over the period reflected the
combined strength of the two companies--in market presence, earnings growth
potential, and anticipated post-merger operational savings.
Asia Info, a Chinese stock, was the portfolio's worst performer, hurt by
generally poor sentiment towards information technology companies.
Among the Fund's five largest holdings, Taiwan Semiconductor and Samsung
Electronics fell sharply, hurt by the general sell-off in technology stocks. On
the other hand, SK Telecom and Korea Telecom rose relative to the Index,
although declined in absolute terms. Both companies are leaders in their
respective markets and benefited from price rebounds and positive analyst
reviews. Carso Global Telecom also fell in absolute terms, although it
outperformed the S&P/IFC. The company dominates fixed-line and wireless telecom
services and Internet access in the fast-growing Mexican market.
During the period, we bought AMMB holdings, a key addition to the Portfolio.
As one of Malaysia's leading financial holding companies, AMMB is expected to
post strong earnings over the next 12 months and to benefit from consolidation
across the sector. We sold Dimension Data, a South African telecom and network
services holding company. Dimension Data performed extremely well relative to
its local South African market and the emerging markets' technology sector. It
moved its primary listing to London, entering the FTSE 100 in the process. This
resulted in a re-rating of the security, which is now fully valued. The funds
from the sale were used to purchase additional shares of Taiwan Semiconductor
Manufacturing and Samsung Electronics.
These major buy and sell transactions contributed to a decline in the Fund's
exposure to South Africa and to an increase in its exposure to Pacific Rim
countries. Relative to the S&P/IFC, the Fund is currently overweighted in the
Pacific Rim and Latin America, and is underweighted in Emerging Europe.
PORTFOLIO MANAGER: GARTMORE GLOBAL PARTNERS-SUBADVISER
(a) Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $4,059,140
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
[PIEGRAPH]
Repurchase Agreement 3.8%
Common Stock 96.2%
AVERAGE ANNUAL TOTAL RETURN
(For Period Ended October 31, 2000)*
CLASS A CLASS B INSTITUTIONAL
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) SERVICE CLASS(3)
--------------------------------------------------------------------------------
Life* -18.81% -23.48% -18.95% -23.00% -18.79%
--------------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* Fund commenced operations on August 30, 2000.
** These returns do not reflect the effects of sales charge.
(1) A 5.75% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted.
The CDSC declines to 0% after 6 years.
(3) Not subject to any sales charges.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE
[LINEGRAPH]
<TABLE>
<CAPTION>
Class A Class B Institutional Service Class S&P/IFC CPI
<S> <C> <C> <C> <C> <C>
8/30/00 $9425 $10000 $10000 $10000 $10000
10/31/00 $7652 $ 7700 $ 8121 $ 8366 $10084
</TABLE>
Comparative performance of $10,000 invested in the Gartmore
Emerging Markets Fund, S&P/IFC Investables Index (S&P/IFC)(b), and the Consumer
Price Index (CPI)(c) since inception. Unlike our Fund, these indices do not
reflect any fees, expenses, or sales charges.
(b) The S&P/IFC Investable Indices aim to represent the performance of the
stocks in emerging stock markets that are available to foreign
institutional investors.
(c) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
10 NATIONWIDE
<PAGE> 13
STATEMENT OF INVESTMENTS GARTMORE EMERGING MARKETS FUND [PHOTO]
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (95.9%)
--------------------------------------------------------------------------------
ARGENTINA (1.6%)
FINANCIAL SERVICES (1.2%)
3,500 Grupo Financiero Galicia SA ADR* $ 50,968
--------
INVESTMENT COMPANY (0.4%)
1,100 Perez Companc SA ADR 15,813
--------
TOTAL ARGENTINA 66,781
--------
--------------------------------------------------------------------------------
BRAZIL (15.2%)
BANKING (2.3%)
15,000 Banco Bradesco SA ADR 95,499
--------
BEVERAGES (1.4%)
2,500 Companhia de Bebidas das Americas ADR 56,406
--------
MINING (2.3%)
4,000 Cia Vale Do Rio Doce ADR 93,500
--------
OIL & GAS (1.3%)
2,000 Petroleo Brasileiro SA ADR 53,039
--------
RETAIL (1.7%)
2,000 Companhia Brasileira de Distribuicao
Grupo Pao de Acucar ADR 71,250
--------
TELECOMMUNICATIONS (6.2%)
1,000 Brasil Telecom Participacoes SA ADR 54,188
2,400 Embratel Participacoes SA ADR 38,850
5,000 Tele Norte Leste Participacoes SA ADR 110,624
1,500 Telesp Celular Participacoes SA ADR 47,438
--------
251,100
--------
TOTAL BRAZIL 620,794
--------
--------------------------------------------------------------------------------
CHINA (1.2%)
INTERNET (1.2%)
4,000 AsiaInfo Holdings, Inc.* 48,500
--------
--------------------------------------------------------------------------------
GREECE (1.4%)
TELECOMMUNICATIONS (1.4%)
3,887 STET Hellas Telecommunications SA ADR* 56,362
--------
--------------------------------------------------------------------------------
HONG KONG (7.6%)
BANKING (1.4%)
4,000 HSBC Holdings PLC 55,649
--------
PETROLEUM (1.1%)
2,200 China Petroleum and Chemical Corp. ADR* 43,175
--------
REAL ESTATE (4.0%)
7,000 Cheung Kong Holdings Ltd. 77,415
7,000 Hutchison Whampoa Ltd. 86,840
--------
164,255
--------
TELECOMMUNICATIONS (1.1%)
1,500 China Mobile (Hong Kong) Ltd. ADR* 45,938
--------
TOTAL HONG KONG 309,017
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
HUNGARY (3.2%)
PHARMACEUTICALS (2.0%)
1,700 Gedeon Richter Rt. GDR $ 82,587
--------
TELECOMMUNICATIONS (1.2%)
2,000 Magyar Tavkozlesi Rt. ADR 47,000
--------
TOTAL HUNGARY 129,587
--------
--------------------------------------------------------------------------------
INDIA (4.6%)
FINANCIAL SERVICES (2.8%)
12,000 ICICI Ltd. ADR 113,249
--------
INTERNET (0.6%)
3,000 Satyam Infoway Ltd. ADR* 23,438
--------
TEXTILE MANUFACTURING (1.2%)
4,000 Reliance Industries Ltd. GDR 51,784
--------
TOTAL INDIA 188,471
--------
--------------------------------------------------------------------------------
ISRAEL (0.7%)
SEMICONDUCTORS (0.7%)
7,000 Tioga Technologies Ltd.* 28,875
--------
KOREA (17.1%)
AUTOMOBILE (2.1%)
15,000 Hyundai Motor Co. Ltd. GDR 85,718
--------
BANKING (2.2%)
4,500 Shinhan Bank GDR 90,201
--------
SEMICONDUCTORS (5.7%)
20,000 LG Electronics Inc. GDR 76,500
4,700 Samsung Electronics GDR 155,100
--------
231,600
--------
TELECOMMUNICATIONS (7.1%)
3,400 Korea Telecom Corp. ADR 125,375
6,300 SK Telecom Co. Ltd. ADR 157,893
--------
283,268
--------
TOTAL KOREA 690,787
--------
--------------------------------------------------------------------------------
MALAYSIA (1.1%)
BANKING (1.1%)
41,000 AMMB Holdings Berhad 45,965
--------
--------------------------------------------------------------------------------
MEXICO (17.8%)
CABLE TV/PROGRAMMING (3.1%)
500 Grupo Televisa SA GDR* 27,063
8,000 TV Azteca SA de CV ADR 100,000
--------
127,063
--------
DIVERSIFIED (2.8%)
10,000 Grupo Carso SA de CV ADR* 62,904
5,000 Grupo IMSA SA de CV ADR 50,938
--------
113,842
--------
HOUSING (1.1%)
3,300 Consorcio ARA SA de CV ADR 45,861
--------
CONTINUED
11 NATIONWIDE
<PAGE> 14
STATEMENT OF INVESTMENTS GARTMORE EMERGING MARKETS FUND CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
MEXICO (CONTINUED)
RETAIL (4.7%)
8,000 Grupo Elektra SA de CV ADR $ 82,500
4,500 Wal-Mart de Mexico SA de CV ADR* 108,383
--------
190,883
--------
TELECOMMUNICATIONS (6.1%)
40,000 Carso Global Telecom ADR* 179,307
5,000 Grupo Iusacell SA de CV ADR* 65,000
--------
244,307
--------
TOTAL MEXICO 721,956
--------
--------------------------------------------------------------------------------
POLAND (3.2%)
PETROLEUM (1.1%)
6,000 Polski Koncern Naftowy Orlen SA GDR 45,971
--------
PRINTING & PUBLISHING (0.9%)
2,000 Agora SA GDR* 36,588
--------
TELECOMMUNICATIONS (1.2%)
10,000 Telekomunikacja Polska SA GDR 49,286
--------
TOTAL POLAND 131,845
--------
--------------------------------------------------------------------------------
RUSSIA (2.5%)
OIL & GAS (2.5%)
10,000 AO Tatneft ADR 103,750
--------
--------------------------------------------------------------------------------
SOUTH AFRICA (4.0%)
BANKING (1.4%)
3,000 Nedcor Ltd. 56,360
--------
MINING (2.6%)
1,300 Anglo American Platinum Corp. Ltd. 50,738
2,000 De Beers 55,037
--------
105,775
--------
TOTAL SOUTH AFRICA 162,135
--------
--------------------------------------------------------------------------------
TAIWAN (10.9%)
COMPUTER HARDWARE (2.5%)
8,100 Acer Communications & Multimedia, Inc.
GDR 52,448
9,000 Asustek Computer, Inc. GDR 49,275
--------
101,723
--------
ELECTRONIC EQUIPMENT (6.8%)
8,000 Hon Hai Precision Industry Co. Ltd. GDR 92,200
8,100 Taiwan Semiconductor Manufacturing
Co. Ltd. ADR* 183,768
--------
275,968
--------
SEMICONDUCTORS (1.6%)
5,500 Advanced Semiconducting Engineering
Inc. ADR* 33,344
8,300 Siliconware Precision Industries Co. ADR* 33,200
--------
66,544
--------
TOTAL TAIWAN 444,235
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
TURKEY (3.8%)
BANKING (2.7%)
13,000,000 Yapi ve Kredi Bankasi AS* $ 112,330
----------
TELECOMMUNICATIONS (1.1%)
4,000 Turkcell Iletisim Hizmetleri AS ADR* 43,750
----------
TOTAL TURKEY 156,080
----------
TOTAL COMMON STOCK (cost $4,784,342) 3,905,140
----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (3.8%)
--------------------------------------------------------------------------------
UNITED STATES
$154,000 Fifth Third Bank 6.35%, 10/31/00, matures
11/01/00, Collateralized by $152,444.47
FHAR Pool # 350161, 8.25%, 06/02/21,
market value $157,080
TOTAL REPURCHASE AGREEMENT (cost $154,000) 154,000
----------
TOTAL INVESTMENTS (cost $4,938,342) $4,059,140
==========
--------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
ADR American Depository Receipt
AS Limited
CV Convertible
FHAR Federal Home Adjustable Rate Mortgage
(Federal Housing Administration)
GDR Global Depository Receipt
PLC Public Limited Company (British or Irish)
SA Sociedad Anonima (Spanish or Greek corporation)
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $4,947,410.
SECURITIES DENOMINATED IN FOREIGN CURRENCIES ARE SHOWN AT THE U.S. DOLLAR COST
AND VALUE.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $4,072,425.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
12 NATIONWIDE
<PAGE> 15
[PHOTO]
GARTMORE FUNDS
--------------------------------------------------------------------------------
GARTMORE INTERNATIONAL GROWTH FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the two-month period ended Oct. 31, 2000, the Gartmore International
Growth Fund returned -11.40%(a) versus -8.69% for the MSCI AC World Ex US Index,
the benchmark index. The Fund commenced operations on August 30, 2000.
Regional asset allocation had a mildly positive effect on the
portfolio, while the Fund's emphasis on growth stocks detracted from Fund
performance. The MSCI AC World ex US Growth Index underperformed its value
counterpart by 8.5% over the two-month period. An overweight position in Europe
contributed positively to overall return, but elsewhere, regional asset
allocation made little or no impact. In general, our stock selection detracted
from performance, particularly in the information technology, consumer
discretionary and telecom sectors. However, holdings in the health care and
consumer staples sectors, as well as stock selection in Canadian issues, added
value.
The Fund's top performing stock was UK's Photo-Me International. The company,
purchased in late September, supplies photo booths in more than 25 countries.
Photo-Me's share price rose after it announced a contract with Kodak to supply
digital booths in Asia. The Fund's worst performing stock was Samsung
Electronics. Samsung's sliding share price reflected the sensitivity of Asian
companies to a slowdown in global (primarily U.S.) demand for electronic goods
and components.
Of the Fund's largest five holdings, Vodafone rose relative to the Index,
buoyed by the purchase of a stake in China Telecom. Royal Dutch Petroleum, Total
Fina Elf and BP Amoco rose relative to the Index; however, in U.S. dollar terms,
all three companies produced negative absolute returns as tensions eased in the
Middle East and oil prices declined. Nippon Telegraph & Telephone's stock price
fell relative to the Index on disappointing demand following a partial sale of
the Japanese government's stake in the company. The telecom giant also suffered
from negative news flow.
During the period, the Fund substantially reduced exposure to technology
companies relative to the Index, although it continued to emphasize high-growth
sub-sectors, such as electronic equipment, IT consulting and services, Internet
software and services, semiconductor equipment and products, and software.
Exposure to the telecom sector was also reduced, while exposure to financials,
oil and gas, consumer discretionary and consumer staples stocks was increased
relative to the Index. Overall, the Fund ended the period overweighted in the
consumer, energy, financials and information technology sectors, and
underweighted in the health care, industrials, materials, telecoms and utilities
sectors. At a regional level, we maintained an overweight position in Europe.
Going forward, the Fund will continue to emphasize strong franchise growth
stocks. At this point, we do not anticipate changes to our regional asset
allocation strategy.
PORTFOLIO MANAGER: GARTMORE GLOBAL PARTNERS-SUBADVISER
(a) Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $8,875,464
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
[PIEGRAPH]
Repurchase Agreement 3.4%
Common Stock 96.6%
AVERAGE ANNUAL TOTAL RETURN
(For Period Ended October 31, 2000)*
CLASS A CLASS B INSTITUTIONAL
YEARS W/O SC** W/SC(1) W/O SC **W/SC(2) SERVICE CLASS(3)
--------------------------------------------------------------------------------
Life* -11.40% -16.49% -11.50% -15.93% -11.40%
--------------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* Fund commenced operations on August 30, 2000. ** These returns do not
reflect the effects of sales charge.
(1) A 5.75% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted.
The CDSC declines to 0% after 6 years.
(3) Not subject to any sales charges.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE
[LINEGRAPH]
<TABLE>
<CAPTION>
MSCI AC World
Class A Class B Institutional Service Class EX U.S.TR CPI
<S> <C> <C> <C> <C> <C>
8/30/00 $9425 $10000 $10000 $10000 $10000
10/31/00 $8351 $ 8408 $ 8860 $ 9131 $10084
</TABLE>
Comparative performance of $10,000 invested in Gartmore
International Growth Fund, Morgan Stanley Capital International All Country
World ex U.S. Index (MSCI AC World ex U.S.)(b), and the Consumer Price Index
(CPI)(c) since inception. Unlike our Fund, these indices do not reflect any
fees, expenses, or sales charges.
(b) The MSCI AC World ex U.S. is an index that contains companies that are
replicas of their local markets not including any securities in the
United States.
(c) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
13 NATIONWIDE
<PAGE> 16
STATEMENT OF INVESTMENTS GARTMORE INTERNATIONAL GROWTH FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (96.6%)
--------------------------------------------------------------------------------
AUSTRALIA (1.7%)
BANKING (0.6%)
3,700 Commonwealth Bank of Australia $ 55,041
--------
MULTI-MEDIA (0.8%)
6,000 News Corp. Ltd. 62,739
--------
TRANSPORTATION (0.3%)
15,000 Qantas Airways Ltd. 30,157
--------
TOTAL AUSTRALIA 147,937
--------
--------------------------------------------------------------------------------
BRAZIL (0.9%)
MINING (0.6%)
2,100 Companhia Vale do Rio Doce ADR 49,088
--------
TELECOMMUNICATIONS (0.3%)
1,200 Tele Norte Leste Participacoes SA ADR 26,550
--------
TOTAL BRAZIL 75,638
--------
--------------------------------------------------------------------------------
CANADA (3.4%)
BANKING (0.9%)
2,400 Royal Bank Of Canada 75,902
--------
DIVERSIFIED (0.8%)
4,800 Bombardier, Inc. 75,273
--------
INSURANCE (0.7%)
2,800 Canada Life Financial Corp. 65,268
--------
TELECOMMUNICATIONS (0.7%)
2,200 BCE, Inc. 59,061
--------
TELECOMMUNICATIONS EQUIPMENT
MANUFACTURER (0.3%)
600 Nortel Networks Corp. 27,147
--------
TOTAL CANADA 302,651
--------
--------------------------------------------------------------------------------
FINLAND (1.2%)
TELECOMMUNICATIONS EQUIPMENT
MANUFACTURER (1.2%)
2,636 Nokia Oyj 108,346
--------
--------------------------------------------------------------------------------
FRANCE (10.7%)
BANKING (1.5%)
1,496 BNP Paribas SA 128,837
--------
BUILDING & CONSTRUCTION (1.0%)
1,800 Bouygues SA 91,546
--------
HEALTH & PERSONAL CARE (1.6%)
1,875 L'Oreal SA 143,039
--------
LUXURY GOODS (1.5%)
2,700 Christian Dior SA 137,090
--------
OIL & GAS (2.4%)
1,522 Total Fina Elf SA 217,513
--------
PHARMACEUTICALS (1.5%)
1,800 Aventis SA 129,690
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
FRANCE (CONTINUED)
TELECOMMUNICATIONS (1.2%)
1,713 Alcatel $104,400
--------
TOTAL FRANCE 952,115
--------
--------------------------------------------------------------------------------
GERMANY (6.8%)
AUTOMOTIVE (1.3%)
3,500 Bayerische Motoren Werke AG 115,704
--------
BANKING (0.9%)
931 Deutsche Bank AG 76,548
--------
COMPUTER SOFTWARE / SERVICES (1.2%)
526 Sap AG 106,338
--------
DIVERSIFIED (1.0%)
688 Siemens AG 87,477
--------
FINANCIAL SERVICES (0.2%)
259 AWD Holding AG* 15,148
--------
INSURANCE (1.5%)
348 Ergo Versicherungs Gruppe AG 48,082
300 Muenchener Rueckversucherungs
Gesellschaft AG 94,597
--------
142,679
--------
INVESTMENT COMPANY (0.7%)
837 Tecis Holding AG 60,448
--------
TOTAL GERMANY 604,342
--------
--------------------------------------------------------------------------------
HONG KONG (2.5%)
BANKING (0.8%)
5,000 HSBC Holdings PLC** 69,562
--------
CHEMICALS (0.3%)
1,200 China Petroleum & Chemical Corp. ADR* 23,550
--------
DIVERSIFIED (1.1%)
8,000 Hutchison Whampoa Ltd. 99,245
--------
TRANSPORTATION (0.3%)
20,000 MTR Corp. Ltd.* 29,620
--------
TOTAL HONG KONG 221,977
--------
--------------------------------------------------------------------------------
IRELAND (1.2%)
PHARMACEUTICALS (1.2%)
2,000 Elan Corp. PLC ADR* 103,875
--------
--------------------------------------------------------------------------------
ITALY (3.4%)
INSURANCE (0.9%)
6,398 Riunione Adriatica di Sicurta SpA 83,897
--------
INVESTMENT COMPANY (1.1%)
6,597 Banca Fideuram SpA 101,326
--------
TELECOMMUNICATIONS (1.4%)
14,000 Telecom Italia Mobile SpA 118,908
--------
TOTAL ITALY 304,131
--------
CONTINUED
14 NATIONWIDE
<PAGE> 17
[PHOTO]
STATEMENT OF INVESTMENTS GARTMORE INTERNATIONAL GROWTH FUND CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
JAPAN (20.2%)
AUTOMOTIVE (1.5%)
9,000 Nissan Motor Co. Ltd. $ 61,739
1,900 Toyota Motor Corp. 75,870
----------
137,609
----------
BANKING (1.6%)
18 Mizuho Holdings, Inc.* 138,314
----------
CHEMICALS (0.6%)
8,000 Asahi Chemical Industry Co. Ltd. 49,530
----------
COMPUTER SOFTWARE / SERVICES (1.8%)
1,400 Capcom Co. Ltd. 54,494
500 Fujitsu Support & Service, Inc. 60,722
500 Trend Micro, Inc.* 47,167
----------
162,383
----------
ELECTRONICS (3.7%)
4,000 Matsushita Electric Industrial Co. Ltd. 116,132
3,000 NEC Corp. 57,150
100 Rohm Co. Ltd. 25,195
7,000 Sharp Corp. 89,114
500 Sony Corp. 39,932
----------
327,523
----------
FINANCIAL SERVICES (1.9%)
800 Orix Corp. 83,893
4,000 The Nomura Securities Co. Ltd. 84,809
----------
168,702
----------
HEALTH & PERSONAL CARE (0.7%)
2,000 Kao Corp. 59,898
----------
INDUSTRIAL (0.9%)
11,000 NSK Ltd. 79,186
----------
MATERIALS (0.9%)
28,000 Mitsubishi Materials Corp. 82,318
----------
PHARMACEUTICALS (1.5%)
2,000 Takeda Chemical Industries Ltd. 131,702
----------
PRINTING (0.7%)
4,000 Dai Nippon Printing Co. Ltd. 62,645
----------
RETAIL (0.6%)
1,800 Sunkus & Associates, Inc. 53,578
----------
SERVICES (0.4%)
500 Secom Co. Ltd. 35,627
----------
TELECOMMUNICATIONS (2.0%)
20 Nippon Telegraph & Telephone Corp. 181,891
----------
TRADING CO. (0.9%)
33,000 Marubeni Corp.* 77,070
----------
TRANSPORTATION (0.5%)
7 East Japan Railway Co. 40,197
----------
TOTAL JAPAN 1,788,173
----------
--------------------------------------------------------------------------------
KOREA (1.3%)
AUTOMOTIVE (0.2%)
3,800 Hyundai Motor Co. Ltd. GDR 21,715
----------
ELECTRONICS (0.4%)
450 Samsung Electronics GDR ** 33,188
----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
KOREA (CONTINUED)
TELECOMMUNICATIONS (0.7%)
2,300 SK Telecom Co. Ltd. ADR $ 57,643
--------
TOTAL KOREA 112,546
--------
--------------------------------------------------------------------------------
MEXICO (1.5%)
MULTI-MEDIA (0.4%)
600 Grupo Televisa SA GDR* 32,475
--------
RETAIL (0.6%)
2,400 Wal-Mart de Mexico de CV SA ADR* 57,804
--------
TELECOMMUNICATIONS (0.5%)
800 Telefonos De Mexico SA de CV ADR 43,150
--------
TOTAL MEXICO 133,429
--------
--------------------------------------------------------------------------------
NETHERLANDS (9.7%)
BANKING (1.0%)
3,717 ABN AMRO Holding NV 86,014
--------
CHEMICALS (1.3%)
2,500 Akzo Nobel NV 113,690
--------
FINANCIAL SERVICES (0.9%)
2,744 Fortis NV 83,734
--------
FOOD & BEVERAGE (2.7%)
2,383 Heineken NV 129,276
4,000 Koninklijke Ahold NV 116,060
--------
245,336
--------
LUXURY GOODS (1.2%)
1,100 Gucci Group 107,227
--------
OIL & GAS (2.1%)
3,078 Royal Dutch Petroleum Co. 182,346
--------
SEMICONDUCTOR MANUFACTURER (0.5%)
1,684 ASM Lithography Holding NV* 45,978
--------
TOTAL NETHERLANDS 864,325
--------
--------------------------------------------------------------------------------
RUSSIA (0.2%)
OIL & GAS (0.2%)
400 OAO Lukoil Holding ADR 21,360
--------
--------------------------------------------------------------------------------
SINGAPORE (1.2%)
BANKING (0.8%)
6,000 DBS Group Holdings Ltd. 70,751
--------
MANUFACTURING (0.4%)
4,000 Venture Manufacturing Ltd. 38,736
--------
TOTAL SINGAPORE 109,487
--------
--------------------------------------------------------------------------------
SPAIN (3.6%)
BANKING (1.2%)
11,000 Banco Santander Central Hispano SA 106,481
--------
TELECOMMUNICATIONS (1.8%)
8,521 Telefonica SA* 162,296
--------
CONTINUED
15 NATIONWIDE
<PAGE> 18
STATEMENT OF INVESTMENTS GARTMORE INTERNATIONAL GROWTH FUND CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
SPAIN (CONTINUED)
UTILITIES (0.6%)
4,011 Iberdrola SA $ 48,993
--------
TOTAL SPAIN 317,770
--------
--------------------------------------------------------------------------------
SWEDEN (1.0%)
TELECOMMUNICATIONS EQUIPMENT
MANUFACTURER (1.0%)
6,752 Telefonaktiebolaget LM Ericsson AB B shares 89,625
--------
--------------------------------------------------------------------------------
SWITZERLAND (5.2%)
BANKING (1.5%)
700 Credit Suisse Group 131,195
--------
FOOD & BEVERAGE (1.2%)
52 Nestle SA 107,726
--------
INSURANCE (1.3%)
230 Zurich Financial Services AG 111,285
--------
PHARMACEUTICALS (1.2%)
12 Roche Holding AG 109,583
--------
TOTAL SWITZERLAND 459,789
--------
--------------------------------------------------------------------------------
TAIWAN (1.0%)
ELECTRONICS (0.3%)
3,500 Compal Electronics, Inc. GDR 26,661
--------
SEMICONDUCTORS (0.7%)
2,900 Taiwan Semiconductor Manufacturing Co. ADR* 65,794
--------
TOTAL TAIWAN 92,455
--------
--------------------------------------------------------------------------------
UNITED KINGDOM (19.9%)
ADVERTISING / MARKETING (1.5%)
9,996 WPP Group PLC 134,266
--------
BANKING (2.6%)
2,807 Barclays PLC 80,380
6,500 Royal Bank of Scotland Group PLC 146,016
--------
226,396
--------
COMPUTER EQUIPMENT (0.6%)
7,163 Cedar Group PLC 56,480
--------
COMPUTER SOFTWARE / SERVICES (2.0%)
1,167 Autonomy Corp. PLC* 58,565
4,120 Logica PLC 121,986
--------
180,551
--------
ELECTRONICS (2.1%)
9,844 ARM Holdings PLC* 97,203
9,442 Spirent PLC 87,612
--------
184,815
--------
FOOD & BEVERAGE (1.2%)
27,347 Tesco PLC 104,340
--------
INVESTMENT COMPANY (1.3%)
5,056 Amvescap PLC 113,064
--------
MULTI-MEDIA (0.6%)
25,844 Photo-Me International PLC 51,789
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
OIL & GAS (2.4%)
25,000 BP Amoco PLC $ 212,188
----------
REAL ESTATE INVESTMENT / MANAGEMENT (0.4%)
7,416 Regus PLC* 33,733
----------
SERVICES (1.1%)
11,264 Granada Compass PLC* 97,157
----------
TELECOMMUNICATIONS (4.1%)
7,000 Cable & Wireless PLC 99,106
64,989 Vodafone Group PLC 270,608
----------
369,714
----------
TOTAL UNITED KINGDOM 1,764,493
----------
TOTAL COMMON STOCKS (cost $9,100,890) 8,574,464
----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (3.4%)
--------------------------------------------------------------------------------
UNITED STATES
$301,000 Fifth Third Bank, 6.35%, 10/31/00, matures
11/01/00, Collateralized by $300,674 FHARM,
8.50%, 12/01/22, market value
$ 307,020
TOTAL REPURCHASE AGREEMENT (cost $301,000) 301,000
----------
TOTAL INVESTMENTS (cost $9,401,890) $8,875,464
==========
--------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
AB Aktiebolag (Swedish stock company)
ADR American Depository Receipt
AG Aktiengesellschaft (Austrian, German, or Swiss stock
companies)
CV Convertible
FHARM Federal Home Adjustable Rate Mortgage
(Federal Housing Administration)
GDR Global Depository Receipt
NV Naamloze Vennootschap (Dutch corporation)
Oyj Limited
PLC Public Limited Company (British or Irish)
SA Societe Anonyme (French or Swiss corporation)
SA Sociedad Anonima (Spanish or Portuguese corporation)
SpA Societa per Azioni (Italian corporation)
* DENOTES A NON-INCOME PRODUCING SECURITY.
** REPRESENTS A RESTRICTED SECURITY ACQUIRED AND ELIGIBLE FOR RESALE UNDER
RULE 144A, WHICH LIMITS THE RESALE TO CERTAIN QUALIFIED BUYERS. THESE
SECURITIES WERE DEEMED LIQUID PURSUANT TO PROCEDURES APPROVED BY THE BOARD OF
TRUSTEES.
COST FOR FEDERAL INCOME TAX PURPOSES: $9,495,976.
SECURITIES DENOMINATED IN FOREIGN CURRENCIES ARE SHOWN AT THE U.S. DOLLAR COST
AND VALUE.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $8,878,078.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
16 NATIONWIDE
<PAGE> 19
[PHOTO]
GARTMORE FUNDS
--------------------------------------------------------------------------------
GARTMORE GLOBAL LEADERS FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the two-month period ended October 31, 2000, the Gartmore Global Leaders
Fund returned -8.80%(a) versus -6.88% for the MSCI World Index, the benchmark
index. The Fund commenced operations on August 30, 2000.
Regional asset allocation added to Fund performance, while stock selection
detracted from returns. In particular, information technology stocks reduced the
Fund's performance. Within the technology sector, the Fund placed significant
emphasis on software companies such as Veritas Software and Microsoft, which
outperformed the benchmark. However, their positive contributions were not
enough to offset the poor performance of other technology holdings, such as
Cisco Systems, Lucent Technologies and Samsung Electronics.
Portfolio holdings in the health care and consumer staples sectors
contributed positively to performance--for example, American Home Products,
Medtronic, Johnson & Johnson and Pfizer added value. Conversely, holdings in the
consumer discretionary, industrials and telecommunications sectors posted
disappointing returns and undercut overall portfolio value.
During the period, the Fund's top performing security was Verizon
Communications. In addition to its wireless business, Verizon benefited from its
strong position as a local carrier within the New York metropolitan area. The
portfolio's worst performer, Lucent Technologies, suffered from a series of
earnings downgrades.
Each of the Fund's five largest holdings outperformed the Index. General
Electric's price was flat over the period, but rose relative to the Index. GE's
relative strength reflected positive sentiment towards the company's strong
growth and diversified operations (50% of which are financial), as well as a
growing shortage of power turbine suppliers. Exxon Mobil benefited from firmer
oil prices and strong management. Amvescap rose on positive news stemming from
its acquisition of UK fund manager Perpetual. Microsoft and Pfizer fell slightly
in absolute terms, but rose relative to the Index. Microsoft benefited from the
US Supreme Court's decision to leave its antitrust case at the appeals level,
while Pfizer's relative strength reflected an overall positive sentiment towards
pharmaceuticals.
The Fund's largest sector overweighting, information technology, was
substantially reduced. As part of this reduction, we sold Sony. Sony suffers
from delivery problems related to its key new product, PlayStation 2. On the
other hand, the Fund added to its overweight position in the health care sector
and increased exposure to financials, where we still remain underweighted.
Hartford Financial Services was a key acquisition in this area as we believe the
company stands to benefit from firmer rates within the insurance industry.
On a regional basis, we maintain a small overweight position in Japan and in
Emerging Markets. We feel these regions have the best overall potential for
delivering unexpected earnings growth.
PORTFOLIO MANAGER: GARTMORE GLOBAL PARTNERS-SUBADVISER
(a) Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $4,534,428
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
[PIEGRAPH]
Repurchase Agreement 8.3%
Common Stock 91.7%
AVERAGE ANNUAL TOTAL RETURN
(For Period Ended October 31, 2000)*
CLASS A CLASS B INSTITUTIONAL
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) SERVICE CLASS(3)
--------------------------------------------------------------------------------
Life* -8.80% -14.04% -8.90% -13.46% -8.80%
--------------------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* Fund commenced operations on August 30, 2000.
** These returns do not reflect the effects of sales charge.
(1) A 5.75% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted.
The CDSC declines to 0% after 6 years.
(3) Not subject to any sales charges.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE
[LINEGRAPH]
<TABLE>
<CAPTION>
Class A Class B Institutional Service Class MSCI World CPI
<S> <C> <C> <C> <C> <C>
8/31/00 $9425 $10000 $10000 $10000 $10000
10/31/00 $8596 $ 8654 $ 9120 $ 9312 $10084
</TABLE>
Comparative performance of $10,000 invested in Gartmore Global
Leaders Fund, the Morgan Stanley Capital International World Index (MSCI
World)(b), and the Consumer Price Index (CPI)(c) since inception. Unlike our
Fund, these indices do not reflect any fees, expenses, or sales charges.
(b) The MSCI World is an index that has developing countries' securities and
represents the local market of that security.
(c) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
17 NATIONWIDE
<PAGE> 20
STATEMENT OF INVESTMENTS GARTMORE GLOBAL LEADERS FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (90.8%)
--------------------------------------------------------------------------------
AUSTRALIA (1.3%)
MULTI-MEDIA (1.3%)
5,500 News Corp. Ltd. $ 57,511
--------
--------------------------------------------------------------------------------
BRAZIL (0.8%)
TELECOMMUNICATIONS (0.8%)
700 Brasil Telecom Participacoes SA ADR 37,931
--------
--------------------------------------------------------------------------------
CANADA (2.1%)
MANUFACTURING (0.6%)
1,700 Bombardier, Inc. 26,659
--------
OIL & GAS (0.5%)
1,100 Suncor Energy, Inc. 21,428
--------
TELECOMMUNICATIONS (1.0%)
1,100 Nortel Networks Corp. 49,770
--------
TOTAL CANADA 97,857
--------
--------------------------------------------------------------------------------
FRANCE (4.6%)
ELECTRONICS (0.7%)
500 Alcatel SA 30,473
--------
HEALTH & PERSONAL CARE (1.0%)
600 L'Oreal SA 45,773
--------
OIL & GAS (0.9%)
300 Total Fina Elf SA 42,874
--------
PHARMACEUTICALS (1.1%)
700 Aventis SA 50,434
--------
UTILITIES (0.9%)
260 Suez Lyonnaise Des Eaux SA 39,626
--------
TOTAL FRANCE 209,180
--------
--------------------------------------------------------------------------------
GERMANY (2.9%)
COMPUTER SOFTWARE / SERVICES (1.4%)
400 SAP AG 65,404
--------
INSURANCE (1.5%)
200 Allianz AG 67,897
--------
TOTAL GERMANY 133,301
--------
--------------------------------------------------------------------------------
IRELAND (2.7%)
BANKING (1.1%)
6,400 Bank of Ireland 48,309
--------
MANUFACTURING (0.8%)
2,500 C.R.H. PLC 37,890
--------
PHARMACEUTICALS (0.8%)
700 Elan Corp. Ltd. ADR* 36,356
--------
TOTAL IRELAND 122,555
--------
--------------------------------------------------------------------------------
ITALY (0.8%)
TELECOMMUNICATIONS (0.8%)
4,500 Telecom Italia Mobile SpA 38,220
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
JAPAN (12.0%)
CHEMICALS (2.7%)
10,000 Asahi Chemical Industry Co. Ltd. $ 61,913
1,000 Takeda Chemical Industries Ltd. 65,850
--------
127,763
--------
COMPUTER EQUIPMENT (0.8%)
2,000 Fujitsu Ltd. 35,609
--------
ELECTRONICS (3.3%)
300 Kyocera Corp. 39,016
2,000 Matsushita Electrical Industrial Co. Ltd. 58,066
1,000 Nec Corp. 19,050
3,000 Sharp Corp. 38,192
--------
154,324
--------
FINANCIAL SERVICES (1.4%)
3,000 Nomura Securities Co. 63,607
--------
MANUFACTURING (0.8%)
5,000 Nsk Ltd. 35,994
--------
PHARMACEUTICALS (1.0%)
1,000 Yamanouchi Pharmaceutical Co. Ltd. 45,244
--------
SERVICES (0.8%)
500 Secom Co. Ltd. 35,627
--------
TELECOMMUNICATIONS (0.8%)
4 Nippon Telegraph & Telephone Corp. 36,378
--------
TOYS (0.4%)
100 Nintendo Co. Ltd. 16,531
--------
TOTAL JAPAN 551,077
--------
--------------------------------------------------------------------------------
NETHERLANDS (4.2%)
ELECTRONICS (1.2%)
1,400 Philips Electronics NV 54,956
--------
FOOD / BEVERAGE (1.9%)
800 Heineken NV 43,399
1,600 Koninklijke Ahold AG 46,424
--------
89,823
--------
LUXURY GOODS (1.1%)
500 Gucci Group NV 48,740
--------
TOTAL NETHERLANDS 193,519
--------
--------------------------------------------------------------------------------
SPAIN (0.9%)
TELECOMMUNICATIONS (0.9%)
2,200 Telefonica SA* 41,902
--------
--------------------------------------------------------------------------------
SWEDEN (0.4%)
TELECOMMUNICATIONS (0.4%)
1,400 Telefonaktiebolaget LM Ericsson AB 18,583
--------
--------------------------------------------------------------------------------
SWITZERLAND (4.1%)
FINANCIAL SERVICES (1.5%)
240 Credit Suisse Group 44,981
5 Julius Baer Holding AG 24,749
--------
69,730
--------
CONTINUED
18 NATIONWIDE
<PAGE> 21
[PHOTO]
STATEMENT OF INVESTMENTS GARTMORE GLOBAL LEADERS FUND CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
SWITZERLAND (CONTINUED)
FOOD / BEVERAGE (1.1%)
25 Nestle SA $ 51,791
--------
PHARMACEUTICALS (1.5%)
45 Novartis AG 68,248
--------
TOTAL SWITZERLAND 189,769
--------
--------------------------------------------------------------------------------
UNITED KINGDOM (9.1%)
ADVERTISING / MARKETING (1.5%)
5,000 WPP Group PLC 67,160
--------
FINANCIAL SERVICES (2.2%)
4,500 Amvescap PLC 100,630
--------
INSURANCE (1.3%)
4,500 Commercial Union PLC 60,248
--------
MINING (1.1%)
3,000 Rio Tinto PLC 48,573
--------
OIL & GAS (1.5%)
8,500 Shell Transportation & Trading Co. PLC 68,441
--------
TELECOMMUNICATIONS (1.5%)
17,000 Vodafone Group PLC 70,786
--------
TOTAL UNITED KINGDOM 415,838
--------
--------------------------------------------------------------------------------
UNITED STATES (44.9%)
BROADCASTING & TELEVISION (1.4%)
1,100 Viacom, Inc.* 62,563
--------
CIRCUIT BOARDS (1.1%)
900 Jabil Circuit, Inc.* 51,356
--------
COMPUTER EQUIPMENT (1.2%)
1,800 Compaq Computer Corp. 54,738
--------
COMPUTER SOFTWARE / SERVICES (9.0%)
1,200 Cisco Systems, Inc.* 64,650
600 Commerce One, Inc.* 38,513
600 Electronic Computer Systems Corp. 28,163
600 EMC Corp.* 53,438
150 I2 Technologies, Inc.* 25,500
1,500 Microsoft Corp.* 103,312
2,000 Oracle Corp. * 66,000
200 Veritas Software Corp. * 28,203
--------
407,779
--------
ELECTRICAL EQUIPMENT (2.8%)
2,300 General Electric Co. 126,068
--------
ELECTRONICS (2.4%)
1,200 Intel Corp. 54,000
1,100 Zoran Corp.* 55,138
--------
109,138
--------
ENERGY (2.4%)
700 Calpine Corp.* 55,256
1,100 Constellation Energy Group 45,856
400 Southern Energy, Inc.* 10,900
--------
112,012
--------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------------------------
UNITED STATES (CONTINUED)
FINANCIAL SERVICES (7.2%)
300 American International Group $ 29,400
1,100 Chase Manhattan Corp. 50,050
1,700 Citigroup, Inc. 89,463
1,000 Hartford Financial Services Group 74,438
1,200 Merrill Lynch & Co. Inc. 84,000
----------
327,351
----------
FOOD / BEVERAGE (1.1%)
800 Coca-Cola Co. 48,300
----------
HEALTH & PERSONAL CARE (1.4%)
700 Johnson & Johnson 64,488
----------
MEDICAL EQUIPMENT & SUPPLIES (1.5%)
1,300 Medtronic, Inc. 70,606
----------
OIL & GAS (2.3%)
1,200 Exxon Mobil Corp. 107,024
----------
PHARMACEUTICALS (3.9%)
800 American Home Products Corp. 50,800
1,000 Incyte Pharmaceutical, Inc.* 36,625
2,100 Pfizer, Inc. 90,693
----------
178,118
----------
RETAIL (3.1%)
1,500 Home Depot, Inc. 64,500
1,700 Wal-Mart Stores, Inc. 77,138
----------
141,638
----------
TELECOMMUNICATIONS (4.1%)
400 Alltel Corp. 25,775
200 Ciena Corp.* 21,025
1,600 Lucent Technologies, Inc. 37,300
800 Nextel Communications, Inc.* 30,750
1,300 Verizon Communications 75,156
----------
190,006
----------
TOTAL UNITED STATES 2,051,185
----------
TOTAL COMMON STOCK (cost $4,467,395) 4,158,428
----------
CONTINUED
19 NATIONWIDE
<PAGE> 22
STATEMENT OF INVESTMENTS GARTMORE GLOBAL LEADERS FUND CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (8.2%)
--------------------------------------------------------------------------------
UNITED STATES
$376,000 Fifth Third Bank, 6.35%, 10/31/00, matures
11/1/00, Collateralized by $383,520
FNARM Pool #86794, 6.48%, 03/01/18,
market value $383,520
TOTAL REPURCHASE AGREEMENT (cost $376,000) $ 376,000
----------
TOTAL INVESTMENTS (cost $4,843,395) $4,534,428
==========
--------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following
AB Aktiebolag (Swedish stock company)
ADR American Depository Receipt
AG Aktiengesellschaft (Austrian, German, or Swiss stock
companies)
FNARM Federal National Adjusted Rate Mortgage (Fannie Mae Agency)
NV Naamloze Vennootschap (Dutch corporation)
PLC Public Limited Company (British or Irish)
SA Societe Anonyme (French or Swiss corporation)
SA Sociedad Anonima (Spanish or Portuguese corporation)
SpA Societa per Azioni (Italian corporation)
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSE $4,844,861.
SECURITIES DENOMINATED IN FOREIGN CURRENCIES ARE SHOWN AT THE U.S. DOLLAR COST
AND VALUE.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $4,582,293.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
20 NATIONWIDE
<PAGE> 23
[PHOTO]
STATEMENTS OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
GARTMORE
GLOBAL
GARTMORE TECHNOLOGY AND
GROWTH 20 COMMUNICATIONS
FUND FUND
<S> <C> <C>
ASSETS:
Investments in securities, at value (cost $2,865,088, $7,759,255 respectively) $ 2,977,443 $ 7,649,138
Repurchase Agreements, at cost (cost $0, $1,793,000 respectively) - 1,793,000
Cash - 690
Receivable for investment securities sold 405,739 412,239
Receivable for Fund shares sold 4,071 -
Receivable from adviser 17,676 16,371
Interest and dividends receivable - 820
Prepaid and other assets 3,054 42
----------- -----------
Total Assets $ 3,407,983 $ 9,872,300
----------- -----------
LIABILITIES:
Cash overdraft 88,079 -
Payable for investment securities purchased 284,767 1,027,976
Foreign currency, at value - 61,926
Accrued expenses and other payables:
Investment advisory fees 2,148 6,438
Fund administration fees 6,352 6,352
Transfer agent fees 710 714
Distribution fees 1,012 2,662
Other 32,532 34,699
----------- -----------
Total Liabilities $ 415,600 $ 1,140,767
----------- -----------
NET ASSETS $ 2,992,383 $ 8,731,533
=========== ===========
NET ASSETS:
Capital 2,747,551 8,370,517
Accumulated net investment income - -
Net unrealized appreciation (depreciation) from investments and foreign currencies 112,355 (110,540)
Accumulated net realized gains from investment transactions and foreign currencies 132,477 471,556
----------- -----------
NET ASSETS $ 2,992,383 $ 8,731,533
=========== ===========
NET ASSETS:
Class A Shares 1,410,990 4,602,483
Class B Shares 804,076 2,275,121
Institutional Service Class Shares 777,317 1,853,929
----------- -----------
Total $ 2,992,383 $ 8,731,533
=========== ===========
SHARES OUTSTANDING (unlimited number of shares authorized):
Class A Shares 121,200 414,007
Class B Shares 69,189 205,162
Institutional Service Class Shares 66,667 166,667
----------- -----------
Total 257,056 785,836
=========== ===========
NET ASSET VALUE:
Class A Shares $ 11.64 $ 11.12
Class B Shares $ 11.62 $ 11.09
Institutional Service Class Shares $ 11.66 $ 11.12
MAXIMUM OFFERING PRICE (100%/(100%-Maximum Sales Charge) of net asset value
adjusted to nearest cent) per share:
Class A Shares* $ 12.35 $ 11.80
Class B Shares** $ 11.62 $ 11.09
Institutional Service Class Shares*** $ 11.66 $ 11.12
----------- -----------
Maximum sales charge - Class A Shares 5.75% 5.75%
=========== ===========
</TABLE>
* CLASS A SHARES INCLUDES A FRONT-END SALES CHARGE.
** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD AND DOES NOT HAVE A FRONT-END SALES CHARGE.
*** INSTITUTIONAL SERVICE CLASS DOES NOT HAVE ANY SALES CHARGE.
CONTINUED
21 NATIONWIDE
<PAGE> 24
STATEMENTS OF ASSETS AND LIABILITIES CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
GARTMORE GARTMORE
EMERGING INTERNATIONAL GARTMORE
MARKETS GROWTH GLOBAL LEADERS
FUND FUND FUND
ASSETS:
<S> <C> <C> <C>
Investments in securities, at value (cost $4,784,342, $9,100,890, $4,467,395, respectively) $ 3,905,140 $ 8,574,464 $ 4,158,428
Repurchase Agreements, at value (cost $154,000, $301,000, $376,000, respectively) 154,000 301,000 376,000
Foreign currency, at value 3,092 - 352
Cash 624 613 339
Receivable for investment securities sold 27,303 260,426 183,559
Receivable from adviser 19,647 17,576 20,945
Interest and dividends receivable 422 4,541 2,927
Prepaid and other assets - 492 103
----------- ----------- -----------
Total Assets $ 4,110,228 $ 9,159,112 $ 4,742,653
----------- ----------- -----------
LIABILITIES:
Payable for investment securities purchased - 233,624 122,944
Payable for foreign currency, at value - 4,674 -
Accrued expenses and other payables:
Investment advisory fees 4,010 7,559 3,848
Fund administration fees 6,352 6,352 6,352
Transfer agent fees 272 293 274
Distribution fees 1,452 3,146 1,601
Other 25,717 25,386 25,341
----------- ----------- -----------
Total Liabilities $ 37,803 $ 281,034 $ 160,360
----------- ----------- -----------
NET ASSETS $ 4,072,425 $ 8,878,078 $ 4,582,293
=========== =========== ===========
NET ASSETS:
Capital 5,012,628 9,958,736 5,016,063
Accumulated (distribution in excess of) net investment income (1,690) 1 -
Net unrealized appreciation (depreciation) from investments and foreign currencies (879,208) (526,551) (308,059)
Accumulated net realized losses from Investment transactions and foreign currencies (59,305) (554,108) (125,711)
----------- ----------- -----------
NET ASSETS $ 4,072,425 $ 8,878,078 $ 4,582,293
=========== =========== ===========
NET ASSETS:
Class A Shares 1,366,406 2,974,699 1,542,015
Class B Shares 1,352,509 2,949,729 1,519,454
Institutional Service Class Shares 1,353,510 2,953,650 1,520,824
----------- ----------- -----------
Total $ 4,072,425 $ 8,878,078 $ 4,582,293
=========== =========== ===========
SHARES OUTSTANDING (unlimited number of shares authorized):
Class A Shares 168,540 335,909 169,084
Class B Shares 166,934 333,447 166,781
Institutional Service Class Shares 166,891 333,333 166,667
----------- ----------- -----------
Total 502,365 1,002,689 502,532
=========== =========== ===========
NET ASSET VALUE:
Class A Shares $ 8.11 $ 8.86 $ 9.12
Class B Shares $ 8.10 $ 8.85 $ 9.11
Institutional Service Class Shares $ 8.11 $ 8.86 $ 9.12
MAXIMUM OFFERING PRICE (100%/(100%-Maximum Sales Charge) of net asset value
adjusted to nearest cent) per share:
Class A Shares* $ 8.60 $ 9.40 $ 9.68
Class B Shares** $ 8.10 $ 8.85 $ 9.11
Institutional Service Class Shares*** $ 8.11 $ 8.86 $ 9.12
----------- ----------- -----------
Maximum sales charge - Class A Shares 5.75% 5.75% 5.75%
=========== =========== ===========
</TABLE>
* CLASS A SHARES INCLUDE A FRONT-END SALES CHARGE.
** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD AND DOES NOT HAVE A FRONT-END SALES CHARGE.
*** INSTITUTIONAL SERVICE CLASS DOES NOT HAVE ANY SALES CHARGE.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
22 NATIONWIDE
<PAGE> 25
[PHOTO]
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
FOR THE PERIOD FROM JUNE 30, 2000 TO OCTOBER 31, 2000(a)
<TABLE>
<CAPTION>
GARTMORE GLOBAL
GARTMORE TECHNOLOGY AND
GROWTH 20 COMMUNICATIONS
FUND FUND
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest income $ 7,531 $ 13,145
Dividend income 202 805
Withholding tax - (77)
--------- ---------
Total Income 7,733 13,873
--------- ---------
EXPENSES:
Investment advisory fees 5,731 20,607
Fund administration fees 24,795 24,795
Custodian fees 2,000 2,000
Distribution fees 3,446 8,684
Professional fees 8,559 8,559
Trustees' fees and expenses 10 10
Transfer agent fees 504 543
Registration and filing fees 15,000 15,000
Shareholders' reports 12,104 12,105
Other 2,707 6,199
--------- ---------
Total expenses before waived or reimbursed expenses 74,856 98,502
Expenses waived or reimbursed (64,181) (59,414)
--------- ---------
Net expenses 10,675 39,088
--------- ---------
Net investment loss (2,942) (25,215)
========= =========
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains on investment transactions
and foreign currencies 132,477 479,989
Net change in unrealized appreciation/depreciation
on investments and foreign currencies 112,355 (110,540)
--------- ---------
Net realized/unrealized gains on investments
and foreign currencies 244,832 369,449
--------- ---------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $ 241,890 $ 344,234
========= =========
</TABLE>
(a) COMMENCED OPERATIONS ON JUNE 30, 2000.
CONTINUED
23 NATIONWIDE
<PAGE> 26
STATEMENTS OF OPERATIONS CONTINUED
--------------------------------------------------------------------------------
FOR THE PERIOD FROM AUGUST 30, 2000 TO OCTOBER 31, 2000(a)
<TABLE>
<CAPTION>
GARTMORE
GARTMORE INTERNATIONAL GARTMORE
EMERGING MARKETS GROWTH GLOBAL LEADERS
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest Income $ 8,028 $ 20,979 $ 9,639
Dividend income 5,655 10,343 4,833
Withholding tax - (942) (455)
----------- ----------- -----------
Total Income 13,683 30,380 14,017
----------- ----------- -----------
EXPENSES:
Investment advisory fees 8,441 15,417 7,813
Fund administration fees 12,500 12,500 12,500
Custodian fees 600 600 600
Distribution fees 3,056 6,420 3,252
Professional fees 10,000 10,000 10,000
Trustees' fees and expenses 10 10 10
Transfer agent fees 296 330 298
Registration and filing fees 15,000 15,000 15,000
Shareholders' reports 5,000 5,000 5,000
Other 1,160 1,160 1,160
----------- ----------- -----------
Total expenses before waived or reimbursed expenses 56,063 66,437 55,633
Expenses waived or reimbursed (39,046) (35,509) (41,328)
----------- ----------- -----------
Net expenses 17,017 30,928 14,305
----------- ----------- -----------
NET INVESTMENT LOSS (3,334) (548) (288)
=========== =========== ===========
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) on investment transactions
and foreign currencies (61,645) (619,236) (132,360)
Net change in unrealized appreciation/depreciation
on investments and foreign currencies (879,208) (526,551) (308,059)
----------- ----------- -----------
Net realized/unrealized gains (losses) on investments
and foreign currencies (940,853) (1,145,787) (440,419)
----------- ----------- -----------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $ (944,187) $(1,146,335) $ (440,707)
=========== =========== ===========
</TABLE>
(a) COMMENCED OPERATIONS ON AUGUST 30, 2000.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
24 NATIONWIDE
<PAGE> 27
[PHOTO]
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
FOR THE PERIOD FROM JUNE 30, 2000 TO OCTOBER 31, 2000 (a)
<TABLE>
<CAPTION>
GARTMORE GLOBAL
GARTMORE TECHNOLOGY &
GROWTH 20 COMMUNICATIONS
FUND FUND
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment (loss) $ (2,942) $ (25,215)
Net realized gains on investment transactions
and foreign currencies 132,477 479,989
Net change in unrealized appreciation/depreciation on
investments and foreign currencies 112,355 (110,540)
---------- ----------
Change in net assets resulting from operations 241,890 344,234
---------- ----------
CAPITAL TRANSACTIONS:*
Proceeds from shares issued 3,212,067 8,469,762
Cost of shares redeemed (461,574) (82,463)
---------- ----------
Change in net assets from capital transactions 2,750,493 8,387,299
---------- ----------
Change in net assets 2,992,383 8,731,533
NET ASSETS:
Beginning of period - -
---------- ----------
End of period $2,992,383 $8,731,533
---------- ----------
SHARE TRANSACTIONS:*
Sold 298,295 792,365
Reinvested - -
Redeemed (41,239) (6,529)
---------- ----------
Change in shares 257,056 785,836
========== ==========
</TABLE>
* BOTH THE CAPITAL TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT COMBINED
DATA FOR ALL CLASSES OF SHARES.
(a) COMMENCED OPERATIONS ON JUNE 30, 2000.
CONTINUED
25 NATIONWIDE
<PAGE> 28
STATEMENTS OF CHANGES IN NET ASSETS CONTINUED
--------------------------------------------------------------------------------
FOR THE PERIOD FROM AUGUST 30, 2000 TO OCTOBER 31, 2000 (a)
<TABLE>
<CAPTION>
GARTMORE
GARTMORE INTERNATIONAL GARTMORE
EMERGING MARKETS GROWTH GLOBAL LEADERS
FUND FUND FUND
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss $ (3,334) $ (548) $ (288)
Net realized losses on investment transactions
and foreign currencies (61,645) (619,236) (132,360)
Net change in unrealized appreciation/depreciation on
investments and foreign currencies (879,208) (526,551) (308,059)
------------ ------------ ------------
Change in net assets resulting from operations (944,187) (1,146,335) (440,707)
------------ ------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
In excess of net investment income (1,612) - -
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
In excess of net investment income (962) - -
DISTRIBUTIONS TO INSTITUTIONAL SERVICE CLASS SHAREHOLDERS FROM:
In excess of net investment income (1,970) - -
------------ ------------ ------------
Change in net assets from shareholder distributions (4,544) - -
------------ ------------ ------------
CAPITAL TRANSACTIONS:*
Proceeds from shares issued 5,026,808 10,037,923 5,023,000
Dividends reinvested 4,544 - -
Cost of shares redeemed (10,196) (13,510) -
------------ ------------ ------------
Change in net assets from capital transactions 5,021,156 10,024,413 5,023,000
------------ ------------ ------------
Change in net assets 4,072,425 8,878,078 4,582,293
------------ ------------ ------------
NET ASSETS:
Beginning of period - - -
End of period $ 4,072,425 $ 8,878,078 $ 4,582,293
SHARE TRANSACTIONS:*
Sold 503,164 1,004,247 502,532
Reinvested 518 - -
Redeemed (1,317) (1,558) -
------------ ------------ ------------
Change in shares 502,365 1,002,689 502,532
============ ============ ============
</TABLE>
* BOTH THE CAPITAL TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT COMBINED
DATA FOR ALL CLASSES OF SHARES.
(a) COMMENCED OPERATIONS ON AUGUST 30, 2000.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
26 NATIONWIDE
<PAGE> 29
[PHOTO]
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
GARTMORE GROWTH 20 FUND
INSTITUTIONAL SERVICE
PERIOD FROM JUNE 30, 2000 TO OCTOBER 31, 2000 (a) CLASS A SHARES CLASS B SHARES CLASS SHARES
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 10.00
--------- --------- ---------
INVESTMENT ACTIVITIES:
Net investment loss (0.01) (0.03) -
Net realized and unrealized gain 1.65 1.65 1.66
--------- --------- ---------
Total investment activities 1.64 1.62 1.66
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 11.64 $ 11.62 $ 11.66
========= ========= =========
Total Return (excluding any sales charges) (b) 16.40% 16.20% 16.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) $ 1,411 $ 804 $ 777
Ratio of expenses to average net assets (c) 1.20% 1.70% 0.75%
Ratio of net investment income to average net assets (c) (0.30%) (0.83%) 0.12%
Ratio of expenses to average net assets* (c) 8.29% 9.20% 8.14%
Portfolio turnover rate (b,d) 124.62% 124.62% 124.62%
</TABLE>
<TABLE>
<CAPTION>
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATION FUND
INSTITUTIONAL SERVICE
PERIOD FROM JUNE 30, 2000 TO OCTOBER 31, 2000 (a) CLASS A SHARES CLASS B SHARES CLASS SHARES
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 10.00
INVESTMENT ACTIVITIES:
Net investment loss (0.02) (0.06) (0.03)
Net realized and unrealized gain 1.14 1.15 1.15
--------- --------- ---------
Total investment activities 1.12 1.09 1.12
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 11.12 $ 11.09 $ 11.12
========= ========= =========
Total Return (excluding any sales charges) (b) 11.20% 10.90% 11.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) $ 4,602 $ 2,275 $ 1,854
Ratio of expenses to average net assets (c) 1.73% 2.33% 1.40%
Ratio of net investment income to average net assets (c) (1.07%) (1.69%) (0.76%)
Ratio of expenses to average net assets* (c) 4.43% 5.18% 4.17%
Portfolio turnover rate (b,d) 149.08% 149.08% 149.08%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
(a) PERIOD FROM COMMENCEMENT OF OPERATIONS.
(b) NOT ANNUALIZED.
(c) ANNUALIZED.
(d) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
27 NATIONWIDE
<PAGE> 30
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
GARTMORE EMERGING MARKETS FUND
INSTITUTIONAL SERVICE
PERIOD FROM AUGUST 30, 2000 TO OCTOBER 31, 2000 (a) CLASS A SHARES CLASS B SHARES CLASS SHARES
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 10.00
--------- --------- ---------
INVESTMENT ACTIVITIES:
Net investment income (loss) (0.01) (0.01) -
Net realized and unrealized (loss) (1.87) (1.88) (1.88)
--------- --------- ---------
Total investment activities (1.88) (1.89) (1.88)
--------- --------- ---------
DISTRIBUTIONS:
In excess of net investment income (0.01) (0.01) (0.01)
--------- --------- ---------
Total distributions (0.01) (0.01) (0.01)
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 8.11 $ 8.10 $ 8.11
========= ========= =========
Total Return (excluding any sales charges) (b) (18.90%) (19.00%) (18.90%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) $ 1,366 $ 1,353 $ 1,354
Ratio of expenses to average net assets (c) 2.15% 2.75% 1.82%
Ratio of net investment income to average net assets (c) (0.35%) (0.95%) (0.02%)
Ratio of expenses to average net assets* (c) 7.24% 7.96% 6.95%
Portfolio turnover rate (b,d) 10.88% 10.88% 10.88%
GARTMORE INTERNATIONAL GROWTH FUND
INSTITUTIONAL SERVICE
PERIOD FROM AUGUST 30, 2000 TO OCTOBER 31, 2000 (a) CLASS A SHARES CLASS B SHARES CLASS SHARES
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 10.00
--------- --------- ---------
INVESTMENT ACTIVITIES:
Net investment income (loss) - (0.01) 0.01
Net realized and unrealized (loss) (1.14) (1.14) (1.15)
--------- --------- ---------
Total investment activities (1.14) (1.15) (1.14)
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 8.86 $ 8.85 $ 8.86
========= ========= =========
Total Return (excluding any sales charges) (b) (11.40%) (11.50%) (11.40%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) $ 2,975 $ 2,950 $ 2,954
Ratio of expenses to average net assets (c) 1.85% 2.45% 1.52%
Ratio of net investment income to average net assets (c) 0.05% (0.54%) 0.39%
Ratio of expenses to average net assets* (c) 4.01% 4.75% 3.75%
Portfolio turnover rate (b,d) 46.31% 46.31% 46.31%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
(a) PERIOD FROM COMMENCEMENT OF OPERATIONS.
(b) NOT ANNUALIZED.
(c) ANNUALIZED.
(d) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
28 NATIONWIDE
<PAGE> 31
[PHOTO]
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
GARTMORE GLOBAL LEADERS FUND
INSTITUTIONAL SERVICE
PERIOD FROM AUGUST 30, 2000 TO OCTOBER 31, 2000 (a) CLASS A SHARES CLASS B SHARES CLASS SHARES
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 10.00
--------- --------- ---------
INVESTMENT ACTIVITIES:
Net investment income (loss) - - 0.01
Net realized and unrealized (loss) (0.88) (0.89) (0.89)
--------- --------- ---------
Total investment activities (0.88) (0.89) (0.88)
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 9.12 $ 9.11 $ 9.12
========= ========= =========
Total Return (excluding any sales charges) (b) (8.80%) (8.90%) (8.80%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (000) $ 1,542 $ 1,519 $ 1,521
Ratio of expenses to average net assets (c) 1.68% 2.26% 1.36%
Ratio of net investment income to average net assets (c) 0.05% (0.53%) 0.37%
Ratio of expenses to average net assets* (c) 6.74% 7.47% 6.45%
Portfolio turnover rate (b,d) 21.59% 21.59% 21.59%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
(a) PERIOD FROM COMMENCEMENT OF OPERATIONS.
(b) NOT ANNUALIZED.
(c) ANNUALIZED.
(d) PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING AMONG THE CLASSES OF SHARES.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
29 NATIONWIDE
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
1. ORGANIZATION
Nationwide Mutual Funds ("NMF" or the "Trust") is an open-end management
investment company. NMF was created under the laws of Ohio as an Ohio business
trust pursuant to a Declaration of Trust dated as of October 31, 1997, as
subsequently amended, and is registered under the Investment Company Act of
1940, as amended. The Trust offers shares in thirty-three separate series, or
mutual funds, each with its own investment objective and strategies. This report
contains the financial statements and financial highlights of the five funds
listed below (individually, the "Fund", collectively, the "Funds"):
- Gartmore Growth 20 Fund (Growth 20)
- Gartmore Global Technology and Communications Fund (Global Technology and
Communications)
- Gartmore Emerging Markets Fund (Emerging Markets)
- Gartmore International Growth Fund (International Growth)
- Gartmore Global Leaders Fund (Global Leaders)
The Growth 20 and Global Technology and Communications Funds commenced
operations on June 30, 2000. The remaining Funds commenced operations on August
30, 2000.
The Funds currently offer Class A, Class B, and Institutional Service Class
shares. Class A and B shares of the Fund are available to all investors. The
Class A shares are purchased with a maximum 5.75% front-end sales load. The
Class B shares contain a 5.00% maximum deferred sales charge (known as a
contingent deferred sales charge or CDSC) if you sell your shares within six
years of purchase and contain a conversion feature to Class A shares after you
have held them for seven years. Sales charges are paid to the Fund's
distributor, Nationwide Advisory Services, Inc. (NAS), which either retains them
or pays a selling representative. The Institutional Service Class of shares have
no sales charges and are available to a limited group of investors, such as
insurance company separate accounts and tax-exempt employee benefit plans.
Class A and B shares pay distribution and/or service (12b-1) fees under a
Distribution Plan of 0.25% and 1.00%, respectively. These fees are either
retained or paid by NAS to brokers for distribution and shareholders services.
Class A and Institutional Service Class shares also pay administrative service
fees of up to 0.25%. These fees are paid to brokers and other entities that
provide administrative support services to the beneficial owners of the shares.
2. SIGNIFICANT ACCOUNTING POLICIES:
(a) SECURITIES VALUATION
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America. The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses for the
period. Actual results could differ from those estimates.
(1) Securities traded on a national securities exchange are valued at the
last quoted sale price as provided by an independent pricing agent.
Securities traded in the over-the-counter (OTC) market are valued at the
last quoted sale price, or if there is no sale price, the last quoted
bid price as provided by an independent pricing agent.
(2) U.S. Government securities are valued at the last quoted bid price as
provided by an independent pricing agent. All of the debt securities are
valued by a combination of daily quotes and matrix evaluations as
provided by an independent pricing agent.
(3) Each Fund may enter into repurchase agreements with member banks of the
Federal Deposit Insurance Corporation and with registered broker/dealers
that the adviser deems creditworthy under guidelines approved by the
Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed-upon date and price. The repurchase
price generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates, which may be more
or less than the rate on the underlying portfolio securities. The
seller, under a repurchase agreement, is required to maintain the value
of collateral held pursuant to the agreement at not less than the
repurchase price (including accrued interest). Securities subject to
repurchase agreements are held by the Funds' custodian, another
qualified custodian or in the Federal Reserve/Treasury book-entry
system. In the event of counterparty default, a Fund has the right to
use the collateral to offset losses incurred. There is potential for
loss to a Fund in the event the Fund is delayed or prevented from
exercising its rights to dispose of the collateral securities, including
the risk of a possible decline in the value of the underlying securities
during the period while the Fund seeks to assert its rights.
(4) Foreign Currency Transactions. Fluctuations in the value of investments
resulting from changes in foreign exchange rates are included with net
realized and unrealized gain or loss from investments.
30 NATIONWIDE
<PAGE> 33
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
Net realized gains or losses arise from sales of foreign currencies,
security transactions, and the difference between the amounts of
purchases and sales of securities, income receipts and expense payments
recorded on the Fund's books in the U.S. dollar equivalent of amounts
actually received or paid. Net unrealized gains or losses arise from
accounting records denominated in foreign currencies and then translated
into U.S. dollars.
(5) Forward Foreign Currency Contracts. The Funds may enter into forward
foreign currency exchange contracts (forward exchange contracts) which
are obligations to purchase or sell a foreign currency at a specified
rate on a certain date in the future. A net realized gain or loss would
be incurred if the value of the contract increases or decreases between
the date the contract is opened and the date it is closed. Forward
exchange contracts are marked to market daily and this change in value
is reflected in the Statement of Assets and Liabilities as a net
receivable/payable for foreign currency contracts sold/purchased.
At or before the closing of a forward exchange contract, a Fund may
either sell a portfolio security and make delivery of the currency, or
retain the security and fully or partially offset its contractual
obligation to deliver the currency by purchasing a second contract. If
the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund, at the time of execution of the offsetting
transaction, will incur a gain or loss to the extent that movement has
occurred in forward contract prices.
Forward exchange contracts can be used to hedge the risks associated
with commitments to purchase securities denominated in foreign
currencies for agreed amounts. The precise matching of forward exchange
contract amounts and the value of the securities involved generally will
not be possible because the value of such securities, measured in the
foreign currency, will change after the forward exchange contract has
been established. Thus, the Fund may need to purchase or sell foreign
currencies in the spot (cash) market to the extent such foreign
currencies are not covered by forward exchange contracts. The Fund could
be exposed to risk if a counter party is unable to meet the terms of a
forward exchange contract or if the value of the currency changes
unfavorably. The projection of short-term currency market movements is
difficult, and the successful execution of a short-term hedging strategy
is highly uncertain.
(6) Risks Associated with Foreign Securities and Currencies. Investments in
securities of foreign issuers carry certain risks not ordinarily
associated with investments in securities of domestic issuers. Such
risks include future political and economic developments, and the
possible imposition of exchange controls or other foreign governmental
laws and restrictions. In addition, with respect to certain countries,
there is the possibility of expropriation of assets, confiscatory
taxation, political or social instability or diplomatic developments
which could adversely affect investments in those countries.
Certain countries may also impose substantial restrictions on
investments in their capital markets by foreign entities, including
restrictions on investments in issuers of industries deemed sensitive to
relevant national interests. These factors may limit the investment
opportunities available in the Funds and result in a lack of liquidity
and a high price volatility with respect to securities of issuers from
developing countries.
(7) Futures contracts and options traded on a commodities exchange or board
of trade are valued the last sales price at the close of trading, or if
there was no sale, the quoted bid price at the close of trading. Futures
are not used for purposes other than hedging.
(8) Securities for which reliable market quotations are not available, or
for which an independent pricing agent does not provide a value or
provides a value that does not represent fair value in the judgement of
the Fund's Investment Adviser, are valued in accordance with procedures
authorized by the Trust's Board of Trustees.
(b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME
Securities transactions are recognized on the trade date. Dividend income is
recognized on the ex-dividend date. Interest income is recognized on an accrual
basis and includes, where applicable, the pro rata amortization/accretion of
premium or discount.
(c) FEDERAL INCOME TAXES
Each Fund's policy is to qualify as a regulated investment company under the
Internal Revenue Code, and to distribute substantially all taxable income, if
any, to its shareholders. Therefore no provision has been made for federal
income taxes as it is the intention of the Funds to continue such qualification.
To the extent net realized gains are offset through the application of a capital
loss carryover, they will not be distributed to shareholders and will be
retained by the applicable Fund. Withholding taxes have been paid or provided
for in accordance with the applicable tax rates and rules.
As of the fiscal year ended October 31, 2000, the Emerging Markets,
International Growth, and Global Leaders Funds had net capital loss carry
forwards of $51,927, $460,022, and $124,245, respectively. If unused they will
expire in 8 years. It is the intent of the Funds to use these carryforwards to
offset future capital gains.
31 NATIONWIDE
<PAGE> 34
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
(d) DISTRIBUTIONS TO SHAREHOLDERS
(1) Net investment income, if any, is paid quarterly and is recorded on the
ex-dividend date.
(2) Distributable net realized capital gains, if any, are declared and
distributed at least annually.
(3) Dividends and distributions to shareholders are determined in accordance
with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America. These
"book/tax" differences are considered either permanent or temporary in
nature. In accordance with AICPA (American Institute of Certified Public
Accountants) Statement of Position 93-2, permanent differences (i.e.
reclass of market discounts, gain/loss, paydowns, and distributions) are
reclassified within the capital accounts based on their nature for
federal income tax purposes; temporary differences do not require
reclassification. Dividends and distributions that exceed net investment
income and net realized gains for financial reporting purposes but not
for tax purposes are reported as dividends in excess of net investment
income and net realized gains. To the extent distributions exceed
current and accumulated earnings and profits for federal income tax
purposes, they are reported as distributions of paid-in-capital. These
reclassifications have no effect upon the net asset value of the
respective Funds. For the fiscal year ended October 31, 2000 the
following reclassifications were necessary:
CAPITAL PAID UNDISTRIBUTED UNDISTRIBUTED
IN EXCESS OF NET INVESTMENT CAPITAL
FUND PAR VALUE INCOME GAIN
--------------------------------------------------------------------------------
Growth 20 ($ 2,942) $ 2,942 $ -
Global Technology and
Communications (11,833) 25,215 (13,382)
Emerging Markets (8,528) 6,188 2,340
International Growth (65,677) 549 65,128
Global Leaders (6,937) 288 6,649
(e) EXPENSES
General expenses of the Trust, not directly attributable to a Fund or to any
class of shares, are charged to all funds of the Trust based upon each fund's
relative average net assets or some other appropriate basis, as approved by the
Trust's Board of Trustees. Once these expenses are allocated to a Fund, they are
allocated to the classes based on total shares outstanding of each class.
Direct expenses of a Fund are charged to that Fund and thus allocated to the
classes in the methods mentioned above.
Direct expenses of a class are allocated to that class unless otherwise directed
by the Trust's Board of Trustees. For example, distribution fees and
administrative servicing fees are borne by the specific class of shares to which
they apply.
32 NATIONWIDE
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
(f) CAPITAL SHARE TRANSACTIONS
Transactions in class level shares of the Funds were as follows:
<TABLE>
<CAPTION>
GLOBAL TECHNOLOGY AND
GROWTH 20 (a) COMMUNICATIONS (a)
-----------------------------------------
PERIOD FROM PERIOD FROM
JUNE 30, 2000 JUNE 30, 2000
CAPITAL TRANSACTIONS: TO OCTOBER 31, 2000 TO OCTOBER 31, 2000
---------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 1,847,984 $ 4,666,972
Distributions reinvested - -
Cost of shares redeemed (461,574) (81,963)
----------- -----------
Change in capital $ 1,386,410 $ 4,585,009
=========== ===========
CLASS B SHARES:
Proceeds from shares issued $ 696,915 $ 2,132,894
Distributions reinvested - -
Cost of shares redeemed - (500)
----------- -----------
Change in capital $ 696,915 $ 2,132,394
=========== ===========
INSTITUTIONAL SERVICE CLASS SHARES:
Proceeds from shares issued $ 667,168 $ 1,669,896
Distributions reinvested - -
Cost of shares redeemed - -
----------- -----------
Change in capital $ 667,168 $ 1,669,896
=========== ===========
----------------------------------------------------------------------------------
PERIOD FROM PERIOD FROM
SHARE TRANSACTIONS: JUNE 30, 2000 JUNE 30, 2000
TO OCTOBER 31, 2000 TO OCTOBER 31, 2000
----------------------------------------------------------------------------------
CLASS A SHARES:
Issued 162,439 420,496
Reinvested - -
Redeemed (41,239) (6,489)
----------- -----------
Change in shares 121,200 414,007
=========== ===========
CLASS B SHARES:
Issued 69,189 205,202
Reinvested - -
Redeemed - (40)
----------- -----------
Change in shares 69,189 205,162
=========== ===========
INSTITUTIONAL SERVICE CLASS SHARES:
Issued 66,667 166,667
Reinvested - -
Redeemed - -
----------- -----------
Change in shares 66,667 166,667
=========== ===========
----------------------------------------------------------------------------------
(a) PERIOD FROM COMMENCEMENT OF OPERATIONS.
</TABLE>
33 NATIONWIDE
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
INTERNATIONAL
EMERGING MARKETS GROWTH (a) GLOBAL LEADERS (a)
----------------------------------------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
JUNE 30, 2000 JUNE 30, 2000 AUGUST 30, 2000
CAPITAL TRANSACTIONS: TO OCTOBER 31, 2000 TO OCTOBER 31, 2000 TO OCTOBER 31, 2000
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 1,692,224 $ 3,370,256 $ 1,688,666
Distributions reinvested 1,612 - -
Cost of shares redeemed (10,196) (13,510) -
----------- ----------- -----------
Change in capital $ 1,683,640 $ 3,356,746 $ 1,688,666
=========== =========== ===========
CLASS B SHARES:
Proceeds from shares issued $ 1,667,917 $ 3,334,333 $ 1,667,667
Distributions reinvested 962 - -
Cost of shares redeemed - -
----------- ----------- -----------
Change in capital $ 1,668,879 $ 3,334,333 $ 1,667,667
=========== =========== ===========
INSTITUTIONAL SERVICE CLASS SHARES:
Proceeds from shares issued $ 1,666,667 $ 3,333,334 $ 1,666,667
Distributions reinvested 1,970 - -
Cost of shares redeemed - -
----------- ----------- -----------
Change in capital $ 1,668,637 $ 3,333,334 $ 1,666,667
=========== =========== ===========
-------------------------------------------------------------------------------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
JUNE 30, 2000 JUNE 30, 2000 AUGUST 30, 2000
SHARE TRANSACTIONS: TO OCTOBER 31, 2000 TO OCTOBER 31, 2000 TO OCTOBER 31, 2000
-------------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 169,673 337,467 169,084
Reinvested 184 -
Redeemed (1,317) (1,558) -
----------- ----------- -----------
Change in shares 168,540 335,909 169,084
=========== =========== ===========
CLASS B SHARES:
Issued 166,824 333,447 166,781
Reinvested 110 - -
Redeemed - - -
----------- ----------- -----------
Change in shares 166,934 333,447 166,781
=========== =========== ===========
INSTITUTIONAL SERVICE CLASS SHARES:
Issued 166,667 333,333 166,667
Reinvested 224 - -
Redeemed - -
----------- ----------- -----------
Change in shares 166,891 333,333 166,667
=========== =========== ===========
-------------------------------------------------------------------------------------------------------
</TABLE>
(a) PERIOD FROM COMMENCEMENT OF OPERATIONS.
34 NATIONWIDE
<PAGE> 37
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
3. TRANSACTION WITH AFFILIATES
Under the terms of an Investment Advisory Agreement, Villanova Global Asset
Management Trust ("VGAMT"), a wholly owned subsidiary of Villanova Mutual Fund
Capital trust ("VMF"), serves as the investment adviser for the Emerging
Markets, International Growth and Global Leaders Funds. As such Funds'
investment adviser, VGAMT hires and monitors subadvisers who are responsible for
daily portfolio management. VGAMT also provides investment management evaluation
services in initially selecting and monitoring on an ongoing basis the
performance of the subadvisers. VGAMT has selected Gartmore Partners
("Gartmore") to be the subadviser to the Emerging Markets, International Growth
and Global Leaders Funds. Gartmore manages such Fund's investments and is
responsible for making all investment decisions for such Funds. Under the terms
of another Investment Advisory Agreement, VMF manages the investment of the
assets and supervises the daily business affairs of the Growth 20 and the Global
Technology and Communications Funds.
Under the terms of the Investment Advisory Agreements, each Fund pays VGAMT or
VMF, as applicable, a management fee, based on the Fund's average daily net
assets. From such fees, pursuant to the subadvisory agreements, VGAMT pays fees
to Gartmore.
Additional information regarding investment advisory fees for VMF, VGAMT and the
subadvisory fees for Gartmore is as follows for the period ended October 31,
2000:
<TABLE>
<CAPTION>
TOTAL ADVISORY ADVISORY FEES SUBADVISORY FEE TOTAL FEES SUBADVISORY
FUND FEES* RETAINED* FEES SCHEDULE FEES RETAINED FEES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth 20 $ 5,731.37 $ 5,731.37 $ - Up to $500 million 0.90% 0.90% -
The next $1.5 billion 0.80% 0.80% -
$2 billion or more 0.75% 0.75% -
---------------------------------------------------------------------------------------------------------------------------
Global Technology and
Communications $20,607.30 $20,607.30 $ - All Assets 0.98% 0.98% -
---------------------------------------------------------------------------------------------------------------------------
Emerging Markets $ 8,440.77 - $ 8,440.77 All Assets 1.15% - 1.15%
---------------------------------------------------------------------------------------------------------------------------
International Growth $15,417.39 - $15,417.39 All Assets 1.00% - 1.00%
---------------------------------------------------------------------------------------------------------------------------
Global Leaders $ 7,812.73 - $ 7,812.73 All Assets 1.00% - 1.00%
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Before waivers and/or reimbursements.
VGAMT has entered into Expense Limitation Agreements with the Funds. Pursuant to
the Expense Limitation Agreements, VGAMT has agreed to waive fees or otherwise
reimburse expenses for the Fund in order to limit the total annual operating
expenses of each class of shares of each Fund at or below stated expense caps.
The following table illustrates the stated expense caps for each class of shares
of the Funds for the period ended October 31, 2000:
<TABLE>
<CAPTION>
EXPENSE CAPS
---------------------------------------------------------------------------
FUND CLASS A SHARES CLASS B SHARES INSTITUTIONAL SERVICE CLASS
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth 20 1.60% 2.20% 1.30%
Global Technology and
Communications 1.73% 2.33% 1.40%
Emerging Markets 2.15% 2.75% 1.82%
International Growth 1.85% 2.45% 1.52%
Global Leaders 1.75% 2.35% 1.42%
</TABLE>
35 NATIONWIDE
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
During the period ended October 31, 2000, VGAMT reduced expenses for the Funds
as follows:
<TABLE>
<CAPTION>
TOTAL FEES/
OTHER FEES/ EXPENSES
TOTAL FUND FEES EXPENSES WAIVED/ NET FUND
FUND EXPENSES WAIVED* REIMBURSED REIMBURSED EXPENSES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth 20 $74,856 $31,030 $33,151 $64,181 $10,675
Global Technology and Communications 98,502 45,945 13,469 59,414 39,088
Emerging Markets 56,063 21,237 17,809 39,046 17,017
International Growth 66,438 28,247 7,262 35,509 30,929
Global Leaders 55,633 20,611 20,717 41,328 14,305
</TABLE>
* Includes advisory, fund administration and transfer agent fees.
VGAMT may request and receive reimbursement from the Fund of the advisory fees
waived or limited and other expenses reimbursed by VGAMT pursuant to the Expense
Limitation Agreement at a later date not to exceed five fiscal years from
commencement of operations if the Fund has reached a sufficient asset size to
permit reimbursement to be made without causing the total annual operating
expense ratio of the Fund to exceed the limits set forth below. No reimbursement
will be made unless: (i) the Fund's assets exceed $100 million; (ii) the total
annual expense ratio of the Class making such reimbursement is less than the
limit set forth below; and (iii) the payment of such reimbursement is approved
by the Board of Trustees on a quarterly basis. Except as provided for in the
Expense Limitation Agreement, reimbursement of amounts previously waived or
assumed by VGAMT is not permitted. As of fiscal year ended October 31, 2000, the
cummulative reimbursements were $64,181, $59,414, $39,046, $35,509, and $41,328
for the Growth 20, Global Technology and Communications, Emerging Markets,
International Growth, and Global Leaders Funds, respectively.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, NAS,
the Funds' Distributor, is compensated by the Funds for expenses associated with
the distribution of Class A and Class B shares of the Funds. These fees are
based on average daily net assets of the respective class of the Funds at an
annual rate not to exceed 0.25% for Class A shares, and 1.00% for Class B
shares. For the period ended October 31, 2000, the Funds incurred distribution
fees as follows:
<TABLE>
<CAPTION>
FUND CLASS A SHARES CLASS B SHARES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth 20 $ 816 $2,630
Global Technology and Communications 1,954 6,730
Emerging Markets 613 2,443
International Growth 1,287 5,133
Global Leaders 653 2,599
</TABLE>
Pursuant to an Underwriting Agreement, NAS serves as principal underwriter of
the Funds in the continuous distribution of their shares and receives
commissions in the form of a front-end sales charge with respect to sales of
Class A shares. Such fees are deducted from and are not included in proceeds
from sales of Class A shares. From such fees, NAS pays sales commissions,
salaries, and other expenses in connection with generating new sales of Class A
shares of the Funds. For the period ended October 31, 2000, the commissions were
collected as follows:
<TABLE>
<CAPTION>
FUND CLASS A SHARES
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Growth 20 $ 5,762
Global Technology and Communications 19,513
Emerging Markets 17
International Growth 14
Global Leaders -
</TABLE>
36 NATIONWIDE
<PAGE> 39
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
NAS also receives fees for services as principal underwriter for Class B shares
of the Funds in the form of contingent deferred sales charges (CDSCs) ranging
from 1% to 5% imposed on redemptions of Class B shares which may cause the
current value of an account to fall below the total purchase payments made
during the past five years. There were no CDSCs collected for the period ended
October 31, 2000, on redemptions of Class B shares.
Under the terms of a Fund Administration Agreement, Villanova SA Capital Trust
("VSA") receives fees from the Funds for providing various administrative and
accounting services. These fees are calculated daily based on the Funds' average
daily net assets and paid monthly. During the period ended October 31, 2000, the
Funds incurred fund administration fees according to the following schedule:
<TABLE>
<CAPTION>
FUND ADMINISTRATION FUND ADMINISTRATION
FUND FEE* FEE SCHEDULE
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth 20 $24,795
Global Technology and Communications 24,795 Up to $250 million 0.07%
Emerging Markets 12,500 $250 million up to $1 billion 0.05%
International Growth 12,500 $1 billion and more 0.04%
Global Leaders 12,500
</TABLE>
* The Fund Administration fee is subject to a minimum of $75,000 per Fund per
year (pro-rated).
VSA has entered into an agreement with BISYS Fund Services Ohio, Inc., to
provide sub-administration services to the Funds.
Nationwide Investors Services, Inc. ("NISI"), a subsidiary of VSA, serves as
Transfer and Dividend Disbursing Agent for the Funds. For these services, NISI
received fees at $18 per account for Class A and Class B shares (effective
October 1, 2000, fees were increased to $20), and 0.01% of the average daily net
assets of the Institutional Service Class shares. During the period ended
October 31, 2000, the Funds incurred the following transfer agency fees:
<TABLE>
<CAPTION>
CLASS A CLASS B INSTITUTIONAL
FUND SHARES SHARES SERVICE CLASS
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth 20 $239 $239 $26
Global Technology and Communications 239 239 65
Emerging Markets 136 136 24
International Growth 140 139 51
Global Leaders 136 136 26
</TABLE>
NISI has entered into an agreement with BISYS Fund Services Ohio, Inc., to
provide sub-transfer agent services to the Funds.
Under the terms of an Administrative Services Plan, the Funds, with respect to
their Class A and Institutional Service Class shares, pay fees to servicing
organizations, such as broker-dealers including Nationwide Financial Services
(NFS), and financial institutions, which agree to provide administrative support
services to those shareholders. These services include, but are not limited, to
the following: establishing and maintaining shareholder accounts, processing
purchase and redemption transactions, arranging bank wires, performing
shareholder sub-accounting, answering inquires regarding the Fund, and other
such services. These fees are based on an annual rate of up to 0.25% of the
average daily net assets of the Class A and Institutional Service Class of
shares. During the period ended October 31, 2000, the Funds paid no
administrative servicing fees.
4. BANK LOAN
NMF currently has an unsecured bank line of credit of $50,000,000. Borrowings
under this arrangement bear interest at the Federal Funds rate plus 0.50%. These
interest costs are included in custodian fees in the Statements of Operations.
No compensating balances are required under the terms of the line of credit. The
average borrowings outstanding during the year ended October 31, 2000 for Global
Technology and Communications, and International Growth Funds were $25,568 and
$2,635, respectively at an average interest rate of 6.69% and 7.00%,
respectively.
37 NATIONWIDE
<PAGE> 40
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding U.S. Government and short-term
securities) for the period ended October 31, 2000, are summarized below. There
were no purchases or sales of U.S. Government Securities.
<TABLE>
<CAPTION>
NON U.S. GOVERNMENT
SECURITIES
-----------------------------------------------
FUND PURCHASES SALES
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth 20 $5,629,336 $2,896,725
Global Technology and Communications 16,188,867 8,911,668
Emerging Markets 5,281,916 438,269
International Growth 13,872,300 4,217,303
Global Leaders 5,526,358 969,252
</TABLE>
Realized gains and losses have been computed on the first-in, first-out basis
unless otherwise specified by VGAMT, VMF or Gartmore as applicable. Cost for
financial reporting purposes differs from cost basis for federal income tax
purposes by the amount of losses recognized for financial reporting in excess of
federal income tax reporting of $16,258, $80,531, $9,068, $94,086, and $1,466
for Growth 20, Global Technology and Communications, Emerging Markets,
International Growth, and Global Leaders, respectively. Cost for federal income
tax purposes differs from market value by net unrealized appreciation
(depreciation) of securities as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED APPRECIATION
FUND APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth 20 $301,624 $(205,527) $ 96,097
Global Technology and Communications 490,529 (681,177) (190,648)
Emerging Markets 6,746 (895,016) (888,270)
International Growth 193,628 (814,140) (620,512)
Global Leaders 113,794 (424,227) (310,433)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For certain corporate shareholders, none of the Funds' income dividends and
short-term capital gain distributions in the fiscal period ended October 31,
2000, qualify for the dividend received deduction.
7. SUBSEQUENT EVENT
At a regular quarterly meeting of the Board of Trustees on December 14 and 15,
2000, the Board considered and approved the following transactions:
(a) Approved the change in the principal underwriter of Nationwide Mutual
Funds from Nationwide Advisory Services, Inc. to Villanova Distribution
Services, Inc. This change will occur as soon as practicable after all
necessary regulatory approvals are received.
(b) Approved the addition of Class C shares for each of the Funds. These
shares will be available for sale no earlier than March 1, 2001.
End of Notes to Financial Statements
38 NATIONWIDE
<PAGE> 41
[PHOTO]
INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------
THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
NATIONWIDE MUTUAL FUNDS:
We have audited the accompanying statements of assets and liabilities of
Nationwide Mutual Funds - Gartmore Growth 20 Fund, Gartmore Global Technology
and Communications Fund, Gartmore Emerging Markets Fund, Gartmore International
Growth Fund and Gartmore Global Leaders Fund (the Funds), including the
statements of investments, as of October 31, 2000, and the related statements of
operations, statements of changes in net assets and the financial highlights for
each of the periods indicated herein. These financial statements and the
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by confirmation with the custodian,
correspondence with brokers and other appropriate audit procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned Funds as of October 31, 2000, the results of their
operations, the changes in their net assets and the financial highlights for
each of the periods indicated herein, in conformity with accounting principles
generally accepted in the United States of America.
KPMG LLP
Columbus, Ohio
December 18, 2000
39 NATIONWIDE
<PAGE> 42
SHAREHOLDER MEETING
--------------------------------------------------------------------------------
(UNAUDITED)
At the Annual Meeting of Shareholders of Nationwide Mutual Funds held on July
26, 2000, shareholders of the Funds acted upon and approved the following
matters:
PROPOSAL 1
Election of Twelve Trustees
<TABLE>
<CAPTION>
WITHHOLD
AUTHORITY
NAME FOR TO VOTE FOR
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles E. Allen 1,210,772,374 27,409,050
Paula H. J. Cholmondeley 1,210,595,553 27,585,870
C. Brent DeVore 1,210,760,725 27,420,699
Robert M. Duncan 1,210,511,422 27,670,001
Joseph J. Gasper 1,208,526,105 29,655,318
Barbara Hennigar 1,210,762,798 27,418,626
Paul J. Hondros 1,210,374,609 27,806,815
Thomas J. Kerr IV 1,210,723,620 27,457,804
Douglas F. Kridler 1,210,285,022 27,896,402
Dimon R. McFerson 1,207,073,052 31,108,372
Arden L. Shisler 1,210,645,041 27,536,382
David C. Wetmore 1,211,159,071 27,022,352
</TABLE>
PROPOSAL 2
Ratification of Board of Trustees' Selection of
KPMG LLP AS TRUST'S AUDITORS FOR
THE FISCAL YEAR ENDING OCTOBER 31, 2000
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund* 392,953 6,553 56,343 455,849
Growth Fund 29,420,887 1,083,286 1,765,968 32,270,141
Nationwide Fund 41,708,118 652,212 1,616,954 43,977,284
Bond Fund 7,055,764 37,856 326,750 7,420,370
Tax-Free Income Fund 10,875,825 151,369 764,561 11,791,755
Long-Term U.S. Government Bond Fund 1,504,410 3,959 112,030 1,620,399
Intermediate U.S. Government Bond Fund 8,570,166 41,535 158,603 8,770,304
Money Market Fund 1,032,957,631 22,226,133 38,225,984 1,093,409,748
S&P 500 Index Fund 14,589,716 178,031 620,230 15,387,977
Morley Capital Accumulation Fund 1,058,429 - - 1,058,429
Morley Enhanced Income Fund 1,109,538 - - 1,109,538
Value Opportunities Fund 106,180 - 785 106,965
High Yield Bond Fund 10,485,743 - - 10,485,743
Prestige Large Cap Value Fund 2,796,280 7,171 8,362 2,811,813
Prestige Large Cap Growth Fund 2,875,424 1,973 19,391 2,896,788
Prestige Small Cap Fund 1,953,699 3,087 7,408 1,964,194
Prestige Balanced Fund 729,593 62 26,853 756,508
</TABLE>
*Effective September 1, 2000, known as Gartmore Millenium Growth Fund.
40 NATIONWIDE
<PAGE> 43
[PHOTO]
SHAREHOLDER MEETING CONTINUED
--------------------------------------------------------------------------------
(UNAUDITED)
PROPOSAL 2 (CONTINUED)
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prestige International Fund 1,346,839 - 3,588 1,350,427
Small Cap Index Fund 2,453 - - 2,453
International Index Fund 12,881 - 998 13,879
Bond Index Fund 4,777 - - 4,777
Mid Cap Market Index Fund 501,087 - - 501,087
Investor Destinations Aggressive Fund 3,000 - - 3,000
Investor Destinations Moderately
Aggressive Fund 3,000 - - 3,000
Investor Destinations Moderate Fund 3,000 - - 3,000
Investor Destinations Moderately
Conservative Fund 3,000 - - 3,000
Investor Destinations Conservative Fund 3,000 - - 3,000
------------- ---------- ---------- -------------
All twenty-seven Funds 1,170,073,393 24,393,227 43,714,808 1,238,181,428
</TABLE>
At such Annual Meeting, shareholders of the other Funds of the Trust voted upon
these and other proposals. Results of such voting are not reported here in their
entirety to the extent they do not directly affect the Funds. However, for more
information about the results of the Annual Meeting, interested shareholders
should contact the Trust.
41 NATIONWIDE
<PAGE> 44
NOTES
--------------------------------------------------------------------------------
42 NATIONWIDE
<PAGE> 45
NOTES
--------------------------------------------------------------------------------
43 NATIONWIDE
<PAGE> 46
NOTES
--------------------------------------------------------------------------------
44 NATIONWIDE
<PAGE> 47
OFFICERS
Joseph J. Gasper - Chairman
Kevin S. Crossett - Secretary
Elizabeth A. Davin - Assistant Secretary
Alaina V. Metz - Assistant Secretary
Zita A. Resurreccion - Assistant Secretary
Michael A. Krulikowski - Assistant Secretary
Dina A. Tantra - Assistant Secretary
Gerald J. Holland - Treasurer
James F. Laird, Jr. - Assistant Treasurer
William J. Baltrus - Assistant Treasurer
Laurice A. Frysinger - Assistant Treasurer
Edwin P. McCausland - Assistant Treasurer
Bryan C. Haft - Assistant Treasurer
Mark R. Thresher - Assistant Treasurer
INVESTMENT ADVISOR
Villanova Mutual Fund Capital Trust
1200 River Road
Conshohocken, Pennsylvania 19428
TRANSFER AGENT
Nationwide Investor Services, Inc.
P.O. Box 1492
Columbus, Ohio 43216-1492
CUSTODIAN
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263-0001
LEGAL COUNSEL
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
INDEPENDENT AUDITOR
KPMG LLP
Two Nationwide Plaza
Columbus, Ohio 43215-2537
DISTRIBUTOR
Nationwide Advisory Services, Inc.
P.O. Box 1492
Columbus, Ohio 43216-1492
TRUSTEES
Joseph J. Gasper
Chairman
Columbus, Ohio
Charles E. Allen
Detroit, Michigan
Paula H.J. Cholmondeley
Boston, Massachusetts
C. Brent DeVore
Westerville, Ohio
Robert M. Duncan
Columbus, Ohio
Barbara Hennigar
Englewood, Colorado
Paul J. Hondros
Conshohocken, Pennsylvania
Thomas J. Kerr, IV
Westerville, Ohio
Douglas F. Kridler
Columbus, Ohio
Dimon R. McFerson
Columbus, Ohio
Arden L. Shisler
Dayton, Ohio
David C. Wetmore
Reston, Virginia
This report is for the information of shareholders of the Nationwide Family of
Funds. For more complete information regarding any of the mutual funds within
the Nationwide Family of Funds, including all sales charges and expenses, please
ask your representative for a prospectus. Please read it carefully before you
invest or send any money.
Nationwide is a registered Federal Service mark of the Nationwide Mutual
Insurance Company.
[PHOTO] 2000
A FOUNDATION OF STRONG PRINCIPLES
We built Villanova Capital on four core values:
- CLIENT FOCUS. As the stewards of our clients' assets, we must deliver on our
promise to manage their assets in a manner consistent with their objectives.
Thus, a growth portfolio must concentrate on growth only, just as a value or
core equity portfolio must adhere strictly to its mandate.
- PEOPLE. We must attract and retain talented and committed professionals, and
we must provide them with the best research and technology tools available
to do their jobs well.
- PERFORMANCE. We must strive to produce competitive risk-adjusted results for
our investors and work to ensure that our funds follow consistent,
well-articulated and repeatable investment processes.
- INTEGRITY. We must uphold our pledge to maintain the highest level of
integrity in all aspects of our business.
<PAGE> 48
A HEADQUARTERS RICH IN HISTORY, RENOVATED FOR THE 21ST CENTURY
Photographs of Villanova Capital's Pennsylvania headquarters are found
throughout this report.
Villanova Capital is based in historic River Park, some 15 miles west of
central Philadelphia, on the banks of the Schuylkill River.
We occupy three buildings in River Park, which, as recently as ten years
ago, was the site of a working paper mill. The site's original mill was built in
1746 with financial assistance from Benjamin Franklin, who used paper from the
mill to print currency for the 13 colonies during the American Revolution.
We worked closely with the property's developer to create a financial
services center for the new millennium, while protecting the masonry and beams
of the two-centuries-old buildings.
General Account Service and Exchanges:
1-800-848-0920
Fund Information
24 Hours a Day, 7 Days a Week:
1-800-637-0012
www.nationwidefunds.com
[PHOTO]
NATIONWIDE(R) FAMILY OF FUNDS - offered by Villanova Capital through Nationwide
Advisory Services
[LOGO] NATIONWIDE PRSRT STD
Family of Funds U S POSTAGE
PAID
P.O. Box 1492 CLEVELAND OH
Columbus, Ohio 43216-1492 PERMIT NO. 1702
October 2000
Annual Report
HS-1319-12/00
