<PAGE> 1
[PICTURE]
Gartmore Millennium Growth Fund
Growth Fund
Nationwide Fund
Bond Fund
Tax-Free Fund
Long-Term U.S. Government Bond Fund
Intermediate U.S. Government Bond Fund
Money-Market Fund
[PICTURE]
NATIONWIDE Family of Funds Annual Report 2000
[PICTURE] [PICTURE]
[PICTURE]
[LOGO] NATIONWIDE
Family of Funds
<PAGE> 2
[PICTURE OF
PAUL J. HONDROS] 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 [PICTURE]
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.
<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. Three of the equity funds included in this report, the Nationwide Fund,
the Nationwide Growth Fund and the Gartmore Millennium Growth Fund, outperformed
their respective benchmarks during the last three months of the fiscal year. In
fact, the Millennium Growth Fund handily beat its benchmark, the unmanaged
Russell Midcap Growth Index, for the entire 12-month period ended October 31
(56.20%* versus 38.67%).
Our bond funds turned in mixed results, due in part to overweightings in
corporate bonds, which suffered from earning pressure and signs of economic
weakening, and underweightings in Treasuries, the year's top performer.
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
--------------------------------------------------------------------------------
*Performance does not reflect sales charge and assumes reinvestment of
dividends. For more complete information, including net performance and
specific risks associated with the fund, please refer to pages 39 to 58.
CONTENTS
1 Message to Shareholders
2 Fund Highlights
6 Gartmore Millennium
Growth Fund
8 Growth Fund
10 Nationwide Fund
13 Bond Fund
16 Tax-Free Income Fund
21 Long-Term U.S. Government
Bond Fund
23 Intermediate U.S.
Government Bond Fund
25 Money Market Fund
29 Statements of Assets and
Liabilities
32 Statements of Operations
35 Statements of Changes in
Net Assets
39 Financial Highlights
47 Notes to Financial
Statements
59 Independent Auditors' Report
60 Shareholder Meeting
65 Trustees and Officers
<PAGE> 4
NATIONWIDE(R) STOCK FUND HIGHLIGHTS
================================================================================
GARTMORE MILLENNIUM GROWTH FUND
(Formerly the Nationwide Mid Cap Growth Fund)
INVESTMENT STRATEGY
The Fund seeks long-term capital appreciation by investing primarily in
stocks of companies that the manager believes are creating fundamental changes
in the economy. The companies tend to be characterized by original or innovative
products, services, and/or processes.
PORTFOLIO MANAGER
Aaron Harris
GROWTH FUND
INVESTMENT STRATEGY
The Fund seeks long-term capital appreciation by investing primarily in
common stocks of large capitalization companies. The Fund looks for companies
whose earnings are expected to consistently grow faster than other companies in
the market.
PORTFOLIO MANAGER
Christopher E. Baggini, CFA
TOP TEN HOLDINGS*
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
==============================================================
Juniper Networks, Inc. 3.79%
Computer Equipment
--------------------------------------------------------------
Broadvision, Inc. 3.54%
Computer Software & Services
--------------------------------------------------------------
Check Point Software Technologies Ltd. 3.13%
Computer Equipment
--------------------------------------------------------------
Sun Microsystems 3.09%
Computer Software & Services
--------------------------------------------------------------
Manugistics Group, Inc. 3.09%
Computer Software & Services
--------------------------------------------------------------
Siebel Systems, Inc. 3.02%
Computer Software & Services
--------------------------------------------------------------
Nortel Networks Co. ADR 2.88%
Telecommunications Equipment
--------------------------------------------------------------
Foundry Networks, Inc. 2.76%
Computer Equipment
--------------------------------------------------------------
Santa Fe International Corp. 2.68%
Oil & Gas
--------------------------------------------------------------
VERITAS Software Corp. 2.59%
Computer Software & Services
--------------------------------------------------------------
TOP TEN HOLDINGS*
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
==============================================================
Cisco Systems, Inc. 5.69%
Computer Software & Services
--------------------------------------------------------------
Pfizer, Inc. 4.25%
Drugs
--------------------------------------------------------------
Sun Microsystems 3.58%
Computer Software & Services
--------------------------------------------------------------
EMC Corp. 3.34%
Computer Equipment
--------------------------------------------------------------
General Electric Co. 3.27%
Capital Goods
--------------------------------------------------------------
Schering-Plough Corp. 3.03%
Drugs
--------------------------------------------------------------
Corning, Inc. 2.52%
Communication Equipment
--------------------------------------------------------------
Qwest Communications International 2.48%
Telecommunications
--------------------------------------------------------------
Automatic Data Processing, Inc. 2.37%
Computer Software & Services
--------------------------------------------------------------
Comcast Corp. Class A 2.35%
Broadcast Media/Cable Television
--------------------------------------------------------------
*Excludes short-term investments, cash, and cash equivalents.
2 N A T I O N W I D E
<PAGE> 5
NATIONWIDE(R) STOCK AND BOND FUND HIGHLIGHTS [PHOTO]
================================================================================
NATIONWIDE FUND
INVESTMENT STRATEGY
The Fund seeks total return from a flexible combination of current income
and capital appreciation. To achieve this objective, the Fund invests primarily
in the common stock and convertible securities of companies with consistent
earnings.
PORTFOLIO MANAGERS
Charles F. Bath, CFA
William H. Miller
BOND FUND
INVESTMENT STRATEGY
The Fund seeks a high level of current income and capitalization
preservation. It invests primarily in investment-grade securities, focusing on
investment-grade corporate bonds, government obligations, mortgage-backed
securities and short-term paper.
PORTFOLIO MANAGER
Douglas Kitchen, CFA
TOP TEN HOLDINGS*
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
===============================================================
Pfizer, Inc. 3.97%
Drugs
---------------------------------------------------------------
Fannie Mae 3.26%
Mortgage/Asset Backed Obligations
---------------------------------------------------------------
Schering-Plough Corp. 3.04%
Drugs
---------------------------------------------------------------
Exxon Mobil Corp. 2.98%
Oil & Gas
---------------------------------------------------------------
Intel Corp. 2.70%
Computer Equipment
---------------------------------------------------------------
Quaker Oats Co. 2.59%
Food & Related
---------------------------------------------------------------
General Electric Co. 2.30%
Capital Goods
---------------------------------------------------------------
PepsiCo, Inc. 2.12%
Beverages/Soft Drink
---------------------------------------------------------------
Cisco Systems, Inc. 2.11%
Computer Software & Services
---------------------------------------------------------------
MBNA Corp. 2.05%
Financial/Miscellaneous
---------------------------------------------------------------
*Excludes short-term investments, cash, and cash equivalents.
TOP TEN HOLDINGS
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
===============================================================
U.S. Treasury Bond, 5.50%, 8/15/28 8.29%
---------------------------------------------------------------
U.S. Treasury Bond, 8.125%, 8/15/19 6.53%
---------------------------------------------------------------
Becton Dickinson & Co., 8.70%, 1/15/25 3.70%
---------------------------------------------------------------
English China Clays Del. Inc., 7.375%, 10/1/02 3.57%
---------------------------------------------------------------
ITT Rayonier, Inc., 7.50%, 10/15/02 2.67%
---------------------------------------------------------------
Rochester Telephone Corp., 8.77%, 4/16/01 2.64%
---------------------------------------------------------------
Hilton Hotels Corp., 7.375%, 6/1/02 2.62%
---------------------------------------------------------------
Kimberly Clark Corp., 7.875%, 2/1/23 2.61%
---------------------------------------------------------------
May Department Stores Co., 8.30%, 7/15/26 2.57%
---------------------------------------------------------------
Waste Management, Inc., 8.75%, 5/1/18 2.47%
---------------------------------------------------------------
N A T I O N W I D E 3
<PAGE> 6
NATIONWIDE(R) BOND FUND HIGHLIGHTS
================================================================================
TAX-FREE INCOME FUND
INVESTMENT STRATEGY
The Fund seeks a high level of current income that is exempt from federal
income tax as is consistent with the preservation of capital through investing
in investment-grade municipal obligations. To achieve its objective, the Fund
invests primarily in securities with interest income that is exempt from federal
income tax.
PORTFOLIO MANAGER
Alpha L. Benson
LONG-TERM U.S. GOVERNMENT
BOND FUND
INVESTMENT STRATEGY
The Fund seeks a high level of current income and capital preservation. It
invests primarily in securities of the U.S. Government and its agencies. The
dollar-weighted average portfolio maturity of the Fund will be more than seven
years. The Fund invests primarily in U.S. Government and agency bonds, bills and
notes, and may also invest in mortgage-backed securities issued by U.S.
Government agencies.
PORTFOLIO MANAGER
Gary R. Hunt, CFA
TOP TEN HOLDINGS BY STATE
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
=============================================================
Texas 16.43%
-------------------------------------------------------------
Illinois 8.26%
-------------------------------------------------------------
Alabama 7.29%
-------------------------------------------------------------
South Carolina 6.82%
-------------------------------------------------------------
North Carolina 6.27%
-------------------------------------------------------------
Virginia 5.87%
-------------------------------------------------------------
Washington 5.14%
-------------------------------------------------------------
Indiana 3.91%
-------------------------------------------------------------
Michigan 3.89%
-------------------------------------------------------------
Pennsylvania 3.73%
-------------------------------------------------------------
TOP HOLDINGS BY TYPE
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
=============================================================
U.S. Treasury 68.03%
-------------------------------------------------------------
Federal National Mortgage Association 11.73%
-------------------------------------------------------------
Federal Home Loan Bank 6.55%
-------------------------------------------------------------
4 N A T I O N W I D E
<PAGE> 7
NATIONWIDE(R) BOND AND MONEY MARKET HIGHLIGHTS [PHOTO]
================================================================================
INVESTMENT STRATEGY
The Fund seeks a high level of current income and capital preservation. It
invests primarily in securities of the U.S. Government and its agencies. The
dollar-weighted average maturity of the Fund will generally be between three and
seven years. The Fund invests primarily in U.S. Government and agency bonds,
bills and notes, and may also invest in mortgage-backed securities.
PORTFOLIO MANAGER
Gary R. Hunt, CFA
MONEY MARKET FUND
INVESTMENT STRATEGY
The Fund seeks a high level of current income as is consistent with the
preservation of capital and maintenance of liquidity. It seeks to achieve this
objective by investing in high-quality money market obligations maturing in 397
days or less, including corporate obligations, U.S. Government and agency bonds,
bills and notes, the obligations of foreign governments, and the obligations of
U.S. banks and U.S. branches of foreign banks if they are denominated in U.S.
dollars. The Fund may also invest in floating and adjustable-rate obligations
and asset-backed commercial paper. Typically, the Fund's dollar-weighted average
maturity will be 90 days or less.
PORTFOLIO MANAGER
Patricia A. Mynster
TOP HOLDINGS BY TYPE
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
=================================================================
Federal National Mortgage Association 31.32%
-----------------------------------------------------------------
U.S. Treasury 27.98%
-----------------------------------------------------------------
Federal Home Loan Mortgage Corporation 23.57%
-----------------------------------------------------------------
Federal Home Loan Bank 12.67%
-----------------------------------------------------------------
Federal Farm Credit 0.92%
-----------------------------------------------------------------
TOP TEN HOLDINGS BY ISSUER
(Composition Subject to Change)
AS OF OCTOBER 31, 2000 % OF NET ASSETS
=================================================================
American Express Credit Corp. 4.06%
-----------------------------------------------------------------
Ford Motor Credit Corp. 3.99%
-----------------------------------------------------------------
Suntrust Banks, Inc. 3.66%
-----------------------------------------------------------------
General Motors Acceptance Corp. 3.66%
-----------------------------------------------------------------
National City Corp. 3.66%
-----------------------------------------------------------------
Salomon Smith Barney, Inc. 3.55%
-----------------------------------------------------------------
American General Finance Corp. 3.39%
-----------------------------------------------------------------
General Electric Capital Corp. 3.03%
-----------------------------------------------------------------
Merrill Lynch & Co., Inc. 3.02%
-----------------------------------------------------------------
Hertz Corp. 3.00%
-----------------------------------------------------------------
N A T I O N W I D E 5
<PAGE> 8
NATIONWIDE(R) MUTUAL FUNDS [PHOTO]
================================================================================
GARTMORE MILLENNIUM GROWTH FUND(a)
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Gartmore Millenium
Growth Fund returned 56.20%(b) versus 38.67% and 31.65% for the Russell Mid Cap
Growth Index, the benchmark index, and S&P MidCap 400.
I began managing what was then called the Mid Cap Growth Fund on April 15,
2000. On September 1, 2000, the Fund was renamed the Gartmore Millenium Growth
Fund to reflect my focus on companies creating fundamental change in the economy
through the use of original or innovative products, services or processes.
Since I took over the Fund, it has substantially outperformed the
benchmark. This strong performance was due to solid stock selection in health
care and oil services, and better performance in the technology sector.
The Fund's technology holdings performed better than the S&P 500's tech
holdings because of our focus on companies powering the Internet. We did not own
personal computer-related and semiconductor companies such as Dell and Intel,
which were affected by slowing demand. The Fund also avoided "dot.com" companies
with only a promise of future earnings.
Since April, top performers included Centillium Communications Inc.,
which provides semiconductor chips for digital subscriber lines (the stock was
sold due to concern over slowing semiconductor growth); Siebel Systems, a maker
of customer relationship software that allows businesses to coordinate their
sales, marketing and customer service efforts; SDL Inc, which makes laser
equipment for fiber-optic networks and cable TV (and is to be acquired by JDS
Uniphase); Bookham Technology Inc., the silicon-based optical integrated circuit
maker that is helping to solve the bandwidth and component constraints in
Internet networks; and CIENA Corp., which was driven by a major contract with
Korea Telecom.
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 companies, including Sycamore Networks, whose
products transport voice and data over wavelengths of light; Foundry Networks, a
maker of Internet switches and routers; and Vitesse Seminconductor 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.
Lone Star Technologies, a maker of oil field specialty tubing, suffered
from a temporary decline in the price of oil. This position should perform well
as we enter the winter season with its increased demand for oil.
Looking forward, the Fund will continue to focus on identifying unexpected
earnings growth in all sectors of the market. Currently, we believe the greatest
opportunities for growth still reside in the volatile technology sector, as well
as in the health care, oil services and production, and Internet infrastructure
industries.
PORTFOLIO MANAGER: AARON HARRIS
(a) FORMERLY THE NATIONWIDE MID CAP GROWTH FUND
(b) PERFORMANCE OF CLASS A SHARES WITHOUT SALES CHARGE AND ASSUMING ALL
DISTRIBUTIONS ARE REINVESTED. FUND PERFORMANCE DURING THE PERIODS SHOWN IS
LARGELY ATTRIBUTABLE TO INVESTMENTS IN IPOS. THIS PERFORMANCE WAS ACHIEVED
DURING A RISING MARKET. IT IS HIGHLY UNLIKELY THAT THIS PERFORMANCE OR THE
CIRCUMSTANCES LEADING TO IT CAN BE REPLICATED IN THE FUTURE.
PORTFOLIO MARKET VALUE $65,723,690
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
----------------------------------
Commercial Paper 5.6% [PIE CHART]
----------------------------------
Common Stock 94.4%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Years Ended October 31, 2000)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(3)
=================================================================
1 56.20% 47.23% 55.97% 50.97% 56.61% 49.55%
-----------------------------------------------------------------
5 22.41% 20.97% 22.05% 21.87% 22.46% 21.33%
10 20.26% 19.55% 20.09% 20.09% 20.29% 19.73%
-----------------------------------------------------------------
ALL FIGURES SHOWING THE EFFECT OF A SALES CHARGE REFLECT THE MAXIMUM CHARGE
POSSIBLE, BECAUSE IT HAS THE MOST DRAMATIC EFFECT ON PERFORMANCE DATA.
* THESE RETURNS INCLUDE PERFORMANCE ACHIEVED PRIOR TO THE CREATION OF THE
CLASS (5/11/98), EXCLUDING THE EFFECT OF THE EXPENSES OF CLASS A AND B
WHICH INCLUDE A 0.25% (CLASS A) OR 1.00% (CLASS B) 12b-1 FEE. HAD CLASS A
OR B BEEN IN EXISTENCE FOR THE TIME PERIODS PRESENTED, THE FUND'S
PERFORMANCE FOR SUCH CLASSES WOULD HAVE BEEN LOWER AS A RESULT OF THE
ADDITIONAL EXPENSES.
** THESE RETURNS DO NOT REFLECT THE EFFECTS OF A SALES CHARGE (SC).
(1) A 5.75% FRONT-END SALES CHARGE WAS DEDUCTED.
(2) A 5.00% CONTINGENT DEFERRED SALES CHARGE (CDSC) WAS DEDUCTED.
THE CDSC DECLINES TO 0% AFTER 6 YEARS.
(3) A 4.50% FRONT-END SALES CHARGE WAS DEDUCTED.
+ SEE LEGEND ON INSIDE BACK COVER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
FUND PERFORMANCE - CLASS D SHARES
Class D S&P MidCap 400 Russell Mid Cap Growth CPI
1990 9550 10000 10000 10000
1991 13958 16110 15513 10292
1992 14715 17851 17071 10622
1993 16861 21696 20246 10914
1994 18028 22215 20761 11199
1995 21916 26926 25793 11513
1996 26170 31597 30423 11858
1997 32361 41920 37911 12105
1998 34014 44733 35833 12285
1999 35841 54160 53458 12599
2000 60359 71301 74133 13053
COMPARATIVE PERFORMANCE OF $10,000 INVESTED IN CLASS D SHARES OF THE GARTMORE
MILLENNIUM GROWTH FUND, THE S&P MIDCAP 400 (S&P MIDCAP 400)(c), THE RUSSELL MID
CAP GROWTH INDEX (RUSSELL MID CAP GROWTH)(d), AND THE CONSUMER PRICE INDEX
(CPI)(e) OVER A 10-YEAR PERIOD ENDED 10/31/00. UNLIKE OUR FUND, THESE INDICES DO
NOT REFLECT ANY FEES, EXPENSES OR SALES CHARGES.
(c) THE S&P MIDCAP 400 IS AN UNMANAGED INDEX OF 400 STOCKS OF MEDIUM SIZED
U.S. COMPANIES. THE STOCKS ARE CHOSEN FOR THEIR MARKET SIZE LIQUIDITY AND
INDUSTRY GROUP REPRESENTATION.
(d) THE RUSSELL MID CAP GROWTH IS AN UNMANAGED INDEX OF COMPANIES WITH HIGHER
FORECASTED GROWTH VALUES. THE STOCKS ARE ALSO MEMBERS OF THE RUSSELL 1000
GROWTH INDEX. THE FUND CHANGED TO THIS BENCHMARK INDEX BECAUSE IT MORE
ACCURATELY REFLECTS THE SECURITIES THE FUND INVESTS IN.
(e) THE CPI REPRESENTS CHANGES IN PRICES OF A BASKET OF GOODS AND SERVICES
PURCHASED FOR CONSUMPTION BY URBAN HOUSEHOLDS.
6 N A T I O N W I D E
<PAGE> 9
STATEMENT OF INVESTMENTS GARTMORE MILLENNIUM GROWTH FUND (a) [ICON]
--------------------------------------------------------------------------------
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (93.6%)
-------------------------------------------------------
COMPUTER EQUIPMENT (19.1%)
48,600 Apple Computer, Inc.* $ 950,738
12,900 Applied Micro Circuits Corp.* 985,238
13,100 Check Point Software
Technologies Ltd. 2,074,713
15,700 Cobalt Networks, Inc.* 865,462
30,100 Compaq Computer Corp. 915,341
13,000 Extreme Networks, Inc.* 1,078,188
27,500 Foundry Networks, Inc.* 1,827,031
12,900 Juniper Networks, Inc.* 2,515,500
27,100 Palm, Inc.* 1,451,543
----------
12,663,754
----------
-------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (28.8%)
6,800 Ariba Inc.* 859,350
10,500 Bea Systems, Inc.* 753,375
78,800 Broadvision, Inc.* 2,344,300
2,700 Brocade Communications
Systems, Inc. 613,912
9,000 Commerce One, Inc.* 577,688
12,000 Cosine Communications, Inc.* 396,750
27,800 Docent, Inc* 715,850
8,500 Emulex Corp.* 1,248,438
4,100 i2 Technologies, Inc.* 697,000
3,500 Inktomi Corp.* 222,031
18,000 Manugistics Group, Inc.* 2,050,875
5,300 McDATA Corp.* 441,804
16,700 Metris Companies, Inc. 540,663
12,400 Packeteer, Inc.* 308,450
15,900 Peoplesoft, Inc.* 693,886
6,700 Quest Software, Inc.* 292,706
5,000 Rational Sotware Corp.* 298,438
19,100 Siebel Systems, Inc.* 2,004,305
18,500 Sun Microsystems, Inc.* 2,051,188
12,200 VERITAS Software Corp.* 1,720,390
13,900 Worldgate Communications, Inc.* 259,756
----------
19,091,155
----------
-------------------------------------------------------
ELECTRONICS (5.7%)
20,000 DDi Corp.* 798,750
22,400 Flextronics International Ltd.* 851,200
22,200 Merix Corp.* 1,036,809
9,600 Sanmina Corp.* 1,097,400
----------
3,784,159
----------
-------------------------------------------------------
HEALTH CARE (1.0%)
25,700 Amsurg Corp.* 375,863
11,700 Charles River Laboratories,
Inc.* 307,125
----------
682,988
----------
-------------------------------------------------------
OIL & GAS (17.3%)
27,700 Apache Corp. 1,532,156
48,400 Global Marine, Inc.* 1,282,600
136,000 Grey Wolf, Inc.* 629,000
25,800 Lone Star Technologies, Inc.* 1,035,870
238,300 Parker Drilling Co. * 1,429,800
58,000 Pride International, Inc.* 1,468,125
56,700 R&B Falcon Corp.* 1,417,500
48,700 Santa Fe International Corp. 1,777,550
16,350 Transocean Sedco Forex, Inc. 866,550
----------
11,439,151
----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
-------------------------------------------------------
PHARMACEUTICALS (4.5%)
7,900 Allergan, Inc. $ 664,094
7,900 Celgene Corp.* 508,563
11,200 Cephalon, Inc.* 600,600
18,500 King Pharmaceuticals, Inc.* 829,031
3,000 PE Corp-PE Biosystems Group 351,000
----------
2,953,288
----------
-------------------------------------------------------
SEMICONDUCTORS (0.5%)
2,150 PMC-Sierra, Inc. * 364,425
----------
-------------------------------------------------------
TELECOMMUNICATIONS (2.7%)
4,800 Alcatel SA ADR 299,400
6,600 Broadcom Corp.* 1,467,675
----------
1,767,075
----------
-------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT (14.0%)
7,700 Avanex Corp.* 782,031
7,500 CIENA Corp.* 788,438
7,950 Corning, Inc. 608,175
8,500 Corvis Corp.* 557,813
18,700 Finisar Corp.* 538,794
17,300 Globespan, Inc.* 1,331,018
14,800 Linear Technology Corp. 955,525
41,984 Nortel Networks Co. ADR 1,910,271
6,300 Orbotech Ltd.* 333,506
22,700 Peco II, Inc.* 879,625
1,250 SDL, Inc.* 324,063
4,650 Sycamore Networks, Inc.* 294,113
----------
9,303,372
----------
TOTAL COMMON STOCK (cost $60,779,275) 62,049,367
----------
PRINCIPAL SECURITY VALUE
SHORT-TERM DEBT (5.5%)
-------------------------------------------------------
$2,675,000 Koch Industries, 6.64%,
11/01/00(b) 2,674,507
1,000,000 Household Finance Corp.,
6.62%, 11/01/00 999,816
----------
TOTAL SHORT-TERM DEBT (cost $3,675,000) 3,674,323
----------
TOTAL INVESTMENTS (cost $64,454,275) $65,723,690
==========
-------------------------------------------------------
The abbreviations in the above statement stand for the
following:
ADR American Depository Receipt
SA Societe Anonyme (French security)
(a) FORMERLY KNOWN AS NATIONWIDE MIDCAP GROWTH FUND.
(b) 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.
* DENOTES A NON-INCOME PRODUCING SECURITY.
COST FOR FEDERAL INCOME TAX PURPOSES: $64,947,678.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $66,310,169.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
N A T I O N W I D E 7
<PAGE> 10
GROWTH FUND [ICON]
================================================================================
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Nationwide Growth Fund
returned -6.43%(a) versus 9.33% for the Russell 1000 Growth Index, the benchmark
index. The S&P 500 Index returned 6.09% over the same period.
At the onset of the fiscal year, the Fund had a different manager, and was
skewed toward companies with slow growth potential. The Fund's characteristics
resembled that of a blend portfolio. Mid-year, the Fund was repositioned within
the growth sector. I became the Fund manager on March 20, 2000, and the
resulting portfolio restructuring helped performance, but came at a time when
the market peaked. As a result, high-growth stocks languished amid volatility.
The intra-day and intra-quarter trading range for stocks became excessive, and
many investors tried to avoid risk. Safer haven and value-centric S&P
sectors--like utilities, financials and energy--performed well.
The Fund's performance was affected by negative surprises in the
technology sector and negative earnings revisions in the consumer sector. On a
stock-specific level, tech giants Dell Computer and Intel, as well as telecom
leaders Nokia and Nortel, detracted from overall performance. The dramatic shift
in investor sentiment away from technology stocks helped health care
stocks--whose less cyclical business models proved appealing. Companies such as
Schering-Plough and Merck underperformed early in the year, but outperformed in
the later part.
During the last few months, we placed significant emphasis on predictable
or stable earnings growth because we expect volatility to continue while
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 MANAGER: CHRISTOPHER BAGGINI, CFA
(a) Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $853,641,082
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
-------------------------------- [PIE CHART]
Short-Term Debt 6.3%
--------------------------------
Common Stock 93.7%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Years Ended October 31, 2000)
<TABLE>
<CAPTION>
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC1 W/O SC** W/SC2 W/O SC** W/SC3
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
1 -6.43% -11.81% -7.30% -11.34% -6.23% -10.47%
5 13.48% 12.14% 13.07% 12.82% 13.57% 12.53%
------------------------------------------------------------------------------------------
10 15.67% 14.98% 15.46% 15.46% 15.71% 15.18%
------------------------------------------------------------------------------------------
</TABLE>
ALL FIGURES SHOWING THE EFFECT OF A SALES CHARGE REFLECT THE MAXIMUM CHARGE
POSSIBLE, BECAUSE IT HAS THE MOST DRAMATIC EFFECT ON PERFORMANCE DATA.
* THESE RETURNS INCLUDE PERFORMANCE ACHIEVED PRIOR TO THE CREATION
OF THE CLASS (5/11/98), EXCLUDING THE EFFECT OF THE EXPENSES OF CLASS A AND
B WHICH INCLUDE A 0.25% (CLASS A) OR 1.00% (CLASS B) 12b-1 FEE. HAD CLASS A
OR B BEEN IN EXISTENCE FOR THE TIME PERIODS PRESENTED, THE FUND'S
PERFORMANCE FOR SUCH CLASSES WOULD HAVE BEEN LOWER AS A RESULT OF THE
ADDITIONAL EXPENSES.
** THESE RETURNS DO NOT REFLECT THE EFFECTS OF A SALES CHARGE (SC).
1 A 5.75% FRONT-END SALES CHARGE WAS DEDUCTED.
2 A 5.00% CONTINGENT DEFERRED SALES CHARGE (CDSC) WAS DEDUCTED. THE CDSC
DECLINES TO 0% AFTER 6 YEARS.
3 A 4.50% FRONT-END SALES CHARGE WAS DEDUCTED.
+ SEE LEGEND ON INSIDE BACK COVER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
FUND PERFORMANCE - CLASS D SHARES
Class D S&P 500 RUSSELL 1000 Growth CPI
1990 9550 10000 10000 10000
1991 13664 13351 14026 10292
1992 14612 14678 15543 10622
1993 16974 16860 16679 10914
1994 17947 17525 17580 11199
1995 21717 22137 22719 11513
1996 24402 27465 22728 11858
1997 32361 36302 38178 12105
1998 33376 44208 45092 12285
1999 43755 55657 60538 12599
2000 41030 59047 68185 13053
COMPARATIVE PERFORMANCE OF $10,000 INVESTED IN
CLASS D SHARES OF THE GROWTH FUND, RUSSELL 1000 GROWTH INDEX (RUSSELL 1000
GROWTH)(b), THE S&P 500(c), AND THE CONSUMER PRICE INDEX (CPI)(d) OVER A 10-YEAR
PERIOD ENDED 10/31/00. UNLIKE OUR FUND, THESE INDICES DO NOT REFLECT ANY FEES,
EXPENSES OR SALES CHARGES.
(b) THE RUSSELL 1000 GROWTH IS COMPRISED OF THE 1000 LARGEST U.S. COMPANIES
BASED UPON TOTAL MARKET CAPITALIZATION WHOSE STOCKS HAVE GREATER THAN
AVERAGE GROWTH ORIENTATION. THE FUND CHANGED TO THIS BENCHMARK INDEX
BECAUSE IT MORE ACCURATELY REFLECTS THE SECURITIES IT INVESTS IN.
(c) 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.
(d) THE CPI REPRESENTS CHANGES IN PRICES OF A BASKET OF GOODS AND SERVICES
PURCHASED FOR CONSUMPTION BY URBAN HOUSEHOLDS.
8 N A T I O N W I D E
<PAGE> 11
STATEMENT OF INVESTMENTS NATIONWIDE(R) GROWTH FUND
================================================================================
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (93.8%)
-----------------------------------------------------------------
BEVERAGES / SOFT DRINK (1.5%)
264,800 PepsiCo, Inc. $ 12,826,250
-----------
-----------------------------------------------------------------
BROADCAST MEDIA / CABLE TELEVISION (2.4%)
500,000 Comcast Corp.* 20,062,500
-----------
-----------------------------------------------------------------
CAPITAL GOODS (3.3%)
508,700 General Electric Co. 27,883,119
-----------
-----------------------------------------------------------------
COMMUNICATION EQUIPMENT (9.1%)
160,000 CIENA Corp.* 16,820,000
280,600 Corning, Inc. 21,465,900
33,300 Juniper Networks, Inc.* 6,493,500
448,000 Nokia Corp. 19,152,000
300,000 Nortel Networks Corp. 13,650,000
-----------
77,581,400
-----------
-----------------------------------------------------------------
COMPUTER EQUIPMENT (10.0%)
290,300 Compaq Computer Corp. 8,828,023
590,000 Dell Computer Corp.* 17,405,000
320,000 EMC Corp.* 28,500,000
275,000 Sun Microsystems, Inc.* 30,490,625
-----------
85,223,648
-----------
-----------------------------------------------------------------
COMPUTER NETWORKING (9.8%)
900,000 Cisco Systems, Inc.* 48,487,500
111,200 Emulex Corp.* 16,332,500
205,000 Foundry Networks, Inc.* 13,619,688
55,000 QLogic Corp.* 5,321,250
----------
83,760,938
----------
-----------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (12.6%)
119,100 Ariba, Inc.* 15,051,263
308,800 Automatic Data Processing, Inc. 20,168,499
165,100 BEA Systems, Inc.* 11,845,925
112,000 Commerce One, Inc.* 7,189,000
85,000 i2 Technologies, Inc.* 14,450,000
252,000 Microsoft Corp.* 17,356,499
370,000 Oracle Corp.* 12,210,000
65,000 VERITAS Software Corp.* 9,166,016
-----------
107,437,202
-----------
-----------------------------------------------------------------
DRUGS (16.7%)
225,000 Amgen, Inc.* 13,035,938
107,300 Cardinal Health, Inc. 10,166,675
75,000 Cephalon, Inc.* 4,021,875
120,000 Eli Lilly & Co. 10,725,000
130,000 King Pharmaceuticals, Inc.* 5,825,625
220,000 Merck & Co., Inc. 19,786,250
838,250 Pfizer, Inc. 36,201,922
310,000 Pharmacia & Upjohn, Inc. 17,050,000
500,000 Schering-Plough Corp. 25,843,748
-----------
142,657,033
-----------
-----------------------------------------------------------------
ELECTRONICS (6.3%)
422,600 Flextronics International Ltd.* 16,058,800
216,500 Jabil Circuit, Inc.* 12,354,031
175,200 Palm, Inc. * 9,384,150
140,000 Sanmina Corp.* 16,003,750
-----------
53,800,731
-----------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
-----------------------------------------------------------------
FINANCIAL / BANKS (0.9%)
168,700 Wells Fargo Co. $ 7,812,919
-------------
-----------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (2.1%)
260,000 Merrill Lynch & Co., Inc. 18,200,000
-------------
-----------------------------------------------------------------
HEALTH CARE (0.5%)
110,500 Biomet, Inc. 3,998,719
-------------
-----------------------------------------------------------------
INTERNET BUSINESS SERVICES (0.1%)
350,000 Divine Interventures, Inc.* 1,050,000
-------------
-----------------------------------------------------------------
OIL & GAS (2.4%)
115,000 Enron Corp. 9,437,188
200,000 Transocean Sedco Forex, Inc. 10,600,000
-----------
20,037,188
-----------
-----------------------------------------------------------------
RETAIL (1.6%)
498,800 Target Corp. 13,779,350
-----------
-----------------------------------------------------------------
SEMICONDUCTORS (8.8%)
297,000 Analog Devices, Inc.* 19,304,999
101,700 Applied Micro Circuits Corp.* 7,767,338
140,000 GlobeSpan, Inc.* 10,771,250
230,000 Intel Corp. 10,350,000
125,000 Vitesse Semiconductor Corp.* 8,742,188
245,000 Xilinx, Inc.* 17,747,188
-----------
74,682,963
-----------
-----------------------------------------------------------------
TELECOMMUNICATIONS (5.7%)
91,700 Allegiance Telecom, Inc.* 2,882,819
101,000 Level 3 Communications, Inc.* 4,816,438
435,000 Qwest Communications International* 21,151,874
277,100 Sprint Corp. (PCS Group)* 10,564,438
285,000 TyCom Ltd.* 9,547,500
-----------
48,963,069
-----------
TOTAL COMMON STOCK (cost $682,138,043) 799,757,029
-----------
PRINCIPAL SECURITY VALUE
SHORT-TERM DEBT (6.3%)
-----------------------------------------------------------------
$31,894,000 Koch Industries, Inc.,
6.64%, 11/01/00*(a) 31,888,117
7,000,000 Sonoco Products Co., 6.65%,
` 11/01/00 6,998,707
15,000,000 Textron, Inc., 6.65%, 11/01/00 14,997,229
-----------
TOTAL SHORT-TERM DEBT (cost $53,894,000) 53,884,053
-----------
TOTAL INVESTMENTS (cost $736,032,043) $853,641,082
===========
-----------------------------------------------------------------
* DENOTES A NON-INCOME PRODUCING SECURITY.
(a) 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: $738,036,135.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $852,229,848.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
N A T I O N W I D E 9
<PAGE> 12
NATIONWIDE(R) MUTUAL FUNDS [ICON]
================================================================================
NATIONWIDE FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Nationwide Fund
returned 1.25%(a) versus 6.09% for the S&P 500, the benchmark index.
During the fiscal year, the Fund's performance as hindered by strong
returns in the technology and telecom sectors and weakness in the health care
and financial services sectors. The Fund was underweighted in the former and
overweighted in the latter. During the fiscal year, very low quality, highly
speculative areas of the market performed exceptionally well, while high quality
stocks did poorly. That general trend had been in place since late 1998 and was
very pronounced between October 1999 and April 2000. However, since the second
quarter 2000, the trend has reversed itself and the low quality areas of the
market have abdicated their leadership to the higher quality names.
The top performing securities in the Fund were Quest Diagnostics, St. Jude
Medical and Warner-Lambert. Quest Diagnostics, was sold during the year at an
average price of over 160% above its price at the start of this period, while
St. Jude Medical and Warner-Lambert were up 100% and 49%, respectively. The
worst performing holdings were Masco, Georgia Gulf and Maytag, which were down
39%, 38%, and 29%, respectively. For the most part, the Fund's largest holdings
turned in favorable results during the period. Warner-Lambert (which was
purchased by Pfizer in May), Schering-Plough, Fannie Mae and Quaker Oats enjoyed
very strong returns. Brunswick and Black & Decker, two large weightings in the
portfolio, lagged the market. These issues were down 13% and 14%, respectively.
In September, William Miller was named co-manager of the Fund. We
completed the process of reducing the Fund's volatility relative to the S&P
through additional sector and company diversification. This was accomplished
primarily by reducing the overweight positions in the health care and financial
service sectors, while adding to the underweighted technology and telecom
sectors. The Fund is now diversified across all S&P sectors and, we believe, is
well positioned for the future.
PORTFOLIO MANAGERS: CHARLES BATH, CFA AND WILLIAM MILLER
(a) Performance of Class A Shares Without Sales Charge and Assuming All
Distributions are Reinvested.
PORTFOLIO MARKET VALUE $2,192,583,047
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
----------------------------------
Short-Term Debt 7.2% [PIE GRAPH]
----------------------------------
Common Stock 92.8%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Years Ended October 31, 2000)
CLASS A* CLASS B* CLASS D
YEARS W/O SC**W/SC(1) W/O SC**W/SC(2) W/O SC** W/SC(3)
=====================================================================
1 1.25% -4.58% 0.48% -4.22% 1.40% -3.18%
---------------------------------------------------------------------
5 19.90% 18.49% 19.40% 19.20% 19.97% 18.86%
---------------------------------------------------------------------
10 17.17% 16.48% 16.93% 16.93% 17.21% 16.67%
---------------------------------------------------------------------
ALL FIGURES SHOWING THE EFFECT OF A SALES CHARGE REFLECT THE MAXIMUM CHARGE
POSSIBLE, BECAUSE IT HAS THE MOST DRAMATIC EFFECT ON PERFORMANCE DATA.
* THESE RETURNS INCLUDE PERFORMANCE ACHIEVED PRIOR TO THE CREATION OF THE
CLASS (5/11/98), EXCLUDING THE EFFECT OF THE EXPENSES OF CLASS A AND B
WHICH INCLUDE A 0.25% (CLASS A) OR 1.00% (CLASS B) 12b-1 FEE. HAD CLASS A
OR B BEEN IN EXISTENCE FOR THE TIME PERIOD PRESENTED, THE FUND'S
PERFORMANCE FOR SUCH CLASSES WOULD HAVE BEEN LOWER AS A RESULT OF THE
ADDITIONAL EXPENSES.
** THESE RETURNS DO NOT REFLECT THE EFFECTS OF A SALES CHARGE.
1 A 5.75% FRONT-END SALES CHARGE WAS DEDUCTED.
2 A 5.00% CONTINGENT DEFERRED SALES CHARGE (CDSC) WAS DEDUCTED. THE CDSC
DECLINES TO 0% AFTER 6 YEARS.
3 A 4.50% FRONT-END SALES CHARGE WAS DEDUCTED.
+ SEE LEGEND ON INSIDE BACK COVER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
FUND PERFORMANCE - CLASS D SHARES
Class D S&P 500 CPI
1990 9550 10000 10000
1991 13033 13351 10292
1992 14164 14678 10622
1993 15035 16660 10914
1994 15769 17525 11199
1995 18602 22137 11513
1996 23711 27465 11858
1997 33236 36302 12105
1998 41787 44288 12285
1999 46078 55657 12599
2000 46723 59047 13053
COMPARATIVE PERFORMANCE OF $10,000 INVESTED IN CLASS D SHARES THE NATIONWIDE
FUND, THE S&P 500(b), AND THE CONSUMER PRICE INDEX (CPI)(c) OVER A 10-YEAR
PERIOD ENDED 10/31/00. 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.
1 0 N A T I O N W I D E
<PAGE> 13
STATEMENT OF INVESTMENTS NATIONWIDE(R) FUND [ICON]
================================================================================
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (93.0%)
----------------------------------------------------------
AEROSPACE / DEFENSE (0.2%)
71,200 Boeing Co. (The) $ 4,828,250
-----------
----------------------------------------------------------
AIRLINES (0.6%)
447,000 Southwest Airlines 12,739,500
-----------
----------------------------------------------------------
BEVERAGES / ALCOHOLIC (1.8%)
848,900 Anheuser-Busch Cos., Inc. 38,837,175
-----------
----------------------------------------------------------
BEVERAGES / SOFT DRINK (2.1%)
958,200 PepsiCo, Inc. 46,412,813
-----------
----------------------------------------------------------
BUSINESS SERVICES (0.1%)
55,020 Concord EFS, Inc.* 2,273,014
-----------
----------------------------------------------------------
CAPITAL GOODS (4.3%)
274,350 Eaton Corp. 18,672,947
915,900 General Electric Co. 50,202,768
136,700 Millipore Corp. 7,176,750
191,700 Minnesota Mining &
Manufacturing Co. 18,523,013
-----------
94,575,478
-----------
----------------------------------------------------------
CHEMICALS (1.1%)
258,700 Ecolab, Inc. 10,137,807
488,400 Georgia Gulf Corp. 6,532,350
261,158 Rohm & Haas Co. 7,851,062
-----------
24,521,219
-----------
----------------------------------------------------------
COMMUNICATION EQUIPMENT (3.9%)
57,479 CIENA Corp.* 6,042,480
148,721 Corning, Inc. 11,377,157
135,636 JDS Uniphase Corp.* 11,045,857
59,582 Juniper Networks, Inc.* 11,618,490
609,000 Lucent Technologies, Inc. 14,197,312
181,245 Motorola, Inc. 4,519,797
92,569 Nokia Corp. ADR 3,957,325
502,097 Nortel Networks Corp. ADR 22,845,413
-----------
85,603,831
-----------
----------------------------------------------------------
COMPUTER EQUIPMENT (6.6%)
387,905 EMC Corp.* 34,547,789
445,300 Hewlett-Packard Co. 20,678,619
1,310,302 Intel Corp. 58,963,590
241,316 International Business
Machines Corp. 23,769,625
27,830 Network Appliance, Inc.* 3,311,770
21,454 Newport Corp. 2,450,114
-----------
143,721,507
-----------
----------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (8.2%)
80,087 BEA Systems, Inc.* 5,746,242
18,898 Brocade Communications Systems* 4,296,933
857,520 Cisco Systems, Inc.* 46,198,889
24,067 Mercury Interactive Corp.* 2,671,437
14,816 Micromuse, Inc.* 2,514,090
596,388 Microsoft Corp.* 41,076,224
28,929 NVIDIA Corp.* 1,797,666
937,469 Oracle Corp.* 30,936,477
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
----------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (CONTINUED)
41,037 Rational Software Corp.* 2,449,396
37,517 Sapient Corp.* 1,334,198
75,285 Siebel Systems, Inc.* $ 7,900,220
281,082 Sun Microsystems, Inc.* 31,164,967
21,842 Yahoo!, Inc.* 1,280,487
-----------
179,367,226
-----------
----------------------------------------------------------
COMPUTERS / HARDWARE (0.1%)
39,950 Avaya, Inc.* 536,828
51,778 Symbol Technologies, Inc. 2,352,663
-----------
2,889,491
-----------
----------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (2.0%)
1,207,200 Masco Corp. 22,559,550
484,600 Vulcan Materials Co. 20,353,200
-----------
42,912,750
-----------
----------------------------------------------------------
CONSUMER DURABLE (3.2%)
1,080,000 Black & Decker Corp. 40,635,000
386,000 Fortune Brands, Inc. 11,362,875
625,500 Maytag Corp. 17,904,938
-----------
69,902,813
-----------
----------------------------------------------------------
CONTAINERS (1.0%)
463,400 Sealed Air Corp.* 22,301,125
-----------
----------------------------------------------------------
DRUGS (10.1%)
704,300 American Home Products Corp. 44,723,050
2,011,075 Pfizer, Inc. 86,853,302
363,213 Pharmacia & Upjohn, Inc. 19,976,714
1,285,600 Schering-Plough Corp. 66,449,450
-----------
218,002,516
-----------
----------------------------------------------------------
ELECTRONICS (2.8%)
79,252 Applied Micro Circuits Corp.* 6,052,872
43,421 Broadcom Corp.* 9,655,745
66,403 Jabil Circuit, Inc.* 3,789,121
35,014 Maxim Integrated Products, Inc.* 2,321,866
38,448 Microchip Technology, Inc.* 1,215,918
48,080 Sanmina Corp.* 5,496,145
117,668 Sycamore Networks, Inc.* 7,442,501
54,540 Teradyne, Inc.* 1,704,375
447,407 Texas Instruments, Inc. 21,950,905
34,126 Waters Corp.* 2,476,268
-----------
62,105,716
-----------
----------------------------------------------------------
ENTERTAINMENT (1.8%)
1,070,795 Walt Disney Co. (The) 38,347,846
-----------
----------------------------------------------------------
FINANCIAL / BANKS (5.1%)
404,800 Bank of New York Co., Inc. 23,301,300
196,000 Citigroup, Inc. 10,314,500
758,900 Mellon Financial Corp. 36,616,925
909,800 Wells Fargo Co. 42,135,113
-----------
112,367,838
-----------
CONTINUED N A T I O N W I D E 11
<PAGE> 14
STATEMENT OF INVESTMENTS NATIONWIDE(R) FUND CONTINUED
================================================================================
OCTOBER 31, 2000
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (3.8%)
334,684 Associates First Capital Corp. $ 12,425,144
1,194,500 MBNA Corp. 44,868,406
254,900 Providian Financial Corp. 26,509,600
-------------
83,803,150
-------------
--------------------------------------------------------------
FOOD & RELATED (5.7%)
584,400 General Mills, Inc. 24,398,700
383,200 Philip Morris Cos., Inc. 14,034,700
694,100 Quaker Oats Co. 56,612,530
1,183,100 Ralston-Purina Group 28,690,175
-------------
123,736,105
-------------
--------------------------------------------------------------
HEALTH CARE (2.3%)
297,200 Johnson & Johnson Co. 27,379,550
434,100 St. Jude Medical, Inc.* 23,875,500
-------------
51,255,050
-------------
--------------------------------------------------------------
INSURANCE (2.5%)
410,675 American International
Group, Inc. 40,246,150
172,200 Chubb Corp. (The) 14,540,138
-------------
54,786,288
-------------
--------------------------------------------------------------
LEISURE PRODUCTS (1.4%)
1,539,200 Brunswick Corp. 29,918,200
-------------
--------------------------------------------------------------
MANUFACTURING (0.9%)
350,200 Illinois Tool Works, Inc. 19,457,988
-------------
--------------------------------------------------------------
METALS & MINING (0.1%)
47,500 Alcoa, Inc. 1,362,656
-------------
--------------------------------------------------------------
MORTGAGE / ASSET-BACKED OBLIGATIONS (3.3%)
926,600 Fannie Mae 71,348,200
-------------
--------------------------------------------------------------
OIL & GAS (5.2%)
730,000 Exxon Mobil Corp. 65,106,875
498,000 Texaco, Inc. 29,413,124
493,600 Unocal Corp. 16,844,100
82,000 Williams Cos., Inc. (The) 3,428,625
-------------
114,792,724
-------------
--------------------------------------------------------------
OIL EQUIPMENT & SERVICES (0.7%)
199,900 Schlumberger Ltd. 15,217,388
-------------
--------------------------------------------------------------
PRINTING & PUBLISHING (0.9%)
545,700 American Greetings Corp. 9,924,919
157,900 Gannett Co., Inc. 9,158,200
-------------
19,083,119
-------------
--------------------------------------------------------------
RETAIL (1.3%)
650,600 Wal-Mart Stores, Inc. 29,520,975
-------------
--------------------------------------------------------------
RETAIL / FOOD & DRUG (1.4%)
600,000 SYSCO Corp. 31,312,500
-------------
SHARES SECURITY VALUE
COMMON STOCK (CONTINUED)
--------------------------------------------------------------
SEMICONDUCTORS (0.8%)
141,815 Analog Devices, Inc.* $ 9,217,975
106,625 Applied Materials, Inc.* 5,664,453
25,709 GlobeSpan, Inc.* 1,977,986
44,000 Micron Technology, Inc.* 1,529,000
-------------
18,389,414
-------------
--------------------------------------------------------------
TECHNOLOGY (0.7%)
343,489 Flextronics International Ltd.* 13,052,582
39,539 Micrel, Inc.* 1,789,140
-------------
14,841,722
-------------
--------------------------------------------------------------
TELECOMMUNICATIONS (4.9%)
196,735 ADC Telecommunications, Inc.* 4,205,211
521,063 AT&T Corp. 12,082,148
197,934 BellSouth Corp. 9,562,686
65,580 CenturyTel, Inc. 2,524,830
169,202 Exodus Communications, Inc.* 5,678,842
132,793 Nextel Communications, Inc.* 5,104,231
148,548 Qwest Communications
International* 7,223,147
376,195 SBC Communications, Inc. 21,701,748
138,680 Sprint Corp. (FON Group) 3,536,340
150,332 Sprint Corp. (PCS Group)* 5,731,408
374,094 Verizon Communications 21,627,309
386,454 Worldcom, Inc.* 9,178,283
-------------
108,156,183
-------------
--------------------------------------------------------------
UTILITIES (2.1%)
522,400 Dominion Resources, Inc. 31,115,450
373,100 TXU Corp. 13,828,019
-------------
44,943,469
-------------
TOTAL COMMON STOCK (cost $1,619,620,576) 2,033,635,239
-------------
PRINCIPAL SECURITY VALUE
SHORT-TERM DEBT (7.3%)
--------------------------------------------------------------
$20,000,000 CIT Group, Inc., 6.63%,
11/01/00 19,996,317
60,469,000 Household Finance Co., 6.62%,
11/01/00 60,457,880
28,508,000 John Deere Cap., 6.63%,
11/01/00 28,502,750
50,000,000 Salomon SB Holdings Inc.,
6.58%, 11/01/00 49,990,861
-------------
TOTAL SHORT-TERM DEBT (cost $158,977,000) 158,947,808
-------------
TOTAL INVESTMENTS (cost $1,778,597,576) $2,192,583,047
=============
--------------------------------------------------------------
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: $1,793,240,618.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $2,187,073,457.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
1 2 N A T I O N W I D E
<PAGE> 15
NATIONWIDE(R) MUTUAL FUNDS
================================================================================
BOND FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Nationwide Bond Fund
returned 2.87%(a) versus 7.11% for the Lehman Brothers Government/Corporate Bond
Index, the benchmark index.
The Nationwide Bond Fund was impacted most by poor relative performance in
the corporate market. Over the 12-month period, Corporates underperformed
Treasuries by 284 basis points. Our Fund was overweighted in Corporates by about
40%. Many factors contributed to the Corporate market's deterioration: Y2K fears
at year-end 1999; the Federal Reserve's tightening to slow the economy; Treasury
buybacks; and an inverted yield curve. In addition, corporate bonds experienced
a continued lack of liquidity because of dealer consolidation, hedge funds
closing, and a loss of interest as investors pursued higher returns elsewhere.
A number of companies disappointed investors and saw their bonds plummet
10% to 30% in value. Yield spreads on BBB corporate bonds widened by a full
percentage point or more. I was fortunate to trade out of a couple of troubled
issues, including Finova and Hercules, although we had our share of credit
problems. Crown Cork & Seal, Dole Foods, J.C. Penney, USEC and Service Corp. all
fell at least 10% in value. Armstrong World caused the most damage to the
portfolio. The company was under pressure all year, first on fears of a
leveraged buyout and then on concern of mounting asbestos liabilities. By
October, the value of Armstrong's bonds had collapsed significantly. I still
believe that Armstrong remains a good investment; however, the odds are stacked
against it and I may swap for another credit with more certain prospects.
I will remain invested in these troubled companies as I believe that most
of the damage has been done. In my experience, some of the worst performers come
back with strong performance the next year. Waste Management was our worst
performer last year, but has returned more than 16% this year--by far the best
in the portfolio.
The portfolio currently has 15% in U.S. Treasuries, with the remainder in
Corporates. I intend to keep 80 to 85% in corporate issues, as I believe there
is good value in the sector. Spreads are at their widest levels in 20 years and
seem to have priced in a mild recession in 2001. In addition, I believe the
Treasury curve is pricing in a 1/4 to 1/2 point easing in the Federal Funds rate
within the next 6 months. If the Fed eases, Corporates should begin to
outperform most of the other sectors in the fixed income market--a sharp
reversal from the performance of the last three years.
Over the next six months I intend to eliminate most of our Treasury
holdings. They have been star performers over the last year with the government
using the budget surplus to buy back outstanding issues. This has given them a
scarcity value, and they are richly priced. The proceeds will go into other
government securities, most likely agency issues, such as GNMAs. This should
boost the yield of the Fund by as much as 15 basis points, while maintaining
adequate liquidity.
PORTFOLIO MANAGER: DOUGLAS KITCHEN, CFA
(a) PERFORMANCE OF CLASS A SHARES WITHOUT SALES CHARGE AND ASSUMING ALL
DISTRIBUTIONS ARE REINVESTED.
PORTFOLIO MARKET VALUE $114,028,960
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
[PIE GRAPH]
Short-Term Debt 2.2%
U.S. Government Obligations 15.2%
Corporate Bonds 82.6%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Years Ended October 31, 2000)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(1)
-------------------------------------------------------------------------
1 2.87% -1.79% 2.15% -2.67% 2.97% -1.68%
-------------------------------------------------------------------------
5 4.64% 3.68% 4.33% 4.02% 4.77% 3.81%
-------------------------------------------------------------------------
10 7.04% 6.56% 6.88% 6.88% 7.11% 6.62%
-------------------------------------------------------------------------
ALL FIGURES SHOWING THE EFFECT OF A SALES CHARGE REFLECT THE MAXIMUM CHARGE
POSSIBLE, BECAUSE IT HAS THE MOST DRAMATIC EFFECT ON PERFORMANCE DATA.
* THESE RETURNS INCLUDE PERFORMANCE ACHIEVED PRIOR TO THE CREATION OF THE
CLASS (5/11/98), EXCLUDING THE EFFECT OF THE EXPENSES OF CLASS A AND B
WHICH INCLUDE A 0.25% (CLASS A) OR 0.85% (CLASS B) 12b-1 FEE. HAD CLASS A
OR B BEEN IN EXISTENCE FOR THE TIME PERIODS PRESENTED, THE FUND'S
PERFORMANCE FOR SUCH CLASSES WOULD HAVE BEEN LOWER AS A RESULT OF THE
ADDITIONAL EXPENSES.
** THESE RETURNS DO NOT REFLECT THE EFFECTS OF A SALES CHARGE.
(1) A 4.50% FRONT-END SALES CHARGE WAS DEDUCTED.
(2) A 5.00% CONTINGENT DEFERRED SALES CHARGE (CDSC) WAS DEDUCTED. THE CDSC
DECLINES TO 0% AFTER 6 YEARS.
+ SEE LEGEND ON INSIDE BACK COVER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
FUND PERFORMANCE - CLASS D SHARES
[LINE GRAPH]
Class D LBMBI CPI
1990 9550 10000 10000
1991 11005 11537 10292
1992 12198 12750 10622
1993 13858 14491 10914
1994 12503 13819 11199
1995 15055 16052 11513
1996 15615 16918 11858
1997 17138 18408 12105
1998 18693 20299 12285
1999 18461 20164 12599
2000 19009 21598 13053
COMPARATIVE PERFORMANCE OF $10,000 INVESTED IN CLASS D SHARES OF THE BOND FUND,
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX (LBG/CBI)(b) AND THE
CONSUMER PRICE INDEX (CPI)(c) OVER A 10-YEAR PERIOD ENDED 10/31/00. UNLIKE OUR
FUND, THESE INDICES DO NOT REFLECT ANY FEES, EXPENSES OR SALES CHARGES.
(b) THE LBG/CBI CONSISTS OF U.S. GOVERNMENT AND CORPORATE BONDS WITH
MATURITIES OF ONE YEAR OR MORE AND OUTSTANDING PAR VALUE OF AT LEAST $100
MILLION. ALL RETURNS ARE MARKET VALUE-WEIGHTED INCLUSIVE OF ACCRUED
INTEREST.
(c) THE CPI REPRESENTS CHANGES IN PRICES OF A BASKET OF GOODS AND SERVICES
PURCHASED FOR CONSUMPTION BY URBAN HOUSEHOLDS.
N A T I O N W I D E 1 3
<PAGE> 16
STATEMENT OF INVESTMENTS NATIONWIDE(R) BOND FUND
================================================================================
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
CORPORATE BONDS (82.9%)
----------------------------------------------------------------------
AEROSPACE (2.1%)
$2,500,000 Lockheed Martin Corp.,
7.88%, 03/15/23 $ 2,329,365
-------------
----------------------------------------------------------------------
AIRLINES (1.4%)
1,500,000 American Airlines, Inc.,
10.33%, 03/04/05 1,594,989
-------------
----------------------------------------------------------------------
BOTTLED & CANNED SOFT DRINKS (2.2%)
2,500,000 Whitman Corp., 7.29%, 09/15/26 2,512,000
-------------
----------------------------------------------------------------------
CHEMICALS (6.9%)
2,000,000 Air Products & Chemicals,
6.25%, 06/15/03 1,946,418
4,000,000 English China Clays
Delaware, Inc.,
7.38%, 10/01/02 4,059,448
2,000,000 Witco Corp., 6.13%, 02/01/06 1,817,618
------------
7,823,484
------------
----------------------------------------------------------------------
COMMUNICATION EQUIPMENT (1.7%)
2,000,000 Motorola, Inc., 6.50%, 09/01/25 1,964,408
------------
----------------------------------------------------------------------
CONSTRUCTION & BUILDING MATERIALS (4.7%)
4,000,000 Armstrong Holdings, Inc.,
6.35%,08/15/03 1,513,080
2,000,000 CSR America, Inc.,
6.88%, 07/21/05 1,949,480
2,000,000 Vulcan Materials Co.,
6.00%, 04/01/09 1,826,676
------------
5,289,236
------------
----------------------------------------------------------------------
CONSUMER NON-CYCLICAL (2.6%)
3,000,000 Kimberly Clark Corp.,
7.88%, 02/01/23 2,965,785
------------
----------------------------------------------------------------------
CONTAINERS (2.4%)
2,000,000 Bemis Co., Inc., 6.70%, 07/01/05 1,989,138
1,000,000 Crown Cork & Seal PLC,
6.75%, 12/15/03 744,322
------------
2,733,460
------------
----------------------------------------------------------------------
ELECTRONICS (3.0%)
1,500,000 Arrow Electronics, 9.15%, 10/01/10 1,494,833
2,000,000 Avnet, Inc., 6.45%, 08/15/03 1,914,758
------------
3,409,591
------------
----------------------------------------------------------------------
FINANCIAL / MISCELLANEOUS (2.8%)
2,000,000 Block Financial Corp.,
8.50%, 04/15/07 2,078,526
1,000,000 Lehman Brothers Holdings, Inc.,
11.63%, 05/15/05 1,152,502
------------
3,231,028
------------
----------------------------------------------------------------------
FOOD & RELATED (1.6%)
2,000,000 Dole Foods Co., 6.38%, 10/01/05 1,776,176
------------
----------------------------------------------------------------------
HEALTH CARE (2.7%)
2,000,000 Kaiser Foundation Hospitals,
9.55%,07/15/05 2,200,296
1,000,000 McKesson HBOC, Inc.,
6.30%, 03/01/05 892,391
------------
3,092,687
------------
PRINCIPAL SECURITY VALUE
CORPORATE BONDS (CONTINUED)
----------------------------------------------------------------------
HOTELS / MOTELS (4.3%)
$3,000,000 Hilton Hotels Corp.,
7.38%, 06/01/02 $ 2,975,487
2,000,000 Marriott International, Inc.,
6.88%, 11/15/05 1,932,164
------------
4,907,651
------------
----------------------------------------------------------------------
INSURANCE (2.0%)
2,000,000 AMBAC, Inc., 9.38%, 08/01/11 2,272,184
------------
----------------------------------------------------------------------
LEISURE PRODUCTS (2.5%)
1,000,000 Brunswick Corp., 6.75%, 12/15/06 962,596
2,000,000 Rank Group Finance, 6.75%, 11/30/04 1,880,584
------------
2,843,180
------------
----------------------------------------------------------------------
MACHINERY & CAPITAL GOODS (3.5%)
1,000,000 Clark Equipment Co.,
8.00%, 05/01/23 973,347
1,000,000 Precision Castparts Corp.,
8.75%, 03/15/05 1,020,100
2,000,000 Worthington Industries, Inc.,
7.13%, 05/15/06 1,968,474
------------
3,961,921
------------
----------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES (5.4%)
4,000,000 Becton, Dickinson & Co.,
8.70%,01/15/25 4,205,968
2,000,000 Guidant Corp. Notes,
6.15%, 02/15/06 1,868,246
------------
6,074,214
------------
----------------------------------------------------------------------
NATURAL GAS (5.6%)
2,500,000 ANR Pipeline Co.,
7.00%, 06/01/25 2,442,973
2,000,000 Columbia Energy Group,
6.80%, 11/28/05 1,920,270
2,000,000 ONEOK, Inc.,
7.75%, 08/15/06 2,025,702
------------
6,388,945
------------
----------------------------------------------------------------------
NUCLEAR ENERGY (1.1%)
1,500,000 USEC, Inc., 6.63%, 01/20/06 1,245,246
------------
----------------------------------------------------------------------
OIL & GAS (0.9%)
1,000,000 Texaco Capital, Inc.,
7.75%, 02/15/33 998,405
------------
----------------------------------------------------------------------
PAPER & FOREST PRODUCTS (5.6%)
1,500,000 International Paper Co.,
8.12%, 06/15/24 1,382,376
3,000,000 ITT Rayonier, Inc.,
7.50%, 10/15/02 3,031,659
2,000,000 Willamette Industries, Inc.,
7.35%, 07/01/26 1,982,360
------------
6,396,395
------------
----------------------------------------------------------------------
POLLUTION CONTROL (2.5%)
3,000,000 Waste Management, Inc.,
8.75%,05/01/18 2,803,134
------------
----------------------------------------------------------------------
RETAIL (7.0%)
1,000,000 Dayton Hudson Corp.,
8.50%, 12/01/22 995,250
1,000,000 Dillards, Inc., 6.63%, 01/15/18 546,543
2,000,000 Lowe's Cos., 8.25%, 06/01/00 2,074,508
3,000,000 May Department Stores Co.,
8.30%,07/15/26 2,920,944
2,500,000 Penney (J.C.) Co., Inc.,
6.88%,10/15/15 1,409,965
------------
7,947,210
------------
1 4 N A T I O N W I D E CONTINUED
<PAGE> 17
STATEMENT OF INVESTMENTS NATIONWIDE(R) BOND FUND [ICON]
================================================================================
October 31, 2000
PRINCIPAL SECURITY VALUE
CORPORATE BONDS (CONTINUED)
----------------------------------------------------------------------
SERVICES (2.3%)
$2,000,000 Fluor Corp., 6.95%, 03/01/07 $ 1,955,732
1,000,000 Service Corp. International,
6.30%, 03/15/03 640,000
-----------
2,595,732
-----------
----------------------------------------------------------------------
TELECOMMUNICATIONS (2.6%)
3,000,000 Rochester Telephone Corp.,
8.77%, 04/16/01 3,002,340
-----------
----------------------------------------------------------------------
TEXTILES / APPAREL MANUFACTURING (1.9%)
1,000,000 V.F. Corp., 8.50%, 10/01/10 (a) 1,000,151
1,075,000 V.F. Corp., 9.25%, 05/01/22 (a) 1,152,993
-----------
2,153,144
-----------
----------------------------------------------------------------------
UTILITIES (1.6%)
2,000,000 South Carolina E & G,
6.13%, 03/01/09 1,840,568
-----------
TOTAL CORPORATE BONDS (cost $98,087,046) 94,152,478
-----------
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT OBLIGATIONS (15.3%)
----------------------------------------------------------------------
GOVERNMENT-SPONSORED MORTGAGE-BACKED OBLIGATIONS (0.5%)
$ 102,457 FHLMC 29X, 6.75%, 02/25/23 $ 97,741
207,752 FHLMC 29Z, 6.75%, 04/25/24 191,517
223,698 FNMA REMIC G92-15G,
7.00%, 04/25/20 222,583
-----------
511,841
-----------
----------------------------------------------------------------------
GOVERNMENT-TREASURY (14.8%)
6,000,000 U.S. Treasury Bond,
8.13%, 08/15/19 7,411,890
10,000,000 U.S. Treasury Bond,
5.50%, 08/15/28 9,411,220
-----------
16,823,110
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(cost $16,918,174) 17,334,951
-----------
SHORT-TERM DEBT (2.2%)
----------------------------------------------------------------------
2,542,000 Koch Industries 144A, 6.64%, 11/01/00(a)
TOTAL SHORT-TERM DEBT (cost $2,542,000) 2,541,531
-----------
TOTAL INVESTMENTS (cost $117,547,220) $114,028,960
===========
----------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Corp.
REMIC Real Estate Mortgage Investment Conduit
PLC Public Limited Company (British, Finnish, or Irish)
(a) 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: $117,547,220.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $113,578,373.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
N A T I O N W I D E 1 5
<PAGE> 18
NATIONWIDE(R) MUTUAL FUNDS
================================================================================
TAX-FREE INCOME FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Nationwide Tax-Free
Income Fund returned 7.90%(a) versus 8.51% for the Lehman Brothers Municipal
Bond Index, the benchmark index.
During the period, the municipal bond market continued to be dominated by
supply and demand. In particular, the market saw lower new-issue volume and
strong retail demand, but very limited institutional demand. New-issue supply
trailed levels reached in 1999; issuance was down 17% through October. The main
reason for the decline was the lack of refunding (replacing an old debt with a
new one, usually to lower the interest cost of the issuer) volume, which was
down substantially. Total issuance of refunding debt through the first 10 months
of 2000 was $14.2 billion, only 41% of the total refunding activity for all of
1999. Interest rates were still higher than in 1999, giving issuers little need
to market refunding issues.
Demand for municipal bonds remained strong for the individual (retail)
investor. These investors continued to allocate a portion of assets created
from the equity bull market to the fixed income markets, specifically the
municipal market. They tended to purchase bonds with maturities of 10 years or
shorter, especially when interest rates declined. While the traditional investor
moved into long-term securities, bond funds and property and casualty insurance
companies remained on the sidelines.
Municipal bond funds continued to experience weak cash flows, while
property and casualty insurance companies sought higher returns in the taxable
markets. These supply and demand factors have persisted throughout this year,
and, as a result, the municipal market remained thin and fragile. In fact, even
small shifts in these factors had an immediate impact on the price performance
of the Tax-Free Income Fund's holdings. As a result, in the current low interest
rate environment, long-term securities (15+ years) continued to provide the best
gross total return, better than 10.06% for the 12-month period. The top
performing securities in the Nationwide Tax-Free Fund were its long-term
securities.
During the period, no significant changes were made to the composition of
the portfolio. As of October 31, 2000, the Nationwide Tax-Free Fund had an
average maturity of 18.45 years (an increase of 0.45 years over the previous
year end), and a duration of 7.63 years (a decline of 0.37 years over the
previous year end). By comparison, the average maturity of the Lehman Brothers
Municipal Bond Index was 13.77 years (an increase of 0.77 years) and its
duration was 6.84 years (a decline of 0.35 years).
PORTFOLIO MANAGER: ALPHA BENSON
(a) PERFORMANCE OF CLASS A SHARES WITHOUT SALES CHARGE AND ASSUMING ALL
DISTRIBUTIONS ARE REINVESTED.
PORTFOLIO MARKET VALUE $209,181,003
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
[PIEGRAPH]
Municipal Securities 100.0%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Years Ended October 31, 2000)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(1)
-------------------------------------------------------------------
1 7.90% 3.06% 7.27% 2.27% 8.18% 3.32%
-------------------------------------------------------------------
5 4.82% 3.86% 4.50% 4.16% 4.93% 3.97%
-------------------------------------------------------------------
10 6.39% 5.90% 6.23% 6.23% 6.45% 5.96%
-------------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
* These returns include performance achieved prior to the creation of the
class (5/11/98), excluding the effect of the expenses of Class A and B
which includes a 0.25% (Class A) or 0.85% (Class B) 12b-1 fee. Had Class A
or B been in existence for the time periods presented, the Fund's
performance for such classes would have been lower as a result of the
additional expenses.
** These returns do not reflect the effects of a sales charge.
(1) A 4.50% front-end sales charge was deducted.
(2) A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
+ See legend on inside back cover.
Investment return and principal value will fluctuate, and when redeemed, shares
may be worth more or less than original cost. Past performance is no guarantee
of future results.
FUND PERFORMANCE - CLASS D SHARES
[LINE GRAPH]
Class D LBMBI CPI
1990 9550 10000 10000
1991 10689 11217 10292
1992 11457 12158 10622
1993 13399 13870 10914
1994 12231 13266 11199
1995 14024 15234 11513
1996 14768 16103 11858
1997 15913 17470 12105
1998 17037 18871 12285
1999 18491 18537 12599
2000 17839 20114 13053
Comparative performance of $10,000 invested in Class D shares of the Tax-Free
Income Fund, the Lehman Brothers Municipal Bond Index (LBMBI)(b) and the
Consumer Price Index (CPI)(c) over a 10-year period ended 10/31/00. Unlike our
Fund, these indices do not reflect any fees, expenses or sales charges.
(b) The LBMBI consists of investment-grade tax-exempt bonds and includes
securities with at least one year to maturity and at least $100 million in
par value outstanding.
(c) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
1 6 N A T I O N W I D E
<PAGE> 19
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND [PICTURE]
================================================================================
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (98.6%)
----------------------------------------------------------------------
ALABAMA (7.3%)
$2,510,000 Alabama Housing Finance Authority
Single-Family Mortgage Revenue Bonds,
(Collateralized Home Mortgage
Revenue Bond Program),
Series 1996-D, 6.00%, 2016 $ 2,591,575
1,100,000 Birmingham, Alabama General Obligation
Unlimited Tax Parking Warrants,
Series 1995-A, 5.90%, 2018 1,130,250
2,000,000 Birmingham, Alabama General Obligation
Unlimited Tax Refunding Revenue Bonds,
Series 1992-B, 6.25%, 2016 2,067,500
3,500,000 Birmingham, Alabama Water & Sewer
Revenue Warrants, Series 1998-A,
4.75%, 2029 2,992,500
2,480,000 Birmingham, Alabama Waterworks &
Sewer Board Refunding Revenue Bonds,
Series 1992, 6.13%, 2012 2,576,100
3,000,000 Jefferson County, Alabama Sewer
Capital Improvement Revenue Warrants,
Series A, 5.13%, 2029 2,767,500
1,500,000 Jefferson County, Alabama Sewer Capital
Improvement Revenue Warrants,
Series A, 5.00%, 2033 1,336,875
-----------
15,462,300
-----------
----------------------------------------------------------------------
ARIZONA (2.1%)
1,800,000 Mesa, Arizona Industrial Development
Authority Revenue Bonds, (Discovery
Health Systems), Series A, 5.63%, 2029 1,795,500
2,500,000 Salt River Project Agricultural
Improvement & Power District, Arizona
Electric System Revenue Bonds,
Series 1992-C, 6.20%, 2012 2,593,750
-----------
4,389,250
-----------
----------------------------------------------------------------------
COLORADO (2.4%)
340,000 Colorado Housing Finance Authority
Single-Family Housing Revenue
Refunding Bonds, Series 1991-A,
7.15%, 2014 351,234
2,000,000 Denver, Colorado City & County Airport
Revenue Bonds, Series B, 5.00%, 2025 1,812,500
3,000,000 Denver, Colorado City & County Airport
Revenue Bonds, Series D, 5.50%, 2025 2,955,000
-----------
5,118,734
-----------
----------------------------------------------------------------------
CONNECTICUT (2.0%)
4,115,000 Connecticut Housing Finance Authority
Housing Mortgage Finance Program
Bonds, Series 1992-B, 6.70%, 2012 4,315,606
-----------
----------------------------------------------------------------------
DISTRICT OF COLUMBIA (1.1%)
2,500,000 District of Columbia General Obligation
Unlimited Bonds, Series A, 5.50%, 2029 2,278,125
-----------
----------------------------------------------------------------------
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
----------------------------------------------------------------------
GEORGIA (3.2%)
$1,000,000 Atlanta, Georgia Airport General
Obligation Refunding Revenue Bonds,
Series A, 5.50%, 2026 $ 990,000
1,000,000 Georgia Local Government Certificates
of Participation Grantor Trust,
Series 1998-A, 4.75%, 2028 867,500
2,750,000 Georgia Municipal Electric Power
Authority Revenue Bonds,
Series 1991-V, 6.60%, 2018 3,059,375
1,500,000 Georgia Private College & Universities
Authority, Revenue Refunding Bonds,
(Mercer University Project),
Series A, 5.25%, 2025 1,383,750
565,000 Georgia Residential Financial Authority
Homeownership Mortgage Revenue Bonds,
Series A, 7.50%, 2017 582,295
-----------
6,882,920
-----------
----------------------------------------------------------------------
ILLINOIS (8.3%)
3,050,000 Chicago Park District, Illinois General
Obligation Unlimited Tax Park Bonds,
Series 1996, 5.60%, 2021 3,046,188
1,750,000 Illinois Development Finance Authority
Hospital Revenue Bonds, (Adventist
Health Systems / Sunbelt Obligation),
5.50%, 2020 1,480,938
3,000,000 Illinois Development Finance Authority
Hospital Revenue Bonds, (Adventist
Health Systems / Sunbelt Obligation),
5.65%, 2024 2,534,999
2,185,000 Illinois Educational Facility Authority
Revenue Bonds (Loyola University),
Series 1991-A, 7.13%, 2021 2,266,085
1,000,000 Illinois Housing Development Authority
Homeowner Mortgage Revenue Bonds,
Series 1994 A-1, 6.45%, 2017 1,038,750
2,500,000 Illinois State Building, Illinois Sales Tax
Revenue Bonds, Series V, 6.38%, 2017 2,640,625
3,000,000 Illinois State General Obligation
Unlimited Tax Bonds, Series 1994,
5.80%, 2019 3,048,750
1,500,000 Metropolitan Pier & Exposition Authority,
Illinois Dedicated State Tax Revenue
Bonds, (Mccormick Place Expansion
Project), 5.50%, 2024 1,468,125
-----------
17,524,460
-----------
----------------------------------------------------------------------
INDIANA (3.9%)
1,000,000 Ball State University Student Fee
Revenue Bonds, Series J, 6.20%, 2020 1,057,500
5,335,000 Indiana State Toll Road Commission
East-West Toll Road Revenue Bonds,
Series 1980, 9.00%, 2015 7,242,263
-----------
8,299,763
-----------
CONTINUED N A T I O N W I D E 1 7
<PAGE> 20
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND CONTINUED
======================================================================
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
----------------------------------------------------------------------
KANSAS (0.7%)
$1,500,000 Wichita, Kansas Hospital Revenue
Refunding Bonds, (Facilities
Improvements Series XI), 6.75%, 2019 $ 1,578,750
-----------
----------------------------------------------------------------------
KENTUCKY (1.6%)
3,250,000 Jefferson County, Kentucky Jewish Hospital
Healthcare Services Health Facilities
Revenue Bonds, (Jewish Hospital, Inc.),
Series 1995, 6.50%, 2015 3,384,063
-----------
----------------------------------------------------------------------
MASSACHUSETTS (1.9%)
2,525,000 Massachusetts State General Obligation
Unlimited Tax Bonds, (Consolidated
Loan), Series 1992-B, 6.50%, 2013 2,629,156
1,700,000 Massachusetts State Health &
Educational Facilities Authority,
Southcoast Health Systems Revenue
Bonds, Series A, 4.75%, 2027 1,453,500
-----------
4,082,656
-----------
----------------------------------------------------------------------
MICHIGAN (3.9%)
3,500,000 Michigan State General Obligation
Unlimited Tax Bonds, (Environmental
Protection Program), Series 1992,
6.25%, 2012 3,915,624
2,000,000 Michigan State Hospital Finance
Authority Revenue Bonds, (Ascension
Health Credit), Series A, 5.75%, 2018 2,010,000
1,000,000 Michigan State Hospital Finance
Authority Refunding Revenue Bonds,
(Henry Ford Health), Series A,
5.25%, 2020 881,250
1,500,000 Michigan State Hospital Finance
Authority Refunding Revenue Bonds,
(Henry Ford Health), 6.00%, 2024 1,451,250
-----------
8,258,124
-----------
----------------------------------------------------------------------
MINNESOTA (2.1%)
2,750,000 Minnesota State Housing Finance
Agency Single-Family Mortgage
Revenue Bonds, Series 1994-K,
6.40%, 2015 2,863,438
1,500,000 St. Louis Park Minnesota Independent
School District Number 238 General
Obligation Unlimited Tax Bonds,
5.75%, 2018 1,537,500
-----------
4,400,938
-----------
----------------------------------------------------------------------
MISSOURI (1.0%)
2,000,000 Missouri State Environmental
Improvement & Energy Resources
Authority Water Pollution Control
Revenue Bonds, 6.55%, 2014 2,095,000
-----------
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
----------------------------------------------------------------------
NEBRASKA (2.5%)
$5,000,000 Nebraska Public Power District, Power
Supply Systems Revenue Bonds,
Series 1993, 6.13%, 2015 $ 5,256,249
-----------
----------------------------------------------------------------------
NEW HAMPSHIRE (0.7%)
1,500,000 New Hampshire State Turnpike Systems
Refunding Revenue Bonds,
5.75%, 2020 1,501,875
-----------
----------------------------------------------------------------------
NEW JERSEY (1.0%)
1,000,000 New Jersey State Transportation Trust
Fund Authority, Transportation Systems
Revenue Bonds, Series A, 5.75%, 2017 1,055,000
1,000,000 New Jersey State Turnpike Authority
Revenue Bonds, Series 1991-C,
6.50%, 2016 1,120,000
-----------
2,175,000
----------------------------------------------------------------------
NEW MEXICO (0.7%)
1,500,000 Bernalillo County, New Mexico
Gross Receipts Tax Revenue Bonds,
5.25%, 2026 1,417,500
-----------
----------------------------------------------------------------------
NEW YORK (1.0%)
1,000,000 New York, New York City Transitional
Finance Authority Future Tax Secured
Revenue Bonds, Series B, 5.75%, 2019 1,027,500
1,000,000 New York State Local Government
Assistance Corporation Revenue
Refunding Bonds, Series 1993-E,
6.00%, 2014 1,093,750
-----------
2,121,250
-----------
----------------------------------------------------------------------
NORTH CAROLINA (6.3%)
425,000 Charlotte-Mecklenberg Hospital
Authority, North Carolina Health Care
Systems Revenue Bonds, Series 1992,
6.25%, 2020 429,250
1,000,000 Cumberland County, North Carolina
Hospital Facilities Revenue Bonds,
(Cumberland County Hospital
Systems, Inc.), 5.25%, 2019 887,500
1,865,000 North Carolina Housing Finance
Agency, Single-Family Revenue Bonds,
Series A, 6.25%, 2017 1,930,274
1,216,000 North Carolina Housing Finance Agency,
Single-Family Revenue Bonds,
Series J, 7.40%, 2022 1,236,806
955,000 North Carolina Housing Finance Agency,
Single-Family Revenue Bonds,
Series N, 7.40%, 2028 976,908
2,500,000 North Carolina Medical Care Commission
Hospital Revenue Bonds, (Firsthealth
of the Carolinas), 4.75%, 2026 2,128,125
4,300,000 North Carolina Medical Care Commission
Hospital Revenue Bonds,
(Gaston Health Care), 5.00%, 2029 3,660,374
1 8 N A T I O N W I D E CONTINUED
<PAGE> 21
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND CONTINUED
================================================================================
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
----------------------------------------------------------------------
NORTH CAROLINA (CONTINUED)
$2,000,000 North Carolina Medical Care
Commission Hospital Revenue
Refunding Bonds, (North Carolina
Baptist Hospitals Project), Series
1992-A, 6.38%, 2014 $ 2,060,000
-----------
13,309,237
-----------
----------------------------------------------------------------------
OHIO (1.7%)
1,100,000 Franklin County, Ohio Hospital Refunding
& Improvement Revenue Bonds, (The
Children's Hospital Project), Series
1996-A, 5.75%, 2020 1,091,750
1,000,000 Hamilton, Ohio City School District
General Obligation Bonds,
Series A, 5.50%, 2019 988,750
1,500,000 Montgomery County, Ohio Hospital Revenue
Bonds, (Kettering Medical Center),
6.75%, 2018 1,516,875
-----------
3,597,375
-----------
----------------------------------------------------------------------
PENNSYLVANIA (3.7%)
1,500,000 Pennsylvania Housing Finance Agency
Rental Housing Refunding Revenue
Bonds, Issue 1992, 6.25%, 2007 1,556,250
4,055,000 Pennsylvania Housing Finance Agency
Rental Housing Refunding Revenue
Bonds, Issue 1992, 6.40%, 2012 4,207,063
2,000,000 Pennsylvania State Turnpike Commission,
Oil Franchise Tax Revenue Bonds,
Series A, 6.00%, 2014 2,142,500
-----------
7,905,813
-----------
----------------------------------------------------------------------
SOUTH CAROLINA (6.8%)
4,980,000 Charleston, South Carolina Waterworks
& Sewer System Refunding Capital
Improvement Revenue Bonds,
Series 1991, 6.00%, 2018 5,060,924
2,735,000 South Carolina State Housing Finance
& Development Authority Homeownership
Mortgage Purchase Bonds, Series
1994-A, 6.38%, 2016 2,892,263
1,500,000 South Carolina State Housing Finance
& Development Authority Multi-Family
Revenue Refunding Bonds, Series
1992-A, 6.88%, 2023 1,556,250
1,000,000 South Carolina State Public Service
Authority Revenue Bonds,
Series A, 5.50%, 2022 991,250
3,000,000 South Carolina Transportation
Infrastructure Revenue Bonds,
Series A, 5.38%, 2024 2,906,250
1,000,000 Spartanburg, South Carolina Water
System Revenue Bonds,
Series 1996, 6.10%, 2006 1,073,750
-----------
14,480,687
-----------
----------------------------------------------------------------------
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
----------------------------------------------------------------------
TENNESSEE (2.8%)
$ 955,000 Nashville & Davidson County, Tennessee
Health & Educational Facilities
Revenue Bonds, (Meharry Medical
College New Collateralized),
Series 1979, 7.88%, 2004 $ 1,019,463
4,200,000 Shelby County, Tennessee Educational
& Housing Facilities Board Revenue
Bonds, (St. Judes Children's Research),
5.38%, 2024 3,890,250
1,000,000 Shelby County, Tennessee Health
Educational & Housing Facilities
Board Revenue Bonds, (St. Judes
Children's Research), 6.00%, 2014 1,038,750
-----------
5,948,463
-----------
----------------------------------------------------------------------
TEXAS (16.4%)
2,325,000 Beaumont Independent School District,
Texas General Obligation Unlimited Tax
School Building Bonds, Series 1996,
5.00%, 2016 2,232,000
1,300,000 Collin County, Texas Permanent
Improvement General Obligation Limited
Tax Bonds, Series A, 5.50%, 2019 1,291,875
2,000,000 Comal, Texas Independent School
District General Obligation Unlimited Tax
School Building and Refunding Bonds,
5.63%, 2019 2,007,500
2,300,000 Fort Bend Independent School District,
Texas General Obligation Unlimited Tax
Bonds, Series 1996, 5.00%, 2018 2,187,875
1,350,000 Fort Worth, Texas General Obligation
Limited Tax Bonds, 5.63%, 2017 1,361,813
1,000,000 Gulf Coast Waste Disposal Authority
Texwaste Disposal Revenue Bonds,
(Valero Energy Corp. Project),
5.70%, 2032 870,000
5,325,000 Harris County, Texas Health Facilities
Development Corporation Revenue
School Health Care Systems, Series B,
5.75%, 2027 5,398,219
1,500,000 Houston, Texas Independent School District
General Obligation Limited Tax School
House Refunding Bonds, Series 1997,
5.38%, 2017 1,490,625
7,000,000 Houston, Texas Independent School
District General Obligation Limited
Tax School House Refunding Bonds,
4.75%, 2026 5,967,500
65,000 Houston, Texas Water & Sewer Junior
Lien Revenue Refunding Bonds, Series
1991-C, 6.38%, 2017 67,645
935,000 Houston, Texas Water & Sewer Systems
Junior Lien Partially Refunded Revenue
Bonds Series C, 6.38%, 2017 963,218
1,245,000 Lower Colorado River Authority, Texas
Junior Lien Refunding Revenue Bonds,
Escrowed Series 1992, 6.00%, 2017 1,341,488
CONTINUED N A T I O N W I D E 1 9
<PAGE> 22
STATEMENT OF INVESTMENTS NATIONWIDE(R) TAX-FREE INCOME FUND CONTINUED
================================================================================
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
-------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 515,000 Lower Colorado River Authority, Texas Junior
Lien Refunding Revenue Bonds,
Unrefunded Series 1992, 6.00%, 2017 $ 524,013
650,000 Lower Colorado River Authority, Texas
Junior Lien Refunding Revenue Bonds,
Unrefunded Series 1992, 6.00%, 2017 661,375
1,250,000 Port Corpus Christi, Texas Industrial
Development Corporation Revenue
Refunding Bonds, (Valero Energy Corp.),
Series 1998-A, 5.45%, 2027 1,081,250
1,000,000 Socorro Texas Independent School District
General Obligation Unlimited Tax Bonds,
Series A, 5.75%, 2014 1,031,250
2,415,000 Texas State Water Development
General Obligation Unlimited Tax Bonds,
Series 1994, 6.90%, 2017 2,568,956
1,000,000 United Independent School District
General Obligation Unlimited Tax
Bonds, 5.38%, 2025 961,250
2,655,000 Weatherford, Texas Independent School
District General Obligation Unlimited
Tax School Building and Refunding
Bonds, Series 1994, 6.50%, 2015 2,850,806
----------
34,858,658
----------
-------------------------------------------------------------------------
UTAH (0.5%)
1,000,000 Utah State Housing Finance Agency
Multi-Family Housing Revenue
Refunding Bonds, (Cottonwoods
Apartment Project), Issue 1995,
6.30%, 2015 1,043,750
----------
-------------------------------------------------------------------------
VERMONT (1.0%)
2,000,000 Vermont Educational & Health Buildings
Financing Agency Revenue Bonds,
(Fletcher Allen Health),
Series A, 6.00%, 2023 2,060,000
----------
-------------------------------------------------------------------------
VIRGINIA (5.9%)
940,000 Fairfax County, Virginia Water Authority
Revenue Refunding Bonds,
Series 1992, 6.00%, 2022 972,900
1,205,000 Henrico County, Virginia Water & Sewer
System Refunding Revenue Bonds,
Series 1994, 5.88%, 2014 1,250,188
2,900,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue
Bonds, Subseries C-7, 6.30%, 2015 2,972,500
1,000,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue
Bonds, Series 1995-B-3, 6.35%, 2015 1,045,000
1,930,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue
Bonds, Series 1995-B-3, 6.35%, 2016 2,016,850
2,000,000 Virginia Housing Development Authority
Commonwealth Mortgage Revenue
Bonds, Series 1992-A, 7.10%, 2022 2,075,000
PRINCIPAL SECURITY VALUE
LONG-TERM MUNICIPAL SECURITIES (CONTINUED)
--------------------------------------------------------------------------------
VIRGINIA (CONTINUED)
$2,000,000 Virginia State Public School Authority
Revenue Bonds, Series A,
6.20%, 2013 $ 2,125,000
----------
12,457,438
----------
-------------------------------------------------------------------------
WASHINGTON (5.1%)
5,405,000 Central Puget Sound, Washington
Regional Transit Authority Sales Tax
& Motor Bonds, 4.75%, 2028 4,614,519
2,000,000 Seattle, Washington Water Systems
Revenue Bonds, 5.38%, 2029 1,900,000
1,000,000 Washington State Motor Vehicle Fuel
Tax General Obligation Unlimited Tax
Bonds, Series C, 5.80%, 2017 1,030,000
3,500,000 Washington State Motor Vehicle Fuel
Tax General Obligation Unlimited Tax
Bonds, Series 1997-D, 5.38%, 2022 3,377,500
----------
10,922,019
----------
-------------------------------------------------------------------------
WISCONSIN (1.0%)
2,000,000 Wisconsin State General Obligation
Unlimited Tax Bonds, Series 1992-A,
6.30%, 2011 2,055,000
---------
TOTAL LONG-TERM MUNICIPAL
SECURITIES (cost $205,987,239) $209,181,003
===========
-------------------------------------------------------------------------
COST FOR FEDERAL TAX PURPOSES: $205,774,841.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $212,189,253.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
Distribution of investments, as a percentage of total investments in securities
at value, is as follows:
-------------------------------------------------------------------------------
INDUSTRY PERCENT % MKT. VALUE
County/City School Districts 8.1% $ 16,967,681
Education 2.7% 5,738,585
Finance 4.8% 10,036,875
Hospitals and Health Services 20.0% 41,750,807
Housing 16.9% 35,251,811
Miscellaneous 1.5% 3,176,250
States, Territories, and Possessions 14.7% 30,774,362
Transportation 14.0% 29,225,531
Water, Sewer, and Combined Utilities 17.3% 36,259,101
----- -----------
100.0% $209,181,003
===== ===========
2 0 N A T I O N W I D E
<PAGE> 23
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
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.
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 Henningar
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
--------------------------------------------------------------------------------
ABOUT PERFORMANCE
The performance of the funds, as reflected on pages 2-25, includes performance
of their respective predecessor funds prior to reorganization. In addition, the
performance of the class A and B shares prior to such date has been restated for
sales charges but not for fees applicable to class A and B. The reorganization
of the funds took place on May 11, 1998.
The predecessor to the Millennium Growth Fund was the Financial Horizons
Investment Trust Growth Fund.
The predecessor to the Long-Term U.S. Government Bond Fund was the Financial
Horizons Investment Trust Government Bond Fund. The Nationwide Investing
Foundation III funds were preceded by funds of the Nationwide Investing
Foundation or Nationwide Investing Foundation II.
Inception-to-date class-specific total returns can be found in the Financial
Highlights, which start on page 39.
[PICTURE] 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> 24
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
[PICTURE]
Nationwide(R) Family of Funds - offered by Villanova Capital through Nationwide
Advisory Services
[NATIONWIDE PRSRT STD
Family of Funds Logo] U S POSTAGE
PAID
P.O. Box 1492 CLEVELAND OH
Columbus, Ohio 43216-1492 PERMIT NO. 1702
October 2000
Annual Report
HS-402-12/00
<PAGE> 25
[PHOTO]
NATIONWIDE(R) MUTUAL FUNDS
--------------------------------------------------------------------------------
LONG-TERM U.S. GOVERNMENT
BOND FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Nationwide Long-Term U.S.
Government Bond Fund returned 8.28%(a) versus 11.33% for the Lehman Brothers
Government Bond Long-Term Index, the benchmark index.
After a difficult 1999, bond market investors who remained fully invested
were rewarded for their patience in 2000. Long-term U.S. Treasuries dropped 40
basis points during the period.
The Fund's underperformance versus the Index was caused by the Fund's shift
(within its allowable range) to a longer maturity during the first quarter when
long term Treasuries realized their best results.
During the period, the Fund's top-performing sector was U.S. Treasury bonds.
Agency notes and mortgage-backed bonds detracted from performance as their
spread to Treasuries widened to historic levels. As the time to maturity is
lengthened, non-Treasury issues will experience increased volatility. For this
reason, I believe allocating a significant portion of the portfolio to U.S.
Treasury bonds would yield the best return results. As of October 31,
approximately 68% of the portfolio was in this sector.
Once the portfolio was converted to a long-term maturity fund, activity
remained minimal.
PORTFOLIO MANAGER: GARY R. HUNT, CFA
(a) Performance of Class A shares without sales charge and assumes all
distributions are reinvested.
PORTFOLIO MARKET VALUE $32,221,808
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
Repurchase Agreement 13.2%
----------------------------------- [PIE GRAPH]
U.S. Government Obligations 86.8%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Periods Ended October 31, 2000)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(1)
--------------------------------------------------------------------------------
1 8.28% 3.44% 7.63% 2.63% 8.53% 3.67%
--------------------------------------------------------------------------------
5 6.00% 5.03% 5.68% 5.35% 6.12% 5.15%
--------------------------------------------------------------------------------
10 7.83% 7.33% 7.66% 7.66% 7.89% 7.39%
ALL FIGURES SHOWING THE EFFECT OF A SALES CHARGE REFLECT THE MAXIMUM CHARGE
POSSIBLE, BECAUSE IT HAS THE MOST DRAMATIC EFFECT ON PERFORMANCE DATA.
* THESE RETURNS INCLUDE PERFORMANCE ACHIEVED PRIOR TO THE CREATION
OF THE CLASS (5/11/98), EXCLUDING THE EFFECT OF THE EXPENSES OF CLASS A AND
B WHICH INCLUDE A 0.25% (CLASS A) OR 0.85% (CLASS B) 12b-1 FEE. HAD CLASS A
OR B BEEN IN EXISTENCE FOR THE TIME PERIODS PRESENTED, THE FUND'S
PERFORMANCE FOR SUCH CLASSES WOULD HAVE BEEN LOWER AS A RESULT OF THE
ADDITIONAL EXPENSES.
** THESE RETURNS DO NOT REFLECT THE EFFECTS OF A SALES CHARGE.
(1) A 4.50% FRONT-END SALES CHARGE WAS DEDUCTED.
(2) A 5.00% CONTINGENT DEFERRED SALES CHARGE (CDSC) WAS DEDUCTED.
THE CDSC DECLINES TO 0% AFTER 6 YEARS.
+ SEE LEGEND ON INSIDE BACK COVER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
UP
FUND PERFORMANCE - CLASS D SHARES
[LINE GRAPH]
LB Govt Bond
Class D Long Term MLGMI CPI
1990 9550 10000 10000 10000
1991 11123 11833 11464 10292
1992 12341 13208 12649 10622
1993 13665 16387 14294 10914
1994 13020 14462 13678 11199
1995 15192 18368 15783 11513
1996 15953 19017 16580 11858
1997 17368 21431 18016 12105
1998 19299 24670 20060 12285
1999 18837 23353 19620 12599
2000 20445 25998 21405 13053
COMPARATIVE PERFORMANCE OF $10,000 INVESTED IN CLASS D SHARES OF THE LONG-TERM
U.S. GOVERNMENT BOND FUND, THE LEHMAN BROTHERS GOVERNMENT BOND LONG TERM INDEX
(LB GOVT. BOND LONG TERM)(b), THE MERRILL LYNCH GOVERNMENT MASTER INDEX
(MLGMI)(c) AND THE CONSUMER PRICE INDEX (CPI)(d) OVER A 10-YEAR PERIOD ENDED
10/31/00. UNLIKE OUR FUND, THESE INDICES DO NOT REFLECT ANY FEES, EXPENSES OR
SALES CHARGES.
(b) THE LB GOVT. BOND LONG TERM IS A TOTAL RETURN INDEX CONSISTING OF DOLLAR
DENOMINATED DEBT ISSUES OF GREATER THAN 10 YEARS. THE FUND CHANGED TO THIS
BENCHMARK INDEX BECAUSE IT MORE ACCURATELY REFLECTS THE LONG TERM BONDS THE
FUND INVESTS IN.
(c) THE MLGMI CONSISTS OF U.S. TREASURY NOTES AND BONDS WITH ONE OR MORE YEARS
REMAINING TO FINAL MATURITY AND AT LEAST $1 BILLION IN FACE VALUE
OUTSTANDING, AND U.S. AGENCIES WITH ONE OR MORE YEARS REMAINING TO FINAL
MATURITY AND AT LEAST $100 MILLION IN FACE VALUE OUTSTANDING.
(d) THE CPI REPRESENTS CHANGES IN PRICES OF A BASKET OF GOODS AND SERVICES
PURCHASED FOR CONSUMPTION BY URBAN HOUSEHOLDS.
21 NATIONWIDE
<PAGE> 26
STATEMENT OF INVESTMENTS NATIONWIDE(R) LONG-TERM U.S. GOVERNMENT BOND FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT SPONSORED AND AGENCY OBLIGATIONS (86.3%)
--------------------------------------------------------------------------------
GOVERNMENT-AGENCY (6.6%)
$1,000,000 FHLB, 7.40%, 04/17/17 $ 1,043,044
1,150,000 FHLB, 6.37%, 12/04/17 1,080,868
-----------
TOTAL GOVERNMENT - AGENCY (cost $2,033,188) 2,123,912
-----------
--------------------------------------------------------------------------------
GOVERNMENT MORTGAGE-BACKED (11.7%)
1,962,139 FNMA Pool #381019, 6.27%, 12/01/08 1,914,650
1,948,556 FNMA Pool #380311, 6.30%, 05/01/13 1,888,196
-----------
TOTAL GOVERNMENT - MORTGAGE-BACKED (cost $3,762,987) 3,802,846
-----------
--------------------------------------------------------------------------------
GOVERNMENT TREASURY (68.0%)
4,750,000 U.S. Treasury Bond, 11.25%, 02/15/15 7,123,518
5,000,000 U.S. Treasury Bond, 8.13%, 08/15/19 6,176,575
2,000,000 U.S. Treasury Bond, 6.25%, 08/15/23 2,063,080
6,000,000 U.S. Treasury Bond, 6.88%, 08/15/25 6,682,877
-----------
TOTAL GOVERNMENT - TREASURY (cost $21,431,597) 22,046,050
-----------
TOTAL U.S. GOVERNMENT SPONSORED AND AGENCY
OBLIGATIONS (cost $27,227,772) 27,972,808
-----------
PRINCIPAL SECURITY VALUE
REPURCHASE AGREEMENT (13.1%)
--------------------------------------------------------------------------------
$4,249,000 Warburg Dillon Read, 6.51%, 10/31/00,
Matures 11/01/00, Collaterized by
$2,969,000 U.S. Treasury Bond, 9.88%,
11/15/15, Market Value $4,249,381
TOTAL REPURCHASE AGREEMENTS (cost $4,249,000) $ 4,249,000
-----------
TOTAL INVESTMENTS (cost $31,476,772) $32,221,808
===========
--------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLB Federal Home Loan Bank
FNMA Federal National Mortgage Association
COST ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $32,406,294.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
22 NATIONWIDE
<PAGE> 27
[PHOTO]
NATIONWIDE(R) MUTUAL FUNDS
--------------------------------------------------------------------------------
INTERMEDIATE U.S. GOVERNMENT BOND FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Nationwide Intermediate
U.S. Government Bond Fund returned 7.40%(a) versus 8.00% for the Merrill Lynch
Government Master Index, the benchmark index.
After a difficult 1999, bond market investors who remained fully invested
were rewarded for their patience in 2000. Intermediate-term interest rates
dropped 16 to 30 basis points during the 12-month period, and long term interest
rates dropped 40 basis points. As a result, U.S. Treasuries were the best
performers. The Fund was underweighted this sector, which led to its
underperformance versus the Index.
The portfolio's best performers during the period were U.S. Treasuries with
final maturities of 15 years. Holdings of Agency notes and mortgage-backed bonds
detracted from performance as their spread to Treasuries widened to historic
levels.
During the 12 months, I sold agency notes in favor of mortgage-backed bonds
at substantial yield pickups. As of October 31, mortgage-backed bonds made up
approximately 49% of Fund holdings. In my opinion, the sector appears quite
attractive given the current interest rate environment. However, as we move into
2001, I anticipate that the Federal Reserve bank will ease rates. This action
would cause me to sell higher coupon mortgage-backed securities and purchase
intermediate Agency and Treasury notes in the five-year sector. This structure
should help the fund to outperform in a steady-to-falling interest rate
environment.
PORTFOLIO MANAGER: GARY R. HUNT, CFA
(a) Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $111,323,459
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
Repurchase Agreement 4.1%
-------------------------------------- [PIE GRAPH]
U.S. Government Obligations 95.9%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Periods Ended October 31, 2000)
CLASS A* CLASS B* CLASS D
YEARS W/O SC** W/SC(1) W/O SC** W/SC(2) W/O SC** W/SC(1)
--------------------------------------------------------------------------------
1 7.40% 2.53% 6.72% 1.72% 7.73% 2.84%
--------------------------------------------------------------------------------
5 5.80% 4.82% 5.47% 5.15% 5.93% 4.95%
--------------------------------------------------------------------------------
Life(3) 6.28% 5.72% 6.09% 6.09% 6.35% 5.79%
ALL FIGURES SHOWING THE EFFECT OF A SALES CHARGE REFLECT THE MAXIMUM CHARGE
POSSIBLE, BECAUSE IT HAS THE MOST DRAMATIC EFFECT ON PERFORMANCE DATA.
* THESE RETURNS INCLUDE PERFORMANCE ACHIEVED PRIOR TO THE CREATION
OF THE CLASS (5/11/98), EXCLUDING THE EFFECT OF THE EXPENSES OF CLASS A AND
B WHICH INCLUDE A 0.25% (CLASS A) OR 0.85% (CLASS B) 12b-1 FEE. HAD CLASS A
OR B BEEN IN EXISTENCE FOR THE TIME PERIODS PRESENTED, THE FUND'S
PERFORMANCE FOR SUCH CLASSES WOULD HAVE BEEN LOWER AS A RESULT OF THE
ADDITIONAL EXPENSES.
** THESE RETURNS DO NOT REFLECT THE EFFECTS OF A SALES CHARGE.
1 A 4.50% FRONT-END SALES CHARGE WAS DEDUCTED.
2 A 5.00% CONTINGENT DEFERRED SALES CHARGE (CDSC) WAS DEDUCTED. THE CDSC
DECLINES TO 0% AFTER 6 YEARS.
3 FUND COMMENCED OPERATIONS ON 2/10/92.
+ SEE LEGEND ON INSIDE BACK COVER.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
FUND PERFORMANCE - CLASS D SHARES
[LINE GRAPH]
Class D MLGMI CPI
2/10/92 9550 10000 10000
1992 9970 10741 10268
1993 10980 12137 10550
1994 10522 11612 10825
1995 12256 13401 11130
1996 12903 14076 11463
1997 14050 15299 11702
1998 15315 17033 11875
1999 15173 16829 12180
2000 16346 18175 12618
COMPARATIVE PERFORMANCE OF $10,000 INVESTED IN CLASS D SHARES OF THE
INTERMEDIATE U.S. GOVERNMENT BOND FUND, THE MERRILL LYNCH GOVERNMENT MASTER
INDEX (MLGMI)(b) AND THE CONSUMER PRICE INDEX (CPI)(c) SINCE THE FUND'S
INCEPTION (2/10/92) TO 10/31/00. UNLIKE OUR FUND, THESE INDICES DO NOT REFLECT
ANY FEES, EXPENSES OR SALES CHARGES.
(b) THE MLGMI CONSISTS OF U.S. TREASURY NOTES AND BONDS WITH ONE OR MORE YEARS
REMAINING TO FINAL MATURITY AND AT LEAST $1 BILLION IN FACE VALUE
OUTSTANDING, AND U.S. AGENCIES WITH ONE OR MORE YEARS REMAINING TO FINAL
MATURITY AND AT LEAST $100 MILLION IN FACE VALUE OUTSTANDING.
(c) THE CPI REPRESENTS CHANGES IN PRICES OF A BASKET OF GOODS AND SERVICES
PURCHASED FOR CONSUMPTION BY URBAN HOUSEHOLDS.
23 NATIONWIDE
<PAGE> 28
STATEMENT OF INVESTMENTS NATIONWIDE(R) INTERMEDIATE U.S. GOVERNMENT BOND FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT SPONSORED AND AGENCY OBLIGATIONS (95.5%)
--------------------------------------------------------------------------------
GOVERNMENT-AGENCY (19.4%)
$1,000,000 Federal Farm Credit, 7.16%, 05/15/06 $ 1,025,575
3,250,000 FHLB, 5.54%, 04/21/03 3,175,982
3,200,000 FHLB, 5.80%, 1/08/04 3,121,795
1,900,000 FHLB, 5.43%, 01/29/04 1,836,000
2,000,000 FHLB, 6.95%, 03/26/07 2,038,272
2,000,000 FHLB, 6.53%, 07/23/07 1,996,262
1,000,000 FHLB, 6.02%, 01/09/08 967,781
3,000,000 FHLMC, 5.98%, 12/08/05 2,925,942
2,655,000 FHLMC, 6.70%, 01/09/07 2,670,688
1,000,000 FNMA, 5.75%, 09/23/03 978,578
1,000,000 FNMA, 5.79%, 12/01/03 977,701
-----------
TOTAL GOVERNMENT - AGENCY (cost $21,869,844) 21,714,576
-----------
--------------------------------------------------------------------------------
GOVERNMENT-SPONSORED MORTGAGE-BACKED OBLIGATIONS (48.1%)
2,449,302 FHLMC REMIC, Series 1462-PT,
7.50%, 01/15/03 2,457,703
2,885,767 FHLMC REMIC, Series 1313-G,
7.25%, 06/15/07 2,887,037
2,000,000 FHLMC REMIC, Series 1560-PN,
7.00%, 12/15/12 1,960,480
5,000,000 FHLMC REMIC, Series 1688-J,
6.00%, 12/15/13 4,854,500
4,832,300 FHLMC REMIC, Series 2134-PT,
6.00%, 07/15/14 4,753,872
3,000,000 FHLMC REMIC, Series 2054-PS,
6.00%, 09/15/18 2,935,320
1,000,000 FHLMC REMIC, Series 1629-HA,
3.50%, 12/15/21 886,470
922,082 FNMA, Pool #73341, 6.31%, 01/01/06 902,735
973,552 FNMA, Pool #380488, 6.10%, 07/01/08 932,704
1,962,139 FNMA, Pool #381019, 6.27%, 12/01/08 1,914,650
6,717,652 FNMA, Pool #73731, 7.42%, 11/01/11 6,886,853
1,083,735 FNMA, Pool #381570, 6.30%, 04/01/14 1,025,341
4,805,998 FNMA, Pool #460221, 6.32%, 04/01/14 4,645,719
1,711,133 FNMA, Pool #73847, 7.05%, 02/01/17 1,712,980
2,197,982 FNMA, Pool #73942, 7.18%, 02/01/17 2,219,805
582,685 FNMA REMIC, Series 92-126,
8.00%, 07/25/02 584,974
4,000,000 FNMA REMIC, Series 1993-114 H,
6.50%, 07/25/08 3,973,680
3,000,000 FNMA REMIC, Series 1999-19 TD,
6.50%, 04/25/13 2,943,390
128,038 FNMA REMIC, Series 25-B,
9.25%, 10/25/18 134,039
754,918 FNMA REMIC, Series 7-B,
8.50%, 01/25/20 773,132
4,481,479 FNMA REMIC, Series G92-42 Z,
7.00%, 07/25/22 4,392,970
-----------
TOTAL GOVERNMENT-SPONSORED
MORTGAGE-BACKED OBLIGATION (cost $53,310,360) 53,778,354
-----------
--------------------------------------------------------------------------------
GOVERNMENT-TREASURY (28.0%)
10,000,000 U.S. Treasury Bond, 12.00%, 08/15/13 13,678,990
4,000,000 U.S. Treasury Bond, 11.25%, 02/15/15 5,998,752
4,000,000 U.S. Treasury Bond, 6.88%, 8/15/25 4,455,252
PRINCIPAL SECURITY VALUE
U.S. GOVERNMENT SPONSORED AND AGENCY OBLIGATIONS (CONTINUED)
--------------------------------------------------------------------------------
GOVERNMENT-TREASURY (CONTINUED)
$15,000,000 U.S. Treasury STRIPS, 0.00%, 05/15/13 $ 7,130,535
------------
TOTAL GOVERNMENT-TREASURY (cost $30,369,756) 31,263,529
------------
TOTAL U.S. GOVERNMENT SPONSORED AND
AGENCY OBLIGATIONS (cost $105,549,960) 106,756,459
------------
REPURCHASE AGREEMENT (4.1%)
--------------------------------------------------------------------------------
4,567,000 Warburg Dillon Read, 6.51%, 10/31/00, Matures
11/01/00, Collateralized by $4,859,000
U.S. Treasury Bond, 5.50%, 08/15/28,
Market Value $4,658,566
TOTAL REPURCHASE AGREEMENT (cost $4,567,000) 4,567,000
------------
TOTAL INVESTMENTS (cost $110,116,960) $111,323,459
============
--------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Corp.
REMIC Real Estate Mortgage Investment Conduit
STRIPS Separate Trading of Registered Interest and
Principal Securities
COST ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSE.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $111,736,654.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
24 NATIONWIDE
<PAGE> 29
[PHOTO]
NATIONWIDE(R) MUTUAL FUNDS
--------------------------------------------------------------------------------
MONEY MARKET FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the 12-month period ended October 31, 2000, the Nationwide Money Market
Fund returned 5.74%(a) versus 3.60% for the Consumer Price Index (CPI), the
benchmark index.
During calendar year 2000, the Federal Open Market Committee (FOMC) increased
the Federal Funds rate one full percentage point, from 5.50% to 6.50%. At the
start of 2000, the FOMC had a neutral bias on interest rates. However, since
February, the Committee, concerned about inflation, has maintained a tightening
bias.
Due to these inflationary concerns, our strategy has been to stay on the
shorter end of the yield curve and buy longer maturity issues only when paid to
do so. The Fund ended its fiscal year with an average maturity of 30 days.
The Fund's best performing category was commercial paper. U.S. Government and
Agency securities--presumed to be risk-free investments--provided the lowest
returns.
Y2K was a not a problem for the Fund as was anticipated. Commercial paper
issuers who left the market during December 1999 and early January 2000 returned
soon after.
In April 2000, Finova Capital Corporation was downgraded and became a
tier-two security. At the time of the downgrade, the Fund sold out its entire
position--approximately $46.6 million. The entire position would have matured by
May 2, 2000. The sale had no impact on the net asset value of the Fund nor on
the 7-day yield.
On October 31, 2000, the Fund held 95.5% Commercial Paper (9.4% asset-backed
and 86.1% other commercial paper), 4.7% U.S. Government and Agency securities,
and 0.3% Certificates of Deposit.
PORTFOLIO MANAGER: PATRICIA A. MYNSTER
(a) Performance of Prime shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE $1,505,763,546
OCTOBER 31, 2000
PORTFOLIO COMPOSITION
(Subject to Change)
Certificates of Deposit 0.3%
------------------------------------
U.S. Government Obligations 4.7% [PIE GRAPH]
------------------------------------
Certificates of Deposit 95.0%
AVERAGE ANNUAL (COMPOUND) TOTAL RETURN+
(For Periods Ended October 31, 2000)
SERVICE
YEARS PRIME SHARES CLASS SHARES
--------------------------------------------------------------------------------
1 5.74% 5.64%
--------------------------------------------------------------------------------
5 5.12% -
--------------------------------------------------------------------------------
10 4.67% -
--------------------------------------------------------------------------------
Life(1) - 4.65%
-------------------------------------------------------------------------------
THERE IS NO SALES CHARGE ON THE SHARES OF THE MONEY MARKET FUND. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
(1) SERVICE CLASS SHARES WERE FIRST OFFERED TO THE PUBLIC ON JANUARY 4, 1999.
+ SEE LEGEND ON INSIDE BACK COVER.
AN INVESTMENT IN THE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE
FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE
VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THE FUND.
FUND PERFORMANCE - PRIME SHARES
[LINE GRAPH]
Prime Shares CPI
1990 10000 10000
1991 10617 10292
1992 10993 10622
1993 11278 10914
1994 11655 11199
1995 12293 11513
1996 12914 11858
1997 13573 12105
1998 14266 12285
1999 14928 12599
2000 15783 13053
COMPARATIVE PERFORMANCE OF $10,000 INVESTED IN THE PRIME SHARES OF THE MONEY
MARKET FUND AND THE CONSUMER PRICE INDEX (CPI)(b) OVER A 10-YEAR PERIOD ENDED
10/31/00. UNLIKE OUR FUND, THIS INDEX DOES NOT REFLECT ANY FEES OR EXPENSE.
(b) THE CPI REPRESENTS CHANGES IN PRICES OF A BASKET OF GOODS AND SERVICES
PURCHASED FOR CONSUMPTION BY URBAN HOUSEHOLDS.
25 NATIONWIDE
<PAGE> 30
STATEMENT OF INVESTMENTS NATIONWIDE(R) MONEY MARKET FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (95.5%)
--------------------------------------------------------------------------------
AGRICULTURE / FINANCE (2.8%)
John Deere Capital Corp. (2.8%)
$10,000,000 6.50%, 11/09/00 $ 9,985,556
20,000,000 6.49%, 11/15/00 19,949,521
11,924,000 6.48%, 11/21/00 11,881,074
-----------
41,816,151
-----------
--------------------------------------------------------------------------------
ASSET BACKED SECURITIES (9.4%)
Delaware Funding Corp.(Private Placement*) (1.7%)
652,000 6.49%, 12/07/00 647,769
5,597,000 6.49%, 12/08/00 5,559,666
20,000,000 6.53%, 01/25/01 19,691,639
-----------
25,899,074
-----------
Falcon Asset Securitization Corp.
(Private Placement*) (3.0%)
12,000,000 6.50%, 11/14/00 11,971,833
8,000,000 6.50%, 11/15/00 7,979,778
20,000,000 6.50%, 11/16/00 19,945,834
5,000,000 6.50%, 11/21/00 4,981,944
-----------
44,879,389
-----------
Preferred Receivables Funding Co.
(Private Placement*) (2.9%)
15,000,000 6.50%, 11/08/00 14,981,042
15,000,000 6.50%, 11/16/00 14,959,375
10,000,000 6.49%, 12/07/00 9,935,100
3,000,000 6.48%, 12/08/00 2,980,020
-----------
42,855,537
-----------
Variable Funding Capital Corp.
(Private Placement*) (1.8%)
16,000,000 6.50%, 11/02/00 15,997,111
10,000,000 6.50%, 11/03/00 9,996,389
1,300,000 6.50%, 11/09/00 1,298,122
-----------
27,291,622
-----------
--------------------------------------------------------------------------------
AUTO / FINANCE (7.8%)
American Honda Finance Corp. (0.1%)
1,500,000 6.52%, 11/20/00 1,494,838
-----------
Ford Motor Credit Co. (4.0%)
40,000,000 6.49%, 11/02/00 39,992,789
10,000,000 6.48%, 01/04/01 9,884,800
10,000,000 6.53%, 01/11/01 9,871,214
-----------
59,748,803
-----------
General Motors Acceptance Corp. (3.7%)
25,000,000 6.50%, 11/08/00 24,968,403
20,000,000 6.48%, 11/10/00 19,967,600
10,000,000 6.54%, 01/10/01 9,872,833
-----------
54,808,836
-----------
--------------------------------------------------------------------------------
BANKS (11.4%)
Citicorp (3.0%)
45,000,000 6.50%, 12/08/00 44,699,376
-----------
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (CONTINUED)
--------------------------------------------------------------------------------
BANKS (CONTINUED)
J.P. Morgan & Co. (2.7%)
$10,000,000 6.48%, 11/02/00 $ 9,998,200
15,000,000 6.48%, 11/06/00 14,986,500
15,000,000 6.48%, 12/11/00 14,892,000
-----------
39,876,700
-----------
Suntrust Banks Inc. (3.7%)
20,000,000 6.48%, 11/15/00 19,949,600
25,000,000 6.49%, 11/21/00 24,909,861
10,000,000 6.48%, 11/27/00 9,953,200
-----------
54,812,661
-----------
Wells Fargo & Co. (2.0%)
30,000,000 6.50%, 10/30/00 29,989,167
-----------
169,377,904
-----------
--------------------------------------------------------------------------------
BROKER / DEALERS (12.9%)
Bear Stearns Cos., Inc. (2.7%)
10,000,000 6.54%, 11/02/01 9,887,367
10,000,000 6.54%, 01/05/01 9,881,917
6,000,000 6.53%, 01/10/01 5,923,817
15,000,000 6.74%, Variable, 02/28/01** 15,000,000
-----------
40,693,101
-----------
Goldman Sachs Group, Inc. (1.3%)
15,000,000 6.49%, 11/13/00 14,967,500
5,000,000 6.51%, 01/19/01 4,928,571
-----------
19,896,071
-----------
Merrill Lynch & Co. (3.0%)
5,000,000 6.53%, 11/06/00 4,995,465
1,750,000 6.50%, 11/13/00 1,746,208
20,000,000 6.53%, 01/08/01 19,753,311
19,000,000 6.52%, 01/10/01 18,759,122
-----------
45,254,106
-----------
Morgan Stanley Dean Witter & Co. (2.3%)
35,000,000 6.47%, 12/11/00 34,748,390
-----------
Salomon Smith Barney Inc. (3.6%)
9,999,000 6.51%, 11/01/00 9,999,000
6,772,000 6.50%, 11/02/00 6,770,777
1,825,000 6.50%, 11/10/00 1,822,034
35,000,000 6.53%, 01/04/01 34,593,689
-----------
53,185,500
-----------
--------------------------------------------------------------------------------
CAPTIVE FINANCING (2.9%)
Prudential Funding Corp. (2.9%)
9,391,000 6.48%, 11/09/00 9,377,477
30,000,000 6.48%, 11/10/00 29,951,400
5,000,000 6.55%, 01/02/01 4,943,597
-----------
44,272,474
-----------
--------------------------------------------------------------------------------
CONSUMER SALES FINANCE (11.1%)
American Express Credit Corp. (5.4%)
20,000,000 6.48%, 11/14/00 19,953,200
16,000,000 6.48%, 11/22/00 15,939,520
25,000,000 6.48%, 11/30/00 24,869,500
20,000,000 6.49%, 11/03/00 19,992,794
-----------
80,755,014
-----------
CONTINUED
26 NATIONWIDE
<PAGE> 31
[PHOTO]
STATEMENT OF INVESTMENTS NATIONWIDE(R) MONEY MARKET FUND (CONTINUED)
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (CONTINUED)
----------------------------------------------------------------------------------
<S> <C>
CONSUMER SALES / FINANCE (CONTINUED)
American General Finance Corp. (2.1%)
$25,000,000 6.48%, 11/22/00 $24,905,500
6,000,000 6.52%, 01/09/01 5,925,020
-----------
30,830,520
-----------
Associates First Capital Corp. (2.3% )
30,000,000 6.54%, 01/09/01 29,623,567
4,300,000 6.57%, 01/10/01 4,245,068
-----------
33,868,635
-----------
Household International, Inc.
(Private Placement*) (1.3%)
20,000,000 6.55%, 11/10/00 19,967,250
-----------
----------------------------------------------------------------------------------
DATA PROCESSING & REPRODUCTION (2.3%)
First Data Corp. (2.3%)
35,000,000 6.47%, 12/05/00 34,786,131
-----------
----------------------------------------------------------------------------------
DIVERSIFIED FINANCE (8.5%)
Caterpiller Financial Services Ltd. (0.2%)
3,600,000 6.54%, 11/08/00 3,595,422
-----------
CIT Group, Inc. (2.6%)
20,000,000 6.53%, 01/08/01 19,753,311
20,000,000 6.53%, 01/09/01 19,749,683
-----------
39,502,994
-----------
General Electric Capital Corp.
(Private Placement*) (3.0%)
5,000,000 6.52%, 11/08/00 4,993,661
15,000,000 6.50%, 11/14/00 14,964,792
5,000,000 6.53%, 01/08/01 4,938,328
2,778,000 6.57%, 01/09/01 2,743,018
15,000,000 6.53%, 01/11/01 14,806,821
3,000,000 6.55%, 01/19/01 2,956,879
-----------
45,403,499
-----------
Household Finance Corp. (2.7%)
35,000,000 6.50%, 11/09/00 34,949,444
5,000,000 6.45%, 01/05/01 4,941,771
-----------
39,891,215
-----------
----------------------------------------------------------------------------------
DRUGS (1.6%)
Glaxo Well PLC (1.6)
25,000,000 6.50%, 01/16/01 24,656,944
-----------
----------------------------------------------------------------------------------
ENVIRONMENTAL CONTROLS (0.1%)
Honeywell International Inc. (0.1%)
1,100,000 6.49%, 11/03/00 1,099,603
-----------
----------------------------------------------------------------------------------
FINANCIAL SERVICES / UTILITIES (1.6%)
National Rural Utilities Cooperative Finance Corp. (1.6%)
10,000,000 6.48%, 11/15/00 9,974,800
1,395,000 6.53%, 01/10/01 1,377,287
12,050,000 6.51%, 01/22/01 11,871,319
-----------
23,223,406
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (CONTINUED)
----------------------------------------------------------------------------------
<S> <C>
FOOD & BEVERAGE (2.1%)
Anheuser-Busch Cos. (0.2%)
$2,760,000 6.48%, 11/13/00 $ 2,754,038
-----------
Best Foods, Inc.(Private Placement*) (1.6%)
23,500,000 6.50%, 11/07/00 23,474,542
-----------
Heinz, (H.J.) Co. (0.3%)
4,830,000 6.55%, 11/07/00 4,824,727
-----------
----------------------------------------------------------------------------------
INSURANCE (1.4%)
Metlife Funding, Inc. (1.4%)
21,115,000 6.47%, 11/09/00 21,084,641
-----------
----------------------------------------------------------------------------------
LEASE / FINANCE (2.3%)
IBM Credit Corp. (2.3%)
35,000,000 6.40%, 11/1/00 35,000,000
-----------
----------------------------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES (1.6%)
Pitney Bowes Credit Corp. (1.6%)
23,406,000 6.60%, 11/01/00 23,406,000
-----------
----------------------------------------------------------------------------------
OIL & GAS / EQUIPMENT & SERVICES (0.7%)
Chevron Transport Corp. (Private Placement*) (0.7%)
10,000,000 6.49%, 11/01/00 9,983,775
-----------
----------------------------------------------------------------------------------
PACKAGING / CONTAINERS (2.0%)
Bemis Co., Inc. (2.0%)
30,000,000 6.49%, 11/06/00 29,972,958
-----------
----------------------------------------------------------------------------------
PREMIUM FINANCE (1.3%)
A.I. Credit Corp. (1.3%)
20,000,000 6.50%, 01/19/01 19,714,722
-----------
----------------------------------------------------------------------------------
RENTAL AUTO / EQUIPMENT (3.0%)
Hertz Corp. (3.0%)
5,000,000 6.49%, 11/02/00 4,999,099
20,000,000 6.49%, 11/03/00 19,992,789
15,000,000 6.48%, 11/08/00 14,981,100
5,000,000 6.48%, 11/28/00 4,975,700
-----------
44,948,688
-----------
----------------------------------------------------------------------------------
SPECIAL PURPOSE ENTITY (5.0%)
AIG Funding, Inc. (1.3%)
20,410,000 6.47%, 11/03/00 20,402,664
-----------
National City Credit Corp. (3.7%)
25,000,000 6.49%, 11/13/00 24,945,917
30,000,000 6.50%, 11/28/00 29,853,749
-----------
54,799,666
-----------
</TABLE>
CONTINUED
27 NATIONWIDE
<PAGE> 32
STATEMENT OF INVESTMENTS NATIONWIDE(R) MONEY MARKET FUND [CONTINUED]
--------------------------------------------------------------------------------
OCTOBER 31, 2000
PRINCIPAL SECURITY VALUE
COMMERCIAL PAPER (CONTINUED)
--------------------------------------------------------------------------------
SPECIALTY FINANCE (2.5%)
Sigma Finance Corp. (Private Placement*) (2.5%)
$20,000,000 6.51%, 11/16/00 $ 19,945,750
3,000,000 6.57%, 01/08/01 2,962,770
5,000,000 6.58%, 01/11/01 4,935,114
10,000,000 6.53%, 01/22/01 9,851,261
--------------
37,694,895
--------------
--------------------------------------------------------------------------------
TELECOMMUNICATIONS (1.2%)
SBC Communications Inc. (Private Placement*) (1.2%)
18,446,000 6.72%, 11/27/00 18,359,406
--------------
TOTAL COMMERCIAL PAPER (cost $1,430,223,151) 1,430,223,151
--------------
U.S. GOVERNMENT SPONSORED AND AGENCY OBLIGATIONS (4.7%)
GOVERNMENT AGENCY (4.7%)
--------------------------------------------------------------------------------
FHLB (2.0%)
FHLB (2.0%)
30,000,000 6.43%, 11/06/00 29,973,208
--------------
FHLMC (2.7%)
FHLMC (2.7%)
30,859,000 6.38%, 11/07/00 30,826,187
10,000,000 6.30%, 03/29/01 9,741,000
--------------
40,567,187
--------------
TOTAL U.S. GOVERNMENT SPONSORED
AND AGENCY OBLIGATIONS (cost $70,540,395) 70,540,395
--------------
CERTIFICATES OF DEPOSIT (0.3%)
--------------------------------------------------------------------------------
5,000,000 J.P. Morgan & Co., 6.80%, 04/16/01
(cost $5,000,000) 5,000,000
--------------
TOTAL INVESTMENTS (cost $1,505,763,546) $1,505,763,546
==============
--------------------------------------------------------------------------------
The abbreviations in the above statement stand for the following:
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corp.
COST FOR FEDERAL INCOME TAX AND FINANCIAL REPORTING PURPOSES ARE THE SAME.
* 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.
** VARIABLE RATE SECURITY. THE RATE REFLECTED IS THE RATE IN EFFECT ON
10/31/00.
PORTFOLIO HOLDING PERCENTAGES BASED ON NET ASSETS OF $1,497,414,676.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
28 NATIONWIDE
<PAGE> 33
[PHOTO]
STATEMENTS OF ASSETS AND LIABILITIES - THE STOCK FUNDS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
GARTMORE
MILLENNIUM NATIONWIDE NATIONWIDE
GROWTH FUND* GROWTH FUND FUND
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (cost
$60,779,275, $682,138,043, $1,619,620,576,
respectively) $ 62,049,367 $ 799,757,029 $2,033,635,239
Investments in short-term securities, at value
(cost $3,675,000, $53,894,000, $158,977,000, respectively) 3,674,323 53,884,053 158,947,808
Cash 133 498 31,125
Receivable for investment securities sold 4,025,403 14,149,772 50,623,658
Receivable for Fund shares sold 639 -- --
Receivable from adviser 15,810 -- --
Interest and dividends receivable 444 -- 1,201,281
Prepaid and other assets 22,145 8,691 45,515
-------------- -------------- --------------
Total assets $ 69,788,264 $ 867,800,043 $2,244,484,626
-------------- -------------- --------------
LIABILITIES
Payable for investment securities purchased 3,384,754 14,812,024 55,766,026
Payable for capital shares redeemed 465 -- --
Accrued expenses and other payables:
Investment advisory fees 58,399 431,746 1,028,343
Fund administration fees 3,969 41,318 85,812
Transfer agent fees 4,230 106,273 183,684
Distribution fees 11,071 9,008 50,729
Administrative servicing fees -- 34,536 96,004
Other 15,207 135,290 200,571
-------------- -------------- --------------
Total liabilities $ 3,478,095 $ 15,570,195 $ 57,411,169
-------------- -------------- --------------
NET ASSETS $ 66,310,169 $ 852,229,848 $2,187,073,457
============== ============== ==============
NET ASSETS REPRESENTED BY:
Capital $ 60,036,643 $ 558,002,865 $1,193,972,171
Accumulated net investment income -- -- 746,349
Net unrealized appreciation from investments 1,269,415 117,609,039 413,985,471
Accumulated net realized gains from investment transactions 5,004,111 176,617,944 578,369,466
-------------- -------------- --------------
NET ASSETS $ 66,310,169 $ 852,229,848 $2,187,073,457
============== ============== ==============
NET ASSETS:
Class A Shares $ 22,612,236 $ 9,233,842 $ 54,537,408
Class B Shares 7,607,572 8,180,309 47,292,989
Class D Shares 36,090,361 834,815,697 2,085,243,060
-------------- -------------- --------------
Total $ 66,310,169 $ 852,229,848 $2,187,073,457
============== ============== ==============
SHARES OUTSTANDING (unlimited number of shares authorized):
Class A Shares 788,187 615,865 1,770,963
Class B Shares 269,395 556,208 1,551,571
Class D Shares 1,255,452 55,559,874 67,981,637
-------------- -------------- --------------
Total 2,313,034 56,731,947 71,304,171
============== ============== ==============
NET ASSET VALUE:
Class A Shares $ 28.69 $ 14.99 $ 30.80
Class B Shares $ 28.24 $ 14.71 $ 30.48
Class D Shares $ 28.75 $ 15.03 $ 30.67
MAXIMUM OFFERING PRICE (100%/(100%-Maximum Sales Charge) of net asset value
adjusted to nearest cent) per share:**
Class A Shares $ 30.44 $ 15.90 $ 32.68
Class B Shares*** $ 28.24 $ 14.71 $ 30.48
Class D Shares $ 30.10 $ 15.74 $ 32.12
-------------- -------------- --------------
Maximum sales charge - Class A Shares 5.75% 5.75% 5.75%
============== ============== ==============
Maximum sales charge - Class D Shares 4.50% 4.50% 4.50%
============== ============== ==============
</TABLE>
* FORMERLY KNOWN AS NATIONWIDE MID CAP GROWTH FUND.
** CLASS A AND D SHARES INCLUDE A FRONT-END SALES CHARGE.
*** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD AND ARE NOT SUBJECT TO A FRONT-END SALES CHARGE.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
29 NATIONWIDE
<PAGE> 34
STATEMENTS OF ASSETS AND LIABILITIES - THE BOND FUNDS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
NATIONWIDE NATIONWIDE
NATIONWIDE LONG-TERM INTERMEDIATE
NATIONWIDE TAX-FREE U.S. GOVERNMENT U.S. GOVERNMENT
BOND FUND INCOME FUND BOND FUND BOND FUND
<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at value (cost $115,005,220,
$205,987,239, $27,227,772, $105,549,960, respectively) $ 111,487,429 $ 209,181,003 $ 27,972,808 $ 106,756,459
Investments in short-term securities, at value
(cost $2,542,000, $0, $0, $0, respectively) 2,541,531 -- -- --
Repurchase Agreements, at value (cost $0, $0, $4,249,000,
$4,567,000, respectively) -- -- 4,249,000 4,567,000
Cash 186 191,535 282 398
Receivable from adviser -- -- 3,419 4,375
Interest and dividends receivable 2,145,217 3,928,745 367,621 1,060,197
Prepaid and other assets 1,220 1,528 653 3,458
------------- ------------- ------------- -------------
Total assets $ 116,175,583 $ 213,302,811 $ 32,593,130 112,391,887
------------- ------------- ------------- -------------
LIABILITIES
Dividends payable 685,018 961,812 139,587 561,243
Payable for investment securities purchased 1,800,173 -- -- --
Accrued expenses and other payables:
Investment advisory fees 49,057 89,573 13,856 47,397
Fund administration fees 6,868 12,540 1,940 6,636
Transfer agent fees 13,877 12,651 4,072 --
Distribution fees 2,000 3,721 2,045 12,584
Administrative servicing fees 4,245 -- -- 10,002
Other 35,972 33,261 25,336 17,371
------------- ------------- ------------- -------------
Total liabilities $ 2,597,210 $ 1,113,558 $ 186,836 $ 655,233
------------- ------------- ------------- -------------
NET ASSETS $ 113,578,373 $ 212,189,253 $ 32,406,294 $ 111,736,654
============= ============= ============= =============
NET ASSETS:
Capital $ 129,193,882 $ 210,232,123 $ 32,135,848 $ 111,741,746
Accumulated (distribution in excess of)
net investment income 77,124 121,253 252 1,955
Net unrealized appreciation (depreciation) from
investments (3,518,260) 3,193,764 745,036 1,206,499
Accumulated net realized gains (losses) from investment
transactions (12,174,373) (1,357,887) (474,842) (1,213,546)
------------- ------------- ------------- -------------
NET ASSETS $ 113,578,373 $ 212,189,253 $ 32,406,294 $ 111,736,654
============= ============= ============= =============
NET ASSETS:
Class A Shares $ 3,457,928 $ 3,791,739 $ 3,766,724 $ 54,795,872
Class B Shares 1,707,338 4,060,652 1,724,199 1,128,622
Class D Shares 108,413,107 204,336,862 26,915,371 55,812,160
------------- ------------- ------------- -------------
Total $ 113,578,373 $ 212,189,253 $ 32,406,294 $ 111,736,654
============= ============= ============= =============
SHARES OUTSTANDING (unlimited number of shares authorized):
Class A Shares 395,378 377,740 342,859 5,478,873
Class B Shares 195,116 404,793 156,925 112,834
Class D Shares 12,377,139 20,372,857 2,448,693 5,578,115
------------- ------------- ------------- -------------
Total 12,967,633 21,155,390 2,948,477 11,169,822
============= ============= ============= =============
NET ASSET VALUE:
Class A Shares $ 8.75 $ 10.04 $ 10.99 $ 10.00
Class B Shares $ 8.75 $ 10.03 $ 10.99 $ 10.00
Class D Shares $ 8.76 $ 10.03 $ 10.99 $ 10.01
MAXIMUM OFFERING PRICE (100%/(100%-Maximum Sales Charge)
of net asset value adjusted to nearest cent) per share:*
Class A Shares $ 9.16 $ 10.51 $ 11.51 $ 10.47
Class B Shares** $ 8.75 $ 10.03 $ 10.99 $ 10.00
Class D Shares $ 9.17 $ 10.50 $ 11.51 $ 10.48
------------- ------------- ------------- -------------
Maximum sales charge - Class A and D Shares 4.50% 4.50% 4.50% 4.50%
============= ============= ============= =============
</TABLE>
* CLASS A AND D SHARES INCLUDE A FRONT-END SALES CHARGE.
** FOR CLASS B SHARES, THE REDEMPTION PRICE PER SHARE VARIES BY LENGTH OF TIME
SHARES ARE HELD.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
30 NATIONWIDE
<PAGE> 35
[PHOTO]
STATEMENT OF ASSETS AND LIABILITIES - THE MONEY MARKET FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
NATIONWIDE
MONEY MARKET
FUND
<S> <C>
ASSETS
Investments in short-term securities, at value (cost $1,505,763,546) $ 1,505,763,546
Receivable from adviser 27,315
Interest and dividends receivable 358,183
Prepaid and other assets 22,363
---------------
Total assets $ 1,506,171,407
---------------
LIABILITIES
Cash overdraft 6,869
Dividends payable 7,783,837
Accrued expenses and other payables:
Investment advisory fees 509,446
Fund administration fees 64,548
Transfer agent fees 80,458
Distribution fees 34,739
Administrative servicing fees 183,510
Other 93,324
---------------
Total liabilities $ 8,756,731
---------------
NET ASSETS $ 1,497,414,676
===============
NET ASSETS REPRESENTED BY:
Capital $ 1,497,202,002
Accumulated net investment income 222,275
Accumulated net realized losses from investment transactions (9,601)
---------------
Net assets $ 1,497,414,676
===============
NET ASSETS:
Service Class Shares 256,220,735
Prime Shares 1,241,193,941
---------------
Total $ 1,497,414,676
===============
SHARES OUTSTANDING (unlimited number of shares authorized):
Service Class Shares 256,222,024
Prime Shares 1,241,221,506
---------------
Total $ 1,497,443,530
===============
NET ASSET VALUE AND MAXIMUM OFFERING PRICE:*
Service Class Shares $ 1.00
Prime Shares $ 1.00
</TABLE>
* SERVICE CLASS AND PRIME SHARES ARE NOT SUBJECT TO A FRONT-END SALES CHARGE.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
31 NATIONWIDE
<PAGE> 36
STATEMENTS OF OPERATIONS - THE STOCK FUNDS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
GARTMORE
MILLENNIUM NATIONWIDE NATIONWIDE
GROWTH FUND* GROWTH FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 123,992 $ 1,357,153 $ 5,942,680
Dividend income 30,560 3,889,167 28,865,342
Withholding tax (19) -- --
------------- ------------- -------------
Total income 154,533 5,246,320 34,808,022
------------- ------------- -------------
EXPENSES:
Investment advisory fees 220,429 5,734,593 12,807,691
Fund administration fees 20,136 541,769 1,063,967
Custodian fees 22,328 69,902 55,041
Distribution fees 44,405 102,806 606,180
Administrative servicing fees 532 462,045 1,219,848
Professional fees 12,287 21,259 28,653
Trustees' fees and expenses 284 17,295 34,217
Transfer agent fees 57,122 992,246 1,841,252
Registration and filing fees 31,720 49,265 83,917
Shareholders' reports 12,314 283,969 592,893
Other 5,314 39,218 40,395
------------- ------------- -------------
Total expenses before waived or reimbursed expenses 426,871 8,314,367 18,374,054
Expenses waived or reimbursed (59,130) -- --
------------- ------------- -------------
Net expenses 367,741 8,314,367 18,374,054
------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) $ (213,208) $ (3,068,047) $ 16,433,968
============= ============= =============
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains on investment transactions $ 5,217,344 $ 176,640,957 $ 578,375,079
Net change in unrealized appreciation/depreciation on investments (1,540,548) (228,621,349) (575,706,541)
------------- ------------- -------------
Net realized/unrealized gains (losses) on investments 3,676,796 (51,980,392) 2,668,538
------------- ------------- -------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,463,588 $ (55,048,439) $ 19,102,506
============= ============= =============
</TABLE>
* FORMERLY KNOWN AS NATIONWIDE MID CAP GROWTH FUND
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
32 NATIONWIDE
<PAGE> 37
[PHOTO]
STATEMENTS OF OPERATIONS - THE BOND FUNDS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
NATIONWIDE NATIONWIDE
NATIONWIDE LONG-TERM INTERMEDIATE
NATIONWIDE TAX-FREE U.S. GOVERNMENT U.S. GOVERNMENT
BOND FUND INCOME FUND BOND FUND BOND FUND
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest Income $ 8,947,137 $ 13,221,362 $ 2,175,501 $ 7,234,381
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees 600,602 1,093,502 167,881 530,376
Fund administration fees 84,085 153,092 23,504 74,254
Custodian fees 9,233 27,170 -- 5,801
Distribution fees 22,997 39,912 22,347 142,252
Administrative servicing fees 50,321 -- 1 108,377
Professional fees 15,399 15,935 6,591 15,768
Trustees' fees and expenses 3,083 4,058 208 1,656
Transfer agent fees 27,453 25,832 42,455 30,542
Registration and filing fees 35,090 31,771 29,910 36,662
Shareholders' reports 36,824 44,513 9,446 13,235
Other 135,828 140,113 2,579 23,112
------------ ------------ ------------ ------------
Total expenses before waived or reimbursed expenses 1,020,915 1,575,898 304,922 982,035
Expenses waived or reimbursed -- -- (17,544) (32,080)
------------ ------------ ------------ ------------
Net expenses 1,020,915 1,575,898 287,378 949,955
------------ ------------ ------------ ------------
NET INVESTMENT INCOME $ 7,926,222 $ 11,645,464 $ 1,888,123 $ 6,284,426
------------ ------------ ------------ ------------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized losses on investment transactions $ (4,699,867) $ (233,249) $ (476,854) $ (1,215,687)
Net change in unrealized appreciation/depreciation on investments 146,975 5,455,447 1,270,352 2,764,161
------------ ------------ ------------ ------------
Net realized/unrealized gains (losses) on investments (4,552,892) 5,222,198 793,498 1,548,474
------------ ------------ ------------ ------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,373,330 $ 16,867,662 $ 2,681,621 $ 7,832,900
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
33 NATIONWIDE
<PAGE> 38
STATEMENT OF OPERATIONS - THE MONEY MARKET FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
NATIONWIDE
MONEY MARKET
FUND
<S> <C>
INVESTMENT INCOME
Interest income $ 88,845,140
Dividend income 849,664
------------
Total income $ 89,694,804
------------
EXPENSES:
Investment advisory fees 5,651,029
Fund administration fees 723,852
Custodian fees 30,087
Distribution fees 225,891
Administrative servicing fees 1,642,573
Professional fees 36,487
Trustees' fees and expenses 26,246
Transfer agent fees 989,953
Registration and filing fees 75,448
Shareholders' reports 301,776
Other 45,391
------------
Total expenses before waived or reimbursed expenses 9,748,733
Expenses waived or reimbursed (217,323)
------------
Net expenses 9,531,410
------------
NET INVESTMENT INCOME $ 80,163,394
============
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized loss on investment transactions $ (9,601)
Net change in unrealized appreciation/depreciation on investments --
------------
Net realized/unrealized loss on investments (9,601)
------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $ 80,153,793
============
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
34 NATIONWIDE
<PAGE> 39
[PHOTO]
STATEMENTS OF CHANGES IN NET ASSETS - THE STOCK FUNDS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
GARTMORE
MILLENNIUM NATIONWIDE
GROWTH FUND* GROWTH FUND
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss) $ (213,208) $ (16,146) $ (3,068,047) $ 1,898,011
Net realized gains on investment
transactions 5,217,344 868,439 176,640,957 135,282,133
Net change in unrealized appreciation
(depreciation) on investments (1,540,548) 429,235 (228,621,349) 16,713,526
--------------- --------------- --------------- ---------------
Change in net assets resulting from operations 3,463,588 1,281,528 (55,048,439) 153,893,670
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income -- -- -- (3,786)
Net realized gains from investment transactions (98,639) (5,140) (1,145,271) (56,830)
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income -- -- -- 23
Net realized gains from investment transactions (69,772) (4,303) (888,511) (35,601)
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM:
Net investment income (5) (83) (43,670) (1,832,458)
In excess of net investment income -- -- (21,631) --
Net realized gains from investment transactions (685,099) (119,176) (132,931,069) (17,467,990)
--------------- --------------- --------------- ---------------
CHANGE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (853,515) (128,702) (135,030,152) (19,396,642)
--------------- --------------- --------------- ---------------
CAPITAL TRANSACTIONS:**
Proceeds from shares issued 69,444,355 3,491,475 64,278,743 123,060,029
Distributions reinvested 848,242 127,639 132,923,221 19,106,166
Cost of shares redeemed (18,619,655) (2,323,070) (183,444,350) (166,677,669)
--------------- --------------- --------------- ---------------
Change in net assets from capital transactions 51,672,942 1,296,044 13,757,614 (24,511,474)
--------------- --------------- --------------- ---------------
Change in net assets 54,283,015 2,448,870 (176,320,977) 109,985,554
NET ASSETS:
Beginning of period 12,027,154 9,578,284 1,028,550,825 918,565,271
--------------- --------------- --------------- ---------------
End of period $ 66,310,169 $ 12,027,154 $ 852,229,848 $ 1,028,550,825
=============== =============== =============== ===============
SHARE ACTIVITY:**
Sold 2,300,841 179,530 3,877,868 7,044,994
Reinvested 45,090 7,248 7,912,344 1,196,914
Redeemed (644,215) (119,492) (11,077,533) (9,552,040)
--------------- --------------- --------------- ---------------
Change in shares 1,701,716 67,286 712,679 (1,310,132)
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
NATIONWIDE
FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss) $ 16,433,968 $ 18,976,199
Net realized gains on investment
transactions 578,375,079 155,729,091
Net change in unrealized appreciation
(depreciation) on investments (575,706,541) 57,076,428
--------------- ---------------
Change in net assets resulting from operations 19,102,506 231,781,718
--------------- ---------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (319,517) (131,039)
Net realized gains from investment transactions (3,584,973) (384,917)
--------------- ---------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (40) 635
Net realized gains from investment transactions (2,939,585) (264,789)
--------------- ---------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM:
Net investment income (16,814,056) (18,122,796)
In excess of net investment income -- --
Net realized gains from investment transactions (149,208,236) (35,567,422)
--------------- ---------------
CHANGE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (172,866,407) (54,470,328)
--------------- ---------------
CAPITAL TRANSACTIONS:**
Proceeds from shares issued 143,076,719 423,168,894
Distributions reinvested 165,839,226 52,127,337
Cost of shares redeemed (510,788,908) (315,237,235)
--------------- ---------------
Change in net assets from capital transactions (201,872,963) 160,058,996
--------------- ---------------
Change in net assets (355,636,864) 337,370,386
NET ASSETS:
Beginning of period 2,542,710,321 2,205,339,935
--------------- ---------------
End of period $ 2,187,073,457 $ 2,542,710,321
=============== ===============
SHARE ACTIVITY:**
Sold 4,710,365 13,206,280
Reinvested 5,643,367 1,677,000
Redeemed (17,052,486) (9,761,097)
--------------- ---------------
Change in shares (6,698,754) 5,122,183
=============== ===============
</TABLE>
* FORMERLY KNOWN AS NATIONWIDE MID CAP GROWTH FUND.
** BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT ALL
CLASSES OF SHARES.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
35 NATIONWIDE
<PAGE> 40
STATEMENTS OF CHANGES IN NET ASSETS - THE BOND FUNDS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
NATIONWIDE NATIONWIDE
BOND FUND TAX-FREE INCOME FUND
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 7,926,222 $ 7,897,963 $ 11,645,464 $ 12,323,163
Net realized gains (losses) on
investment transactions (4,699,867) (670,481) (233,249) (784,649)
Net change in unrealized appreciation
(depreciation) on investments 146,975 (8,990,234) 5,455,447 (19,172,551)
------------- ------------- ------------- -------------
Change in net assets resulting from operations 3,373,330 (1,762,752) 16,867,662 (7,634,037)
------------- ------------- ------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (212,713) (150,672) (121,076) (71,793)
In excess of net investment income -- -- (7,735) --
Net realized gains from investment transactions -- -- -- (3,091)
------------- ------------- ------------- -------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (100,948) (66,930) (167,326) (117,051)
In excess of net investment income -- -- (10,690) --
Net realized gains from investment transactions -- -- -- (7,763)
------------- ------------- ------------- -------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM:
Net investment income (7,612,561) (7,680,036) (10,663,091) (12,285,133)
In excess of net investment income -- -- (681,220) --
Net realized gains from investment transactions -- -- -- (1,046,001)
------------- ------------- ------------- -------------
CHANGE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (7,926,222) (7,897,638) (11,651,138) (13,530,832)
------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS:*
Proceeds from shares issued 15,517,663 31,686,369 10,886,748 17,639,757
Distributions reinvested 6,292,070 6,810,486 7,516,189 9,665,414
Cost of shares redeemed (33,977,644) (35,213,957) (43,829,419) (39,481,013)
------------- ------------- ------------- -------------
Change in net assets from capital transactions (12,167,911) 3,282,898 (25,426,482) (12,175,842)
------------- ------------- ------------- -------------
Change in net assets (16,720,803) (6,377,492) (20,209,958) (33,340,711)
NET ASSETS:
Beginning of period 130,299,176 136,676,668 232,399,211 265,739,922
------------- ------------- ------------- -------------
End of period $ 113,578,373 $ 130,299,176 $ 212,189,253 $ 232,399,211
============= ============= ============= =============
SHARE ACTIVITY:*
Sold 1,744,814 3,326,367 1,105,849 1,692,989
Reinvested 709,108 725,838 765,528 932,454
Redeemed (3,824,357) (3,719,488) (4,467,216) (3,805,696)
------------- ------------- ------------- -------------
Change in shares (1,370,435) 332,717 (2,595,839) (1,180,253)
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
NATIONWIDE LONG-TERM
U.S. GOVERNMENT BOND FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 1,888,123 $ 2,142,473
Net realized gains (losses) on
investment transactions (476,854) 753,447
Net change in unrealized appreciation
(depreciation) on investments 1,270,352 (3,960,048)
------------- -------------
Change in net assets resulting from operations 2,681,621 (1,064,128)
------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (156,583) (63,942)
In excess of net investment income -- --
Net realized gains from investment transactions (30,528) --
------------- -------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (86,309) (57,853)
In excess of net investment income -- --
Net realized gains from investment transactions (28,806) --
------------- -------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM:
Net investment income (1,645,543) (2,019,540)
In excess of net investment income -- --
Net realized gains from investment transactions (471,437) --
------------- -------------
CHANGE IN NET ASSETS FROM SHAREHOLDER
DISTRIBUTIONS (2,419,206) (2,141,335)
------------- -------------
CAPITAL TRANSACTIONS:*
Proceeds from shares issued 3,477,948 7,042,834
Distributions reinvested 1,518,248 1,222,509
Cost of shares redeemed (8,885,462) (10,525,237)
------------- -------------
Change in net assets from capital transactions (3,889,266) (2,259,894)
------------- -------------
Change in net assets (3,626,851) (5,465,357)
NET ASSETS:
Beginning of period 36,033,145 41,498,502
------------- -------------
End of period $ 32,406,294 $ 36,033,145
============= =============
SHARE ACTIVITY:*
Sold 324,128 620,380
Reinvested 142,072 108,997
Redeemed (830,088) (942,952)
------------- -------------
Change in shares (363,888) (213,575)
============= =============
</TABLE>
* BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT ALL
CLASSES OF SHARES.
CONTINUED
36 NATIONWIDE
<PAGE> 41
[PHOTO]
STATEMENTS OF CHANGES IN NET ASSETS - THE BOND FUNDS CONTINUED
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
NATIONWIDE INTERMEDIATE
U.S. GOVERNMENT BOND FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 6,284,426 $ 3,302,692
Net realized gains (losses) on investment transactions (1,215,687) 233,150
Net change in unrealized appreciation (depreciation) on investments 2,764,161 (3,615,067)
------------- -------------
Change in net assets resulting from operations 7,832,900 (79,225)
------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income (3,096,861) (480,069)
Net realized gains from investment transactions (113,377) (1,762)
------------- -------------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income (58,435) (33,885)
Net realized gains from investment transactions (2,404) (2,063)
------------- -------------
DISTRIBUTIONS TO CLASS D SHAREHOLDERS FROM:
Net investment income (3,129,128) (2,788,883)
Net realized gains from investment transactions (117,039) (253,467)
------------- -------------
Change in net assets from shareholder distributions (6,517,244) (3,560,129)
------------- -------------
CAPITAL TRANSACTIONS:*
Proceeds from shares issued 41,111,867 85,637,352
Distributions reinvested 5,447,269 3,000,445
Cost of shares redeemed (39,147,923) (33,466,295)
------------- -------------
Change in net assets from capital transactions 7,411,213 55,171,502
------------- -------------
Change in net assets 8,726,869 51,532,148
NET ASSETS:
Beginning of period 103,009,785 51,477,637
------------- -------------
End of period $ 111,736,654 $ 103,009,785
============= =============
SHARE ACTIVITY:*
Sold 4,185,740 8,532,370
Reinvested 555,788 296,211
Redeemed (3,988,959) (3,282,411)
------------- -------------
Change in shares 752,569 5,546,170
============= =============
</TABLE>
* BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT ALL
CLASSES OF SHARES.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
37 NATIONWIDE
<PAGE> 42
STATEMENTS OF CHANGES IN NET ASSETS - THE MONEY MARKET FUND
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
NATIONWIDE
MONEY MARKET FUND
YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 80,163,394 $ 53,670,619
Net realized gains (losses) on investment transactions (9,601) --
--------------- ---------------
Change in net assets resulting from operations 80,153,793 53,670,619
--------------- ---------------
DISTRIBUTIONS TO SERVICE CLASS SHAREHOLDERS FROM:
Net investment income (8,556,299) (182,912)
--------------- ---------------
DISTRIBUTIONS TO PRIME CLASS SHAREHOLDERS FROM:
Net investment income (71,606,865) (53,487,804)
--------------- ---------------
CHANGE IN NET ASSETS FROM SHAREHOLDER DISTRIBUTIONS (80,163,164) (53,670,716)
--------------- ---------------
CAPITAL TRANSACTIONS:*
Proceeds from shares issued 2,732,841,293 1,458,075,654
Distributions reinvested 69,926,738 51,439,932
Cost of shares redeemed (2,672,980,584) (1,190,567,730)
--------------- ---------------
Change in net assets from capital transactions 129,787,447 318,947,856
--------------- ---------------
Change in net assets 129,778,076 318,947,759
NET ASSETS:
Beginning of period 1,367,636,600 1,048,688,841
--------------- ---------------
End of period $ 1,497,414,676 $ 1,367,636,600
=============== ===============
SHARE ACTIVITY:*
Sold 2,732,843,194 1,458,096,838
Reinvested 69,924,748 51,439,932
Redeemed (2,672,980,678) (1,190,567,730)
--------------- ---------------
Change in shares 129,787,264 318,969,040
=============== ===============
</TABLE>
* BOTH THE CAPITAL SHARE TRANSACTIONS AND SHARE ACTIVITY SECTIONS REPRESENT BOTH
CLASSES OF SHARES.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
38 NATIONWIDE
<PAGE> 43
[PHOTO]
FINANCIAL HIGHLIGHTS - GARTMORE MILLENNIUM GROWTH FUND*
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 19.70 $ 17.67 $ 19.67
---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income (loss) (0.27)+ (0.03) (0.03)
Net realized and unrealized gain (loss) 10.63+ 2.30 (1.97)
---------- ---------- ----------
Total investment activities 10.36 2.27 (2.00)
---------- ---------- ----------
DISTRIBUTIONS
Net realized gains (1.37) (0.24) --
---------- ---------- ----------
Total distributions (1.37) (0.24) --
---------- ---------- ----------
Net increase (decrease) in net asset value 8.99 2.03 (2.00)
---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 28.69 $ 19.70 $ 17.67
========== ========== ==========
Total Return (excluding sales charges) 56.20% 12.98% (10.17%)(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 22,612 $ 1,244 $ 305
Ratio of expenses to average net assets 1.47% 1.25% 1.23% (c)
Ratio of net investment income (loss) to average net assets (0.95%) (0.24%) (0.70%)(c)
Ratio of expenses to average net assets** 1.67% 1.83% 2.21% (c)
Portfolio turnover rate (d) 330.32% 36.58% 46.33% (b)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 19.44 $ 17.54 $ 19.67
---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income (loss) (0.42)+ (0.12) (0.07)
Net realized and unrealized gain (loss) 10.59+ 2.26 (2.06)
---------- ---------- ----------
Total investment activities 10.17 2.14 (2.13)
---------- ---------- ----------
DISTRIBUTIONS
Net realized gains (1.37) (0.24) --
---------- ---------- ----------
Total distributions (1.37) (0.24) --
---------- ---------- ----------
Net increase (decrease) in net asset value 8.80 1.90 (2.13)
---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 28.24 $ 19.44 $ 17.54
========== ========== ==========
Total Return (excluding sales charges) 55.97% 2.33% (10.83%)(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 7,608 $ 918 $ 251
Ratio of expenses to average net assets 2.10% 2.00% 2.00% (c)
Ratio of net investment income (loss) to average net assets (1.57%) (1.01%) (1.47%)(c)
Ratio of expenses to average net assets** 2.35% 2.59% 2.98% (c)
Portfolio turnover rate (d) 330.32% 36.58% 46.33% (b)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 1998 (a) 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 19.69 $ 17.61 $ 22.87 $ 19.47 $ 18.17
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income (loss) (0.14)+ (0.02) (0.06) 0.04 0.01
Net realized and unrealized gain 10.57+ 2.34 1.29 4.38 3.28
---------- ---------- ---------- ---------- ----------
Total investment activities 10.43 2.32 1.23 4.42 3.29
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS
Net investment income -- -- -- (0.03) --
Net realized gains (1.37) (0.24) (6.49) (0.99) (1.99)
---------- ---------- ---------- ---------- ----------
Total distributions (1.37) (0.24) (6.49) (1.02) (1.99)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 9.06 2.08 (5.26) 3.40 1.30
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 28.75 $ 19.69$ 17.61 $ 22.87 $ 19.47
========== ========== ========== ========== ==========
Total Return (excluding sales charge) 56.61% 13.31% 5.11% 23.66% 19.41%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 36,090 $ 9,865 $ 9,022 $ 9,541 $ 9,095
Ratio of expenses to average net assets 1.10% 1.00% 0.93% 0.96% 1.44%
Ratio of net investment income to average net assets (0.55%) (0.09%) (0.30%) 0.20% 0.03%
Ratio of expenses to average net assets** 1.30% 1.53% 1.57% 1.70% 1.69%
Portfolio turnover rate (d) 330.32% 36.58% 46.33% 40.69% 17.19%
</TABLE>
* FORMERLY KNOWN AS NATIONWIDE MID CAP GROWTH FUND.
** RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
+ CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD.
(a) SHARES FIRST OFFERED TO PUBLIC ON MAY 11, 1998. UPON A TRUST REORGANIZATION
ON MAY 11, 1998, THE EXISTING SHARES OF THE FUND WERE RENAMED CLASS D.
(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.
39 NATIONWIDE
<PAGE> 44
FINANCIAL HIGHLIGHTS - NATIONWIDE GROWTH FUND
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 18.35 $ 16.02 $ 16.51
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income (loss) (0.08) 0.01 (0.02)
Net realized and unrealized gain (loss) (0.84) 2.64 (0.47)
--------- --------- ---------
Total investment activities (0.92) 2.65 (0.49)
--------- --------- ---------
DISTRIBUTIONS
Net investment income -- (0.01) --
Net realized gains (2.44) (0.31) --
--------- --------- ---------
Total distributions (2.44) (0.32) --
--------- --------- ---------
Net increase (decrease) in net asset value (3.36) 2.33 (0.49)
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 14.99 $ 18.35 $ 16.02
========= ========= =========
Total Return (excluding sales charges) (6.43%) 16.85% (2.97%)(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 9,234 $ 7,654 $ 2,830
Ratio of expenses to average net assets 1.04% 1.04% 1.11% (c)
Ratio of net investment income to average net assets (0.52%) (0.02%) (0.38%)(c)
Portfolio turnover rate (d) 163.52% 35.18% 38.61% (b)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 18.20 $ 15.98 $ 16.51
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income (loss) (0.15) (0.06) (0.04)
Net realized and unrealized gain (loss) (0.90) 2.59 (0.49)
--------- --------- ---------
Total investment activities (1.05) 2.53 (0.53)
--------- --------- ---------
DISTRIBUTIONS
Net investment income -- -- --
Net realized gains (2.44) (0.31) --
--------- --------- ---------
Total distributions (2.44) (0.31) --
--------- --------- ---------
Net increase (decrease) in net asset value (3.49) 2.22 (0.53)
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 14.71 $ 18.20 $ 15.98
========= ========= =========
Total Return (excluding sales charges) (7.30%) 16.12% (3.21%)(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 8,180 $ 6,210 $ 1,557
Ratio of expenses to average net assets 1.80% 1.79% 1.88% (c)
Ratio of net investment income to average net assets (1.28%) (0.76%) (1.16%)(c)
Portfolio turnover rate (d) 163.52% 35.18% 38.61% (b)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 1998 (a) 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 18.36 $ 16.02 $ 16.32 $ 13.34 $ 13.22
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES
Net investment income (loss) (0.05) 0.03 0.03 0.12 0.16
Net realized and unrealized gain (loss) (0.84) 2.65 2.32 3.94 1.36
----------- ----------- ----------- ----------- -----------
Total investment activities (0.89) 2.68 2.35 4.06 1.52
----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS
Net investment income -- (0.03) (0.03) (0.12) (0.16)
In excess of net investment income -- -- (0.01) -- --
Net realized gains (2.44) (0.31) (2.61) (0.96) (1.24)
----------- ----------- ----------- ----------- -----------
Total distributions (2.44) (0.34) (2.65) (1.08) (1.40)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value (3.33) 2.34 (0.30) 2.98 0.12
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $ 15.03 $ 18.36 $ 16.02 $ 16.32 $ 13.34
=========== =========== =========== =========== ===========
Total Return (excluding sales charges) (6.23%) 17.07% 15.94% 32.12% 12.36%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 834,816 $ 1,014,687 $ 914,178 $ 818,124 $ 655,616
Ratio of expenses to average net assets 0.83% 0.80% 0.73% 0.64% 0.64%
Ratio of net investment income to average net assets (0.30%) 0.19% 0.19% 0.81% 1.20%
Portfolio turnover rate (d) 163.52% 35.18% 38.61% 45.07% 25.61%
</TABLE>
(a) SHARES FIRST OFFERED TO PUBLIC ON MAY 11, 1998. UPON A TRUST REORGANIZATION
ON MAY 11, 1998, THE EXISTING SHARES OF THE FUND WERE RENAMED CLASS D.
(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.
40 NATIONWIDE
<PAGE> 45
[PHOTO]
FINANCIAL HIGHLIGHTS - NATIONWIDE FUND
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 32.71 $ 30.30 $ 29.94
---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income (loss) 0.16 0.17 0.06
Net realized and unrealized gain 0.14 2.84 0.38
---------- ---------- ----------
Total investment activities 0.30 3.01 0.44
---------- ---------- ----------
DISTRIBUTIONS
Net investment income (0.17) (0.11) (0.08)
Net realized gains (2.04) (0.49) --
---------- ---------- ----------
Total distributions (2.21) (0.60) (0.08)
---------- ---------- ----------
Net increase (decrease) in net asset value (1.91) 2.41 0.35
---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 30.80 $ 32.71 $ 30.30
========== ========== ==========
Total Return (excluding sales charges) 1.25% 10.05% 1.48%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 54,537 $ 54,223 $ 19,746
Ratio of expenses to average net assets 0.98% 0.96% 1.00%(c)
Ratio of net investment income to average net assets 0.54% 0.53% 0.54%(c)
Portfolio turnover rate (d) 90.01% 13.88% 13.47%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 32.45 $ 30.18 $ 29.94
---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income (loss) (0.06) (0.03) --
Net realized and unrealized gain 0.13 2.79 0.27
---------- ---------- ----------
Total investment activities 0.07 2.76 0.27
---------- ---------- ----------
DISTRIBUTIONS
Net investment income -- -- (0.03)
Net realized gains (2.04) (0.49) --
---------- ---------- ----------
Total distributions (2.04) (0.49) (0.03)
---------- ---------- ----------
Net increase (decrease) in net asset value (1.97) 2.27 0.24
---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 30.48 $ 32.45 $ 30.18
========== ========== ==========
Total Return (excluding sales charges) 0.48% 9.22% 0.90% (b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 47,293 $ 44,994 $ 13,493
Ratio of expenses to average net assets 1.73% 1.72% 1.75% (c)
Ratio of net investment income to average net assets (0.20%) (0.21%) (0.20%)(c)
Portfolio turnover rate (d) 90.01% 13.88% 13.47% (b)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31,
2000
<S> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 32.60
-------------
INVESTMENT ACTIVITIES
Net investment income 0.23
Net realized and unrealized gain 0.12
-------------
Total investment activities 0.35
-------------
DISTRIBUTIONS
Net investment income (0.24)
Net realized gains (2.04)
-------------
Total distributions (2.28)
-------------
Net increase (decrease) in net asset value (1.93)
-------------
NET ASSET VALUE--END OF PERIOD $ 30.67
=============
Total Return (excluding sales charges) 1.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 2,085,243
Ratio of expenses to average net assets 0.78%
Ratio of net investment income to average net assets 0.74%
Portfolio turnover rate (d) 90.01%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1999 1998 (a) 1997 1996
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 30.26 $ 26.57 $ 20.41 $ 17.35
------------- ------------- ------------- -------------
INVESTMENT ACTIVITIES
Net investment income 0.25 0.30 0.31 0.36
Net realized and unrealized gain 2.82 6.23 7.44 3.98
------------- ------------- ------------- -------------
Total investment activities 3.07 6.53 7.75 4.34
------------- ------------- ------------- -------------
DISTRIBUTIONS
Net investment income (0.24) (0.30) (0.31) (0.35)
Net realized gains (0.49) (2.54) (1.28) (0.93)
------------- ------------- ------------- -------------
Total distributions (0.73) (2.84) (1.59) (1.28)
------------- ------------- ------------- -------------
Net increase (decrease) in net asset value 2.34 3.69 6.16 3.06
------------- ------------- ------------- -------------
NET ASSET VALUE--END OF PERIOD $ 32.60 $ 30.26 $ 26.57 $ 20.41
============= ============= ============= =============
Total Return (excluding sales charges) 10.27% 25.73% 40.17% 26.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 2,443,493 $ 2,172,101 $ 1,448,422 $ 958,590
Ratio of expenses to average net assets 0.73% 0.66% 0.60% 0.61%
Ratio of net investment income to average net assets 0.78% 1.00% 1.32% 1.89%
Portfolio turnover rate (d) 13.88% 13.47% 14.94% 16.71%
</TABLE>
(a) SHARES FIRST OFFERED TO PUBLIC ON MAY 11, 1998. UPON A TRUST REORGANIZATION
ON MAY 11, 1998, THE EXISTING SHARES OF THE FUND WERE RENAMED CLASS D.
(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.
41 NATIONWIDE
<PAGE> 46
FINANCIAL HIGHLIGHTS - NATIONWIDE BOND FUND
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998(a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.07 $ 9.75 $ 9.52
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.57 0.53 0.26
Net realized and unrealized gain (loss) (0.32) (0.68) 0.23
--------- --------- ---------
Total investment activities 0.25 (0.15) 0.49
--------- --------- ---------
DISTRIBUTIONS
Net investment income (0.57) (0.53) (0.26)
--------- --------- ---------
Total distributions (0.57) (0.53) (0.26)
--------- --------- ---------
Net increase (decrease) in net asset value (0.32) (0.68) 0.23
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 8.75 $ 9.07 $ 9.75
========= ========= =========
Total Return (excluding sales charges) 2.87% (1.58%) 5.18%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 3,458 $ 3,186 $ 1,365
Ratio of expenses to average net assets 1.05% 1.08% 1.17%(c)
Ratio of net investment income to average net assets 6.42% 5.67% 5.48%(c)
Portfolio turnover rate (d) 72.80% 64.26% 70.31%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998(a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.08 $ 9.75 $ 9.52
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.52 0.47 0.23
Net realized and unrealized gain (loss) (0.33) (0.67) 0.23
--------- --------- ---------
Total investment activities 0.19 (0.20) 0.46
--------- --------- ---------
DISTRIBUTIONS
Net investment income (0.52) (0.47) (0.23)
--------- --------- ---------
Total distributions (0.52) (0.47) (0.23)
--------- --------- ---------
Net increase (decrease) in net asset value (0.33) (0.67) 0.23
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 8.75 $ 9.08 $ 9.75
========= ========= =========
Total Return (excluding sales charges) 2.15% (2.07%) 4.85%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 1,707 $ 1,662 $ 490
Ratio of expenses to average net assets 1.64% 1.68% 1.81%(c)
Ratio of net investment income to average net assets 5.83% 5.07% 4.93%(c)
Portfolio turnover rate (d) 72.80% 64.26% 70.31%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 1998 (a) 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.09 $ 9.76 $ 9.49 $ 9.34 $ 9.50
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES
Net investment income 0.59 0.55 0.57 0.60 0.61
Net realized and unrealized gain (loss) (0.33) (0.67) 0.27 0.15 (0.15)
----------- ----------- ----------- ----------- -----------
Total investment activities 0.26 (0.12) 0.84 0.75 0.46
----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS
Net investment income (0.59) (0.55) (0.57) (0.60) (0.62)
----------- ----------- ----------- ----------- -----------
Total distributions (0.59) (0.55) (0.57) (0.60) (0.62)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value (0.33) (0.67) 0.27 0.15 (0.16)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $ 8.76 $ 9.09 $ 9.76 $ 9.49 $ 9.34
=========== =========== =========== =========== ===========
Total Return (excluding sales charges) 2.97% (1.24%) 9.11% 8.33% 5.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 108,413 $ 125,451 $ 134,822 $ 124,404 $ 133,253
Ratio of expenses to average net assets 0.83% 0.83% 0.78% 0.72% 0.70%
Ratio of net investment income to average net assets 6.62% 5.86% 5.93% 6.43% 6.60%
Portfolio turnover rate (d) 72.80% 64.26% 70.31% 70.63% 38.95%
</TABLE>
(a) SHARES FIRST OFFERED TO PUBLIC ON MAY 11, 1998. UPON A TRUST REORGANIZATION
ON MAY 11, 1998, THE EXISTING SHARES OF THE FUND WERE RENAMED CLASS D.
(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 THE FINANCIAL STATEMENTS.
42 NATIONWIDE
<PAGE> 47
[PHOTO]
FINANCIAL HIGHLIGHTS - NATIONWIDE TAX-FREE INCOME FUND
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998(a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.79 $ 10.65 $ 10.48
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.50 0.49 0.23
Net realized and unrealized gain (loss) 0.25 (0.82) 0.17
--------- --------- ---------
Total investment activities 0.75 (0.33) 0.40
--------- --------- ---------
DISTRIBUTIONS
Net investment income (0.50) (0.49) (0.23)
In excess of net investment income -- -- --
Net realized gains -- (0.04) --
--------- --------- ---------
Total distributions (0.50) (0.53) (0.23)
--------- --------- ---------
Net increase (decrease) in net asset value 0.25 (0.86) 0.17
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 10.04 $ 9.79 $ 10.65
========= ========= =========
Total Return (excluding sales charges) 7.90% (3.26%) 3.86%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 3,792 $ 2,383 $ 601
Ratio of expenses to average net assets 0.94% 0.96% 1.06%(c)
Ratio of net investment income to average net assets 5.09% 4.73% 4.50%(c)
Portfolio turnover rate (d) 7.08% 42.26% 28.88%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998(a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.78 $ 10.66 $ 10.48
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.44 0.42 0.20
Net realized and unrealized gain (loss) 0.25 (0.83) 0.18
--------- --------- ---------
Total investment activities 0.69 (0.41) 0.38
--------- --------- ---------
DISTRIBUTIONS
Net investment income (0.41) (0.43) (0.20)
In excess of net investment income (0.03) -- --
Net realized gains -- (0.04) --
--------- --------- ---------
Total distributions (0.44) (0.47) (0.20)
--------- --------- ---------
Net increase (decrease) in net asset value 0.25 (0.88) 0.18
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 10.03 $ 9.78 $ 10.66
========= ========= =========
Total Return (excluding sales charges) 7.27% (4.02%) 3.66%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 4,061 $ 3,746 $ 1,477
Ratio of expenses to average net assets 1.55% 1.56% 1.66%(c)
Ratio of net investment income to average net assets 4.50% 4.12% 3.94%(c)
Portfolio turnover rate (d) 7.08% 42.26% 28.88%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 1998 (a) 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.78 $ 10.66 $ 10.51 $ 10.24 $ 10.22
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES
Net investment income 0.53 0.51 0.50 0.50 0.51
Net realized and unrealized gain (loss) 0.25 (0.84) 0.23 0.27 0.02
----------- ----------- ----------- ----------- -----------
Total investment activities 0.78 (0.33) 0.73 0.77 0.53
----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS
Net investment income (0.50) (0.51) (0.50) (0.50) (0.51)
In excess of net investment income (0.03) -- -- -- --
Net realized gains -- (0.04) (0.08) -- --
----------- ----------- ----------- ----------- -----------
Total distributions (0.53) (0.55) (0.58) (0.50) (0.51)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value 0.25 (0.88) 0.15 0.27 0.02
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE--END OF PERIOD $ 10.03 $ 9.78 $ 10.66 $ 10.51 $ 10.24
=========== =========== =========== =========== ===========
Total Return (excluding sales charges) 8.18% (3.21%) 7.09% 7.72% 5.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 204,337 $ 226,270 $ 263,662 $ 256,486 $ 264,642
Ratio of expenses to average net assets 0.70% 0.71% 0.85% 0.96% 0.96%
Ratio of net investment income to average net assets 5.35% 4.93% 4.73% 4.85% 4.98%
Ratio of expenses to average net assets* 0.70% 0.71% 0.93% 1.11% 1.11%
Portfolio turnover rate (d) 7.08% 42.26% 28.88% 39.49% 24.15%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
(a) SHARES FIRST OFFERED TO PUBLIC ON MAY 11, 1998. UPON A TRUST REORGANIZATION
ON MAY 11, 1998, THE EXISTING SHARES OF THE FUND WERE RENAMED CLASS D.
(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.
43 NATIONWIDE
<PAGE> 48
FINANCIAL HIGHLIGHTS - NATIONWIDE LONG-TERM U.S. GOVT. BOND FUND
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998(a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.88 $ 11.77 $ 11.24
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.59 0.59 0.28
Net realized and unrealized gain (loss) 0.27 (0.90) 0.53
--------- --------- ---------
Total investment activities 0.86 (0.31) 0.81
--------- --------- ---------
DISTRIBUTIONS
Net investment income (0.59) (0.58) (0.28)
Net realized gains (0.16) -- --
--------- --------- ---------
Total distributions (0.75) (0.58) (0.28)
--------- --------- ---------
Net increase (decrease) in net asset value 0.11 (0.89) 0.53
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 10.99 $ 10.88 $ 11.77
========= ========= =========
Total Return (excluding sales charges) 8.28% (2.63%) 7.32%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 3,767 $ 2,041 $ 201
Ratio of expenses to average net assets 1.04% 1.04% 1.04%(c)
Ratio of net investment income to average net assets 5.42% 5.29% 5.09%(c)
Ratio of expenses to average net assets* 1.08% 1.14% 1.28%(c)
Portfolio turnover rate (d) 91.13% 84.33% 51.12%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998(a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.88 $ 11.76 $ 11.24
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.52 0.52 0.25
Net realized and unrealized gain (loss) 0.27 (0.89) 0.52
--------- --------- ---------
Total investment activities 0.79 (0.37) 0.77
--------- --------- ---------
DISTRIBUTIONS
Net investment income (0.52) (0.51) (0.25)
Net realized gains (0.16) -- --
--------- --------- ---------
Total distributions (0.68) (0.51) (0.25)
--------- --------- ---------
Net increase (decrease) in net asset value 0.11 (0.88) 0.52
--------- --------- ---------
NET ASSET VALUE--END OF PERIOD $ 10.99 $ 10.88 $ 11.76
========= ========= =========
Total Return (excluding sales charges) 7.63% (3.15%) 6.90%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 1,724 $ 1,876 $ 352
Ratio of expenses to average net assets 1.64% 1.64% 1.64%(c)
Ratio of net investment income to average net assets 4.85% 4.68% 4.52%(c)
Ratio of expenses to average net assets* 1.69% 1.74% 1.90%(c)
Portfolio turnover rate (d) 91.13% 84.33% 51.12%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 1998(a) 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 10.88 $ 11.77 $ 11.19 $ 10.92 $ 11.07
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.61 0.61 0.63 0.66 0.68
Net realized and unrealized gain (loss) 0.27 (0.89) 0.58 0.27 (0.15)
---------- ---------- ---------- ---------- ----------
Total investment activities 0.88 (0.28) 1.21 0.93 0.53
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS
Net investment income (0.61) (0.61) (0.63) (0.66) (0.68)
Net realized gains (0.16) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.77) (0.61) (0.63) (0.66) (0.68)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 0.11 (0.89) 0.58 0.27 (0.15)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 10.99 $ 10.88 $ 11.77 $ 11.19 $ 10.92
========== ========== ========== ========== ==========
Total Return (excluding sales charges) 8.53% (2.39%) 11.15% 8.84% 5.01%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 26,915 $ 32,117 $ 40,946 $ 48,549 $ 58,737
Ratio of expenses to average net assets 0.79% 0.79% 0.82% 0.85% 0.84%
Ratio of net investment income to average net assets 5.69% 5.33% 5.55% 6.04% 6.26%
Ratio of expenses to average net assets* 0.84% 0.89% 1.28% 1.60% 1.59%
Portfolio turnover rate (d) 91.13% 84.33 51.12% 52.10% 21.04%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
(a) SHARES FIRST OFFERED TO PUBLIC ON MAY 11, 1998. UPON A TRUST REORGANIZATION
ON MAY 11, 1998, THE EXISTING SHARES OF THE FUND WERE RENAMED CLASS D.
(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.
44 NATIONWIDE
<PAGE> 49
[PHOTO]
FINANCIAL HIGHLIGHTS - NATIONWIDE INTERMEDIATE U.S. GOVT. BOND FUND
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.89 $ 10.56 $ 10.24
---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.57 0.51 0.26
Net realized and unrealized gain (loss) 0.13 (0.62) 0.32
---------- ---------- ----------
Total investment activities 0.70 (0.11) 0.58
---------- ---------- ----------
DISTRIBUTIONS
Net investment income (0.57) (0.51) (0.26)
Net realized gains (0.02) (0.05) --
---------- ---------- ----------
Total distributions (0.59) (0.56) (0.26)
---------- ---------- ----------
Net increase (decrease) in net asset value 0.11 (0.67) 0.32
---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 10.00 $ 9.89 $ 10.56
---------- ---------- ----------
Total Return (excluding sales charges) 7.40% (1.05%) 5.69%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 54,796 $ 49,601 $ 332
Ratio of expenses to average net assets 0.99% 0.99% 1.04%(c)
Ratio of net investment income to average net assets 5.84% 5.13% 5.10%(c)
Ratio of expenses to average net assets* 1.05% 1.15% 1.17%(c)
Portfolio turnover rate (d) 107.86% 51.86% 59.52%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
PERIOD FROM
YEAR YEAR MAY 11,
ENDED ENDED 1998 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 (a)
<S> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.89 $ 10.55 $ 10.24
---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.51 0.45 0.23
Net realized and unrealized gain (loss) 0.13 (0.61) 0.31
---------- ---------- ----------
Total investment activities 0.64 (0.16) 0.54
---------- ---------- ----------
DISTRIBUTIONS
Net investment income (0.51) (0.45) (0.23)
Net realized gains (0.02) (0.05) --
---------- ---------- ----------
Total distributions (0.53) (0.50) (0.23)
---------- ---------- ----------
Net increase (decrease) in net asset value 0.11 (0.66) 0.31
---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 10.00 $ 9.89 $ 10.55
---------- ---------- ----------
Total Return (excluding sales charges) 6.72% (1.57%) 5.29%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 1,129 $ 1,148 $ 297
Ratio of expenses to average net assets 1.63% 1.64% 164%(c)
Ratio of net investment income to average net assets 5.19% 4.44% 4.59%(c)
Ratio of expenses to average net assets* 1.63% 1.65% 1.86%(c)
Portfolio turnover rate (d) 107.86% 51.86% 59.52%(b)
</TABLE>
<TABLE>
<CAPTION>
CLASS D SHARES
YEAR ENDED
OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 1998 (a) 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 9.89 $ 10.57 $ 10.31 $ 10.04 $ 10.12
---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES
Net investment income 0.59 0.53 0.56 0.59 0.59
Net realized and unrealized gain (loss) 0.14 (0.63) 0.34 0.27 (0.08)
---------- ---------- ---------- ---------- ----------
Total investment activities 0.73 (0.10) 0.90 0.86 0.51
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS
Net investment income (0.59) (0.53) (0.56) (0.59) (0.58)
In excess of net investment income -- -- -- -- (0.01)
Net realized gains (0.02) (0.05) (0.08) -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.61) (0.58) (0.64) (0.59) (0.59)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 0.12 (0.68) 0.26 0.27 (0.08)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE--END OF PERIOD $ 10.01 $ 9.89 $ 10.57 $ 10.31 $ 10.04
========== ========== ========== ========== ==========
Total Return (excluding sales charges) 7.73% (0.93%) 9.03% 8.86% 5.28%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 55,812 $ 52,260 $ 50,849 $ 41,328 $ 39,497
Ratio of expenses to average net assets 0.78% 0.79% 0.92% 1.07% 1.06%
Ratio of net investment income to average net assets 6.03% 5.24% 5.43% 5.85% 5.86%
Ratio of expenses to average net assets* 0.78% 0.81% 1.03% 1.22% 1.21%
Portfolio turnover rate (d) 107.86% 51.86% 59.52% 26.58% 9.30%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
(a) SHARES FIRST OFFERED TO PUBLIC ON MAY 11, 1998. UPON A TRUST REORGANIZATION
ON MAY 11, 1998, THE EXISTING SHARES OF THE FUND WERE RENAMED CLASS D.
(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.
45 NATIONWIDE
<PAGE> 50
FINANCIAL HIGHLIGHTS - NATIONWIDE MONEY MARKET
--------------------------------------------------------------------------------
SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
<TABLE>
<CAPTION>
SERVICE CLASS SHARES
PERIOD FROM
YEAR JANUARY 4,
ENDED 1999 TO
OCTOBER 31, OCTOBER 31,
2000 1999 (a)
<S> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 1.00 $ 1.00
----------- -----------
INVESTMENT ACTIVITIES
Net investment income 0.06 0.04
----------- -----------
Total investment activities 0.06 0.04
----------- -----------
DISTRIBUTIONS
Net investment income (0.06) (0.04)
----------- -----------
Total distributions (0.06) (0.04)
----------- -----------
NET ASSET VALUE--END OF PERIOD $ 1.00 $ 1.00
=========== ===========
Total Return 5.64% 3.69%(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 256,221 $ 22,295
Ratio of expenses to average net assets 0.75% 0.64%(c)
Ratio of net investment income to average net assets 5.68% 4.74%(c)
Ratio of expenses to average net assets* 0.86% 0.79%(c)
</TABLE>
<TABLE>
<CAPTION>
PRIME SHARES
YEAR ENDED
OCTOBER 31,
2000
<S> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 1.00
-------------
INVESTMENT ACTIVITIES
Net investment income 0.06
-------------
Total investment activities 0.06
-------------
DISTRIBUTIONS
Net investment income (0.06)
-------------
Total distributions (0.06)
-------------
NET ASSET VALUE--END OF PERIOD $ 1.00
=============
Total Return 5.74%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 1,241,194
Ratio of expenses to average net assets 0.65%
Ratio of net investment income to average net assets 5.58%
Ratio of expenses to average net assets* 0.65%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1999 (d) 1998 1997 1996
<S> <C> <C> <C> <C>
NET ASSET VALUE--BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- -------------
INVESTMENT ACTIVITIES
Net investment income 0.05 0.05 0.05 0.05
------------- ------------- ------------- -------------
Total investment activities 0.05 0.05 0.05 0.05
------------- ------------- ------------- -------------
DISTRIBUTIONS
Net investment income (0.05) (0.05) (0.05) (0.05)
------------- ------------- ------------- -------------
Total distributions (0.05) (0.05) (0.05) (0.05)
------------- ------------- ------------- -------------
NET ASSET VALUE--END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= =============
Total Return 4.61% 5.15% 5.07% 5.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, at end of period (000) $ 1,345,342 $ 1,048,689 $ 820,657 $ 729,500
Ratio of expenses to average net assets 0.61% 0.59% 0.59% 0.60%
Ratio of net investment income to average net assets 4.52% 4.96% 4.96% 4.93%
Ratio of expenses to average net assets* 0.61% 0.64% 0.64% 0.65%
</TABLE>
* RATIOS CALCULATED AS IF NO EXPENSES WERE WAIVED AND/OR REIMBURSED.
(a) SHARES FIRST OFFERED TO PUBLIC ON JANUARY 4, 1999.
(b) NOT ANNUALIZED.
(c) ANNUALIZED.
(d) AS OF JANUARY 4, 1999, THE EXISTING SHARES OF THE FUND WERE RENAMED PRIME
SHARES.
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
46 NATIONWIDE
<PAGE> 51
[PHOTO]
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 currently offers shares in thirty-three separate
series, or mutual funds, each with its own investment objectives and strategies.
This report contains the financial statements and financial highlights of the
eight Funds listed below (individually the "Fund," collectively the "Funds").
- Gartmore Millennium Growth Fund (Millennium Growth)*
- Nationwide Growth Fund (Growth)
- Nationwide Fund (Fund)
(together referred to as the "Stock Funds")
- Nationwide Bond Fund (Bond)
- Nationwide Tax-Free Income Fund (Tax-Free Income)
- Nationwide Long-Term U.S. Government Bond Fund
(Long-Term U.S. Govt. Bond)
- Nationwide Intermediate U.S. Government Bond Fund (Intermediate U.S. Govt.
Bond)
(together referred to as the "Bond Funds")
- Nationwide Money Market Fund (Money Market)
* formerly known as Nationwide Mid Cap Growth Fund.
The Stock and Bond Funds currently offer Class A, Class B, and Class D shares.
Class A and B shares are available to all investors. The Class D shares are
available to a limited group of investors, generally those who were shareholders
of the predecessor funds at the time of the reorganization on May 11, 1998. The
Class A and Class D shares of the Stock Funds are purchased with a maximum 5.75%
and 4.50% front-end sales load, respectively. The Class A and Class D shares of
the Bond Funds are purchased with a maximum 4.50% front-end sales load. The
Class B shares are subject to 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.
Money Market currently offers Prime and Service Class (formerly known as Class
R) shares. The Prime Shares of the Fund are available to all investors. The
Service Class is available to a limited group of investors, such as insurance
company separate accounts and tax-exempt employee benefit plans. Neither class
has any sales charges. The Service Class commenced operations on January 4,
1999, and the existing shares of Money Market were renamed Prime Shares.
The Class A shares pay distribution and/or service (12b-1) fees under a
Distribution Plan of 0.25%. The Class B shares of the Stock Funds and Bond Funds
pay 1.00% and 0.85%, respectively, of 12b-1 fees. Money Market Service Class
shares pay 0.15% of 12b-1 fees. These fees are either retained or paid by NAS to
brokers for distribution and shareholders services.
The Class A and Class D of the Stock and Bond Funds and the Prime and Service
Classes of Money Market 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 applicable shares.
2. SIGNIFICANT ACCOUNTING POLICIES:
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.
(a) SECURITIES VALUATION
(1) Millennium Growth, Growth, Fund, Bond, Tax-Free Income, Long-Term U.S.
Govt. Bond, and Intermediate U.S. Govt. Bond Funds:
Securities traded on a national securities exchange are valued at the
last quoted sale price as provided by an independent pricing agent.
Securities traded in the over-the-counter (OTC) market are valued at the
last quoted sale price, or if there is no sale price, the last quoted
bid price as provided by an independent pricing agent.
U.S Government securities are valued at the last quoted bid price as
provided by an independent pricing agent. All other debt securities are
valued by a combination of daily quotes and matrix evaluations as
provided by an independent pricing agent.
(2) Money Market:
Securities are valued at amortized cost, which approximates market value,
in accordance with Rule 2a-7 of the Investment Company Act of 1940, as
amended.
In accordance with these procedures, the amortized cost valuations are
regularly compared to market quotations provided by an independent
pricing agent or principal market maker. The extent of deviations, if
any, of the current net asset value per share calculated using available
market quotations from the amortized cost per share, will be determined
at such intervals as the Trustees deem appropriate. If the deviation from
amortized cost per share exceeds 1/2 of 1%, the Trustees will consider
appropriate action, which might include a revaluation of all, or an
appropriate portion of the Funds assets based on current market factors.
(3) All Funds:
Each Fund may enter into repurchase agreements with member banks of the
Federal Deposit Insurance Corporation and with registered brokers/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
47 NATIONWIDE
<PAGE> 52
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
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, the Fund has the right to use the collateral to offset losses
incurred. There is potential for loss to the 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.
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.
The Trustees have approved amortized cost procedures for short-term money
market obligations that have 60 days or less to maturity which are
purchased by a non-money market fund.
(b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME
Securities transactions are recorded on the date the security is purchased or
sold (trade date). Dividend income is recognized on the ex-dividend date. Gains
and losses realized from sales of securities are determined by comparing the
identified cost of the Security lot sold with the net sales proceeds. Interest
income is recognized on an accrual basis and may include, where applicable, the
pro rata amortization/accertion of premium or discount.
(c) FEDERAL INCOME TAXES
Each Funds policy is to qualify or continue 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 Bond, Tax-Free Income,
Long-Term U.S. Government Bond, Intermediate U.S. Government Bond, and Money
Market Funds had net capital loss carry forwards of, $12,174,372, $1,292,729,
$474,842, $1,213,546, $9,601, 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.
(d) DISTRIBUTION TO SHAREHOLDERS
(1) Millennium Growth, Growth, and Fund:
Net Investment Income, if any, is declared and paid quarterly and is
recorded on the ex-dividend date.
(2) Bond, Tax-Free Income, Long-Term U.S. Govt. Bond, Intermediate U.S.
Govt. Bond, and Money Market:
Net Investment Income is declared and recorded daily and paid monthly.
(3) All Funds:
Distributable net realized capital gains, if any, are declared and
distributed at least annually.
(4) 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.
As of the fiscal year ended October 31, 2000, undistributed net investment
income, undistributed net realized gains and capital paid in excess of par value
have been adjusted. Negative amounts represent credits and positive amounts
represent debits. The adjustments are as follows:
<TABLE>
<CAPTION>
CAPITAL PAID IN UNDISTRIBUTED UNDISTRIBUTED
EXCESS OF NET INVESTMENT CAPITAL
FUND PAR VALUE INCOME GAIN
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth $ -- $ 213,236 $ (213,236)
Growth (3,066,664) 3,089,677 (23,013)
Fund -- (451) 451
Bond -- 754 (754)
Tax-Free Income -- (6,369) 6,369
Long-Term U.S.
Govt. Bond -- (2,012) 2,012
Intermediate U.S.
Govt. Bond -- (1,811) 1,811
</TABLE>
(e) EXPENSES
General expenses of the Trust, not directly attributable to a Fund or to any
class of shares, are charged to all Funds based upon each Fund's relative
average net assets or some other appropriate basis, as approved by the Trust's
Board of Trustees. Once these expenses are allocated to a Fund, they are
allocated to the classes based on total settled shares outstanding of each
class, for Bond and Money Market, and total shares outstanding of each class for
Stock Funds.
Direct expenses of a Fund are applied to that Fund and 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 and administrative
servicing fees are borne by the specific class of shares to which they apply.
48 NATIONWIDE
<PAGE> 53
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
(f) CAPITAL SHARE TRANSACTIONS
Transactions in capital shares of the Funds were as follows:
<TABLE>
<CAPTION>
MILLENNIUM GROWTH GROWTH
--------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CAPITAL TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 36,273,657 $ 1,208,278 $ 5,100,238 $ 5,959,912
Distributions reinvested 98,510 5,130 1,124,619 58,125
Cost of shares redeemed (13,064,138) (327,179) (2,840,621) (1,715,316)
------------- ------------- ------------- -------------
Change in capital $ 23,308,029 $ 886,229 $ 3,384,236 $ 4,302,721
============= ============= ============= =============
CLASS B SHARES:
Proceeds from shares issued $ 7,008,014 $ 697,347 $ 4,062,771 $ 4,835,276
Distributions reinvested 69,637 4,303 865,147 35,528
Cost of shares redeemed (669,233) (75,089) (1,401,938) (549,605)
------------- ------------- ------------- -------------
Change in capital $ 6,408,418 $ 626,561 $ 3,525,980 $ 4,321,199
============= ============= ============= =============
CLASS D SHARES:
Proceeds from shares issued $ 26,162,684 $ 1,585,850 $ 55,115,734 $ 112,264,841
Distributions reinvested 680,095 118,206 130,933,455 19,012,513
Cost of shares redeemed (4,886,284) (1,920,802) (179,201,791) (164,412,748)
------------- ------------- ------------- -------------
Change in capital $ 21,956,495 $ (216,746) $ 6,847,398 $ (33,135,394)
============= ============= ============= =============
<CAPTION>
----------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SHARE TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
----------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 1,146,202 62,120 303,393 332,934
Reinvested 5,223 291 66,964 3,652
Redeemed (426,371) (16,540) (171,605) (96,101)
------------- ------------- ------------- -------------
Change in shares 725,054 45,871 198,752 240,485
============= ============= ============= =============
CLASS B SHARES:
Issued 243,324 36,519 249,378 271,942
Reinvested 3,752 245 52,082 2,251
Redeemed (24,920) (3,838) (86,389) (30,518)
------------- ------------- ------------- -------------
Change in shares 222,156 32,926 215,071 243,675
============= ============= ============= =============
CLASS D SHARES:
Issued 911,315 80,891 3,325,097 6,440,118
Reinvested 36,115 6,712 7,793,298 1,191,011
Redeemed (192,924) (99,114) (10,819,539) (9,425,421)
------------- ------------- ------------- -------------
Change in shares 754,506 (11,511) 298,856 (1,794,292)
============= ============= ============= =============
</TABLE>
49 NATIONWIDE
<PAGE> 54
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
FUND BOND
-------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CAPITAL TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 18,881,763 $ 41,367,193 $ 1,691,503 $ 2,757,274
Distributions reinvested 3,876,821 506,123 179,043 133,426
Cost of shares redeemed (19,209,375) (9,499,936) (1,466,779) (872,890)
------------- ------------- ------------- -------------
Change in capital $ 3,549,209 $ 32,373,380 $ 403,767 $ 2,017,810
============= ============= ============= =============
CLASS B SHARES:
Proceeds from shares issued $ 12,960,932 $ 33,425,626 $ 547,000 $ 1,522,212
Distributions reinvested 2,901,009 259,935 88,496 64,331
Cost of shares redeemed (10,863,990) (3,489,957) (529,058) (315,102)
------------- ------------- ------------- -------------
Change in capital $ 4,997,951 $ 30,195,604 $ 106,438 $ 1,271,441
============= ============= ============= =============
CLASS D SHARES:
Proceeds from shares issued $ 111,234,024 $ 348,376,075 $ 13,279,160 $ 27,406,883
Distributions reinvested 159,061,396 51,361,279 6,024,531 6,612,729
Cost of shares redeemed (480,715,543) (302,247,342) (31,981,807) (34,025,965)
------------- ------------- ------------- -------------
Change in capital $(210,420,123) $ 97,490,012 $ (12,678,116) $ (6,353)
============= ============= ============= =============
-------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SHARE TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
-------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 617,883 1,282,068 189,488 290,848
Reinvested 131,337 16,287 20,214 14,327
Redeemed (635,871) (292,316) (165,439) (94,109)
------------- ------------- ------------- -------------
Change in shares 113,349 1,006,039 44,263 211,066
============= ============= ============= =============
CLASS B SHARES:
Issued 429,428 1,039,876 61,635 159,806
Reinvested 99,301 8,445 9,956 6,912
Redeemed (363,616) (108,903) (59,557) (33,885)
------------- ------------- ------------- -------------
Change in shares 165,113 939,418 12,034 132,833
============= ============= ============= =============
CLASS D SHARES:
Issued 3,663,054 10,884,336 1,493,691 2,875,713
Reinvested 5,412,729 1,652,268 678,938 704,599
Redeemed (16,052,999) (9,359,878) (3,599,361) (3,591,494)
------------- ------------- ------------- -------------
Change in shares (6,977,216) 3,176,726 (1,426,732) (11,182)
============= ============= ============= =============
</TABLE>
50 NATIONWIDE
<PAGE> 55
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
TAX-FREE INCOME LONG-TERM U.S. GOVT. BOND
-------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CAPITAL TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Proceeds from shares issued $ 1,869,374 $ 2,259,772 $ 2,547,603 $ 2,383,010
Distributions reinvested 75,381 42,319 167,792 54,419
Cost of shares redeemed (590,234) (359,948) (1,048,858) (509,694)
------------ ------------ ------------ ------------
Change in capital $ 1,354,521 $ 1,942,143 $ 1,666,537 $ 1,927,735
============ ============ ============ ============
CLASS B SHARES:
Proceeds from shares issued $ 1,333,025 $ 3,170,437 $ 369,324 $ 1,806,997
Distributions reinvested 119,301 93,504 93,381 51,218
Cost of shares redeemed (1,237,163) (710,390) (628,142) (239,829)
------------ ------------ ------------ ------------
Change in capital $ 215,163 $ 2,553,551 $ (165,437) $ 1,618,386
============ ============ ============ ============
CLASS D SHARES:
Proceeds from shares issued $ 7,684,349 $ 12,209,548 $ 561,021 $ 2,852,827
Distributions reinvested 7,321,507 9,529,591 1,257,075 1,116,872
Cost of shares redeemed (42,002,022) (38,410,675) (7,208,462) (9,775,714)
------------ ------------ ------------ ------------
Change in capital $(26,996,166) $(16,671,536) $ (5,390,366) $ (5,806,015)
============ ============ ============ ============
---------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SHARE TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
---------------------------------------------------------------------------------------------------------
CLASS A SHARES:
Issued 186,980 217,949 237,834 211,133
Reinvested 7,642 4,141 15,635 4,914
Redeemed (60,274) (35,114) (98,207) (45,519)
------------ ------------ ------------ ------------
Change in shares 134,348 186,976 155,262 170,528
============ ============ ============ ============
CLASS B SHARES:
Issued 135,836 303,984 34,216 159,735
Reinvested 12,139 9,084 8,743 4,626
Redeemed (126,094) (68,657) (58,531) (21,791)
------------ ------------ ------------ ------------
Change in shares 21,881 244,411 (15,572) 142,570
============ ============ ============ ============
CLASS D SHARES:
Issued 783,033 1,171,056 52,078 249,512
Reinvested 745,747 919,229 117,694 99,457
Redeemed (4,280,848) (3,701,925) (673,350) (875,642)
------------ ------------ ------------ ------------
Change in shares (2,752,068) (1,611,640) (503,578) (526,673)
============ ============ ============ ============
</TABLE>
51 NATIONWIDE
<PAGE> 56
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
CAPITAL SHARE TRANSACTIONS (CONTINUED)
INTERMEDIATE U.S. GOVT. BOND
------------------------------------
YEAR ENDED YEAR ENDED
CAPITAL TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999
--------------------------------------------------------------------------------
CLASS A SHARES:
Proceeds from shares issued $ 24,991,229 $ 57,314,409
Distributions reinvested 2,935,536 478,395
Cost of shares redeemed (23,416,090) (8,379,780)
------------ ------------
Change in capital $ 4,510,675 $ 49,413,024
============ ============
CLASS B SHARES:
Proceeds from shares issued $ 171,643 $ 962,615
Distributions reinvested 43,895 28,887
Cost of shares redeemed (249,613) (94,251)
------------ ------------
Change in capital $ (34,075) $ 897,251
============ ============
CLASS D SHARES:
Proceeds from shares issued $ 15,948,995 $ 27,360,328
Distributions reinvested 2,467,838 2,493,163
Cost of shares redeemed (15,482,220) (24,992,264)
------------ ------------
Change in capital $ 2,934,613 $ 4,861,227
============ ============
--------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
SHARE TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999
--------------------------------------------------------------------------------
CLASS A SHARES:
Issued 2,547,180 5,785,682
Reinvested 299,553 48,259
Redeemed (2,385,094) (848,159)
------------ ------------
Change in shares 461,639 4,985,782
============ ============
CLASS B SHARES:
Issued 17,480 94,595
Reinvested 4,481 2,866
Redeemed (25,253) (9,464)
------------ ------------
Change in shares (3,292) 87,997
============ ============
CLASS D SHARES:
Issued 1,621,080 2,652,093
Reinvested 251,754 245,086
Redeemed (1,578,612) (2,424,788)
------------ ------------
Change in shares 294,222 472,391
============ ============
52 NATIONWIDE
<PAGE> 57
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
CAPITAL SHARE TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
MONEY MARKET
---------------------------------------------
YEAR ENDED YEAR ENDED
CAPITAL TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 (a)
----------------------------------------------------------------------------------
<S> <C> <C>
PRIME CLASS SHARES:
Proceeds from shares issued $ 1,783,930,379 $ 1,424,550,062
Distributions reinvested 62,743,395 51,257,113
Cost of shares redeemed (1,950,813,723) (1,179,153,929)
--------------- ---------------
Change in capital $ (104,139,949) $ 296,653,246
=============== ===============
----------------------------------------------------------------------------------
PERIOD FROM
YEAR ENDED JANUARY 4, 1999
OCTOBER 31, 2000 TO OCTOBER 31, 1999 (a)
----------------------------------------------------------------------------------
SERVICE CLASS SHARES:
Proceeds from shares issued $ 948,910,914 $ 33,525,592
Distributions reinvested 7,183,343 182,819
Cost of shares redeemed (722,166,861) (11,413,801)
--------------- ---------------
Change in capital $ 233,927,396 $ 22,294,610
=============== ===============
----------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
SHARE TRANSACTIONS: OCTOBER 31, 2000 OCTOBER 31, 1999 (a)
----------------------------------------------------------------------------------
PRIME CLASS SHARES:
Issued 1,783,932,280 1,424,571,246
Reinvested 62,741,387 51,257,113
Redeemed (1,950,813,817) (1,179,153,929)
--------------- ---------------
Change in shares (104,140,150) 296,674,430
=============== ===============
----------------------------------------------------------------------------------
PERIOD FROM
YEAR ENDED JANUARY 4, 1999
OCTOBER 31, 2000 TO OCTOBER 31, 1999 (a)
----------------------------------------------------------------------------------
SERVICE CLASS SHARES:
Issued 948,910,914 33,525,592
Reinvested 7,183,361 182,819
Redeemed (722,166,861) (11,413,801)
--------------- ---------------
Change in shares 233,927,414 22,294,610
=============== ===============
</TABLE>
(a) ON JANUARY 4, 1999, THE SERVICE CLASS (FORMALLY KNOWN AS CLASS R SHARES)
WERE FIRST OFFERED TO THE PUBLIC AND THE EXISTING SHARES OF MONEY MARKET
WERE RENAMED PRIME SHARES.
53 NATIONWIDE
<PAGE> 58
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
3. TRANSACTION WITH AFFILIATES
Under the terms of the Investment Advisory Agreement, Villanova Mutual Fund
Capital Trust ("VMF") manages the investment of the assets and supervises the
daily business affairs of the Funds. VMF also manages the Fund's investments and
has the responsibility for making all investment decisions for the Funds. Under
the terms of the investment advisory agreement, each Fund pays VMF a management
fee, based on the Fund's average daily net assets.
Additional information regarding investment advisory fees incurred is as follows
for the year ended October 31, 2000:
<TABLE>
<CAPTION>
ADVISORY ADVISORY FEE
FEES PAID SCHEDULE
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth $ 220,429 Up to $250 million 1.03%
On the next $750 million 1.00%
On the next $1 billion 0.97%
On the next $3 billion 0.94%
On $5 billion and more 0.91%
-----------------------------------------------------------------------------------------
Growth 5,734,593 Up to $250 million 0.60%
Fund 12,807,691 On the next $750 million 0.575%
On the next $1 billion 0.55%
On the next $3 billion 0.525%
On $5 billion and more 0.50%
-----------------------------------------------------------------------------------------
Bond 600,602 Up to $250 million 0.50%
Tax-Free Income 1,093,502 On the next $750 million 0.475%
Long-Term U.S. Govt. Bond 167,881 On the next $1 billion 0.45%
Intermediate U.S. Govt. Bond 530,376 On the next $3 billion 0.425%
On $5 billion and more 0.40%
-----------------------------------------------------------------------------------------
Money Market 5,651,029 Up to $1 billion 0.40%
On the next $1 billion 0.38%
On the next $3 billion 0.36%
On $5 billion and more 0.34%
</TABLE>
VMF has entered into an Expense Limitation Agreement with the Trust on behalf of
the Funds. Pursuant to the Expense Limitation Agreement, VMF has agreed to waive
fees or otherwise reimburse expenses (except for Rule 12b-1 and Administrative
Service Fees) of certain Funds in order to limit annual Fund operating expenses
at or below stated expense caps. The following table illustrates the expense
caps for each class of shares of the Funds for the year ended October 31, 2000:
<TABLE>
<CAPTION>
EXPENSE CAPS
------------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS D SHARES
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth* 1.63% 2.23% 1.30%
Long-Term U.S. Govt. Bond 1.04% 1.64% 0.79%
Intermediate U.S. Govt. Bond .99% 1.64% 0.79%
</TABLE>
SERVICE CLASS SHARES
--------------------------------------------------------------------------------
Money Market 0.75%**
* Formerly known as Nationwide Mid Cap Growth Fund. Prior to September 1, 2000,
the expense caps were 1.25% for Class A, 2.00% for Class B, and 1.00% for
Class D shares, respectively.
** Voluntary expense cap.
54 NATIONWIDE
<PAGE> 59
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
During the period ended October 31, 2000, VMF reduced expenses for the following
Funds as follows:
<TABLE>
<CAPTION>
TOTAL FEES
TOTAL FUND FEES FEES WAIVED/ NET FUND
EXPENSES WAIVED* REIMBURSED REIMBURSED EXPENSES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Millennium Growth $ 426,871 $ 59,130 $ - $ 59,130 $ 367,741
Long-Term U.S. Govt. Bond 304,922 17,544 - 17,544 287,378
Intermediate U.S. Govt. Bond 982,035 32,080 - 32,080 949,955
Money Market 9,689,119 157,709 - 157,709 9,531,410
</TABLE>
* includes advisory, transfer agent, and fund administration fees.
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 shares of the Funds. These fees, based on average daily net
assets of the respective classes, are not to exceed an annual rate of 0.25% for
Class A, 1.00% and 0.85% for the Class B shares of the Stock and Bond Funds
(respectively), and 0.15% for the Service Class of Money Market. Additional
information regarding distribution fees incurred or payable to NAS is as follows
for the year ended October 31, 2000:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES SERVICE CLASS SHARES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth $ 16,261 $ 28,144 $ -
Growth 23,468 79,338 -
Fund 140,774 465,406 -
Bond 8,280 14,717 -
Tax-Free Income 6,309 33,603 -
Long-Term U.S. Govt. Bond 7,206 15,141 -
Intermediate U.S. Govt. Bond 132,682 9,570 -
Money Market - - 166,277*
</TABLE>
* The gross distribution fees per the Service Class Shares of Money Market for
the year ended October 31, 2000, which includes waivers of $59,614.
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 each Fund's
average daily net assets and paid monthly. Additional information regarding fund
administration fees incurred or payable to VSA is as follows for the year ended
October 31, 2000:
<TABLE>
<CAPTION>
FUND ADMINISTRATION FUND ADMINISTRATION
FEES FEE SCHEDULE
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth $ 20,136
Growth 541,769
Fund 1,063,967 Up to $250 million 0.07%
Bond 84,085 On the next $750 million 0.05%
Tax-Free Income 153,092 On $1 billion and more 0.04%
Long-Term U.S. Govt. Bond 23,504
Intermediate U.S. Govt. Bond 74,254
Money Market 723,852
</TABLE>
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 an annual rate of $16 per Stock Fund account (effective October
1, 2000, fees were increased to $20 per account), $18 per Bond Fund account
(effective October 1, 2000, fees were increased to $20 per account), $27 per
Money Market Prime Share account (effective October 1, 2000, fees were increased
to $30 per account) and 0.01% of the average daily net assets of Money Market
Service Class shares. For the year ended October 31, 2000, Money Market had
Transfer Agent fees of $15,058 and $752,731, for Service Class and Prime Shares,
respectively.
VSA has entered into agreements with BISYS Fund Services Ohio, Inc., to provide
sub-administration and sub-transfer agent services to the Funds.
Under the terms of an Administrative Services Plan, the Funds pay fees to
servicing organizations, such as broker-dealers and financial institutions, and
may include Nationwide Financial Services, Inc., which agree to provide
administrative support services. 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 inquiries 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 D shares of the Stock and
Bond Funds and Prime and Service Class shares of Money Market.
55 NATIONWIDE
<PAGE> 60
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS D SHARES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth $ 532 $ - $ -
Growth 253 - 461,792
Fund 1,833 - 1,218,015
Bond 294 - 50,027
Tax-Free Income - - -
Long-Term U.S. Govt. Bond 1 - -
Intermediate U.S. Govt. Bond 77,642 - 30,735
Service Class Shares Prime Class Shares
---------------------------------------------------------------------------------------------------------------------------
Money Market $366,211 $1,276,362
</TABLE>
Affiliate NFS received payments (which are included in the total administrative
fees) as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS D SHARES
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth $ 2 $ - $ -
Growth 232 - 379,629
Fund 1,569 - 966,559
Bond 222 - 41,483
Tax-Free Income - - -
Long-Term U.S. Govt. Bond 2 - -
Intermediate U.S. Govt. Bond 76,457 - 23,877
SERVICE CLASS SHARES PRIME CLASS SHARES
---------------------------------------------------------------------------------------------------------------------------
Money Market $306,622 $1,057,188
</TABLE>
Pursuant to a Distributor Agreement, NAS serves as principal underwriter of the
Funds in the continuous distribution of their Class A and Class D shares and
receives commissions in the form of a front-end sales charge. Such fees are
deducted from and are not included in proceeds from sales of Class A and D
shares of the Stock and Bond Funds. From such fees, NAS pays sales commissions,
salaries, and other expenses in connection with generating new sales of shares
of the Fund. For the year ended October 31, 2000, the commissions were collected
as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS D SHARES
------------------------------------------------------------------------------------------
<S> <C> <C>
Millennium Growth $183,419 $ 31,154
Growth 155,676 349,727
Fund 565,212 580,267
Bond 35,605 28,082
Tax-Free Income 24,564 77,753
Long-Term U.S. Govt. Bond 13,115 1,883
Intermediate U.S. Govt. Bond 8,256 7,900
</TABLE>
NAS also receives fees for services as principal underwriter for Class B shares
of the Funds. Such fees are contingent deferred sales charges (CDSCs) ranging
from 1% to 5% imposed on redemptions of Class B shares, which may cause the
current value of an account to fall below the total purchase payments made
during the past five years. The CDSCs, if applicable, will be imposed or
redemptions made within 6 years of the purchase. CDSCs collected on for the year
ended October 31, 2000, on redemptions of Class B Shares were as follows:
CLASS B SHARES
--------------------------------------------------------------------------------
Millennium Growth $ 29,934
Growth 107,445
Fund 445,655
Bond 19,420
Tax-Free Income 54,421
Long-Term U.S. Govt. Bond 13,837
Intermediate U.S. Govt. Bond 7,510
56 NATIONWIDE
<PAGE> 61
[PHOTO]
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
4. BANK LOANS
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 .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) as
follows:
<TABLE>
<CAPTION>
AVERAGE BORROWINGS AVERAGE INTEREST
OUTSTANDING RATE
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Millennium Growth 240,470 6.90%
Growth 355,780 6.33%
Fund 107,990 6.70%
Bond 8,774 6.47%
Tax-Free Income 296,188 6.56%
Intermediate U.S. Govt. Bond 2,170 7.12%
Money Market 24,765 5.97%
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding U.S. Government and short-term
securities) and purchases and sales of U.S. Government securities for the year
ended October 31, 2000, are summarized as follows:
<TABLE>
<CAPTION>
NON U.S. GOVERNMENT U.S. GOVERNMENT
SECURITIES SECURITIES
-------------------------------------------------------------------
PURCHASES SALES PURCHASES SALES
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Millennium Growth $ 139,555,311 $ 92,327,478 $ - $ -
Growth 1,564,958,836 1,728,402,468 - -
Fund 1,973,857,582 2,421,118,131 - -
Bond 49,420,368 62,316,863 32,870,991 29,960,995
Tax-Free Income 15,309,879 42,489,924 - -
Long-Term U.S. Govt. Bond - - 28,477,153 34,848,734
Intermediate U.S. Govt. Bond - - 116,873,835 105,387,047
Money Market - - - -
</TABLE>
Realized gains and losses have been computed on the first-in, first-out basis
unless otherwise specified by VMF. 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
$493,403, $2,004,092, $14,643,042, $0, $65,158, $0, $0, and $0 for the
Millennium Growth, Growth, Fund, Bond, Tax-Free Income, Intermediate U.S. Govt.
Bond, and Money Market, 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/
APPRECIATION (DEPRECIATION) (DEPRECIATION)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millennium Growth $ 6,344,915 $ (5,568,903) $ 776,012
Growth 170,987,714 (55,382,767) 115,604,947
Fund 529,171,848 (129,829,419) 399,342,429
Bond 1,077,571 (4,595,831) (3,518,260)
Tax-Free Income 7,020,169 (3,891,563) 3,128,606
Long-Term U.S. Govt. Bond 797,297 (52,260) 745,037
Intermediate U.S. Govt. Bond 1,827,112 (620,613) 1,206,499
Money Market - - -
</TABLE>
6. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For corporate shareholders, 1.42% of Millennium Growth, 100% of Growth, and 100%
of Fund income dividends and short-term capital gain distributions in the fiscal
year ended October 31, 2000, qualify for the dividend received deductions for
certain corporate shareholders.
$10,994,187 of the distributions paid by Tax-Free Income during the fiscal year
ended October 31, 2000, are exempt from federal income tax.
57 NATIONWIDE
<PAGE> 62
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
OCTOBER 31, 2000
During the year ended October 31, 2000, the following Funds declared long term
capital distributions of:
<TABLE>
<CAPTION>
LONG TERM
CAPITAL DISTRIBUTIONS
<S> <C>
Millennium Growth $ 853,510
Growth 131,888,156
Fund 144,015,729
Long-Term U.S. Govt. Bond 530,772
Intermediate U.S. Govt. Bond 233,150
</TABLE>
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 the 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 reorganization of Nationwide Long-Term U.S. Government Bond
Fund into the Nationwide Intermediate U.S. Government Bond Fund subject
to shareholder approval of the reorganization. If shareholders approve
the transaction, substantially all of the assets and liabilities of the
Nationwide Long-Term U.S. Government Bond Fund will be acquired by the
Nationwide Intermediate U.S. Government Bond Fund in exchange for shares
of the same class of the Nationwide Intermediate U.S. Government Bond
Fund. It is anticipated that a shareholder meeting to address this issue
will be held in February 2001.
(c) Approved the addition of Class C shares for each of the Funds except
Long-Term U.S. Government Bond and the Money Market Funds. These shares
will be available for sale no earlier than March 1, 2001.
End of notes to financial statements.
58 NATIONWIDE
<PAGE> 63
[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 Millennium Growth Fund (formerly known as
Nationwide Mid Cap Growth Fund), Nationwide Growth Fund, Nationwide Fund,
Nationwide Bond Fund, Nationwide Tax-Free Income Fund, Nationwide Long-Term U.S.
Government Bond Fund, Nationwide Intermediate U.S. Government Bond Fund and
Nationwide Money Market Fund (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
59 NATIONWIDE
<PAGE> 64
SHAREHOLDER MEETING
--------------------------------------------------------------------------------
(UNAUDITED)
At the Annual Meeting of Shareholders of Nationwide Mutual Funds held on July
26, 2000, shareholders 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 ENDED 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.)
60 NATIONWIDE
<PAGE> 65
[PHOTO]
SHAREHOLDER MEETING CONTINUED
--------------------------------------------------------------------------------
(UNAUDITED)
PROPOSAL 2 (CONTINUED)
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
--------------------------------------------------------------------------------------------------------------------------
<S> <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>
PROPOSAL 3
Amend Funds' Fundamental Investment Policy
REGARDING MAKING LOANS
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund* 375,987 16,820 63,043 455,850
Growth Fund 28,551,512 1,778,609 1,940,020 32,270,141
Nationwide Fund 40,102,390 1,478,582 2,396,312 43,977,284
Bond Fund 6,787,801 160,879 471,689 7,420,369
Tax-Free Income Fund 10,547,461 372,299 871,994 11,791,754
Long-Term U.S. Government Bond Fund 1,377,063 119,741 123,595 1,620,399
Intermediate U.S. Government Bond Fund 8,441,240 137,245 191,818 8,770,303
Money Market Fund 956,063,318 65,224,840 72,121,589 1,093,409,747
S&P 500 Index Fund 13,983,014 542,458 862,505 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 106,006 174 785 106,965
High Yield Bond Fund 10,485,743 - - 10,485,743
Prestige Large Cap Value Fund 2,791,352 16,766 3,695 2,811,813
Prestige Large Cap Growth Fund 2,821,082 36,111 39,594 2,896,787
Prestige Small Cap Fund 1,922,478 13,740 27,976 1,964,194
Prestige Balanced Fund 715,642 13,503 27,363 756,508
Prestige International Fund 1,343,753 1,065 5,608 1,350,426
Small Cap Index Fund 2,453 - - 2,453
International Index Fund 12,679 202 998 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
</TABLE>
(*EFFECTIVE SEPTEMBER 1, 2000, KNOWN AS GARTMORE MILLENIUM GROWTH FUND.)
61 NATIONWIDE
<PAGE> 66
SHAREHOLDER MEETING CONTINUED
--------------------------------------------------------------------------------
(UNAUDITED)
PROPOSAL 3 (CONTINUED)
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
</TABLE>
PROPOSAL 4
Amend Funds' Fundamental Investment Policy
REGARDING COMMODITIES AND COMMODITIES CONTRACTS
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund* 379,182 13,861 62,806 455,849
Growth Fund 28,542,344 1,638,635 2,089,162 32,270,141
Nationwide Fund 39,289,285 1,644,234 3,043,764 43,977,283
Bond Fund 6,170,904 164,483 1,084,982 7,420,369
Tax-Free Income Fund 10,479,514 478,638 833,603 11,791,755
Long-Term U.S. Government Bond Fund 1,386,972 112,592 120,835 1,620,399
Intermediate U.S. Government Bond Fund 8,429,834 152,219 188,251 8,770,304
Money Market Fund 973,840,489 42,036,083 77,533,175 1,093,409,747
S&P 500 Index Fund 13,876,132 630,302 881,543 15,387,977
Morley Capital Accumulation Fund 1,058,429 - - 1,058,429
Morley Enhanced Income Fund 1,104,326 5,212 - 1,109,538
Value Opportunities Fund 106,006 174 785 106,965
High Yield Bond Fund 10,485,743 - - 10,485,743
Prestige Large Cap Value Fund 2,791,299 11,263 9,252 2,811,814
Prestige Large Cap Growth Fund 2,839,384 16,564 40,839 2,896,787
Prestige Small Cap Fund 1,926,237 8,290 29,667 1,964,194
Prestige Balanced Fund 716,342 12,803 27,363 756,508
Prestige International Fund 1,344,781 37 5,608 1,350,426
Small Cap Index Fund 2,453 - - 2,453
International Index Fund 12,679 202 998 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
</TABLE>
(*EFFECTIVE SEPTEMBER 1, 2000, KNOWN AS GARTMORE MILLENIUM GROWTH FUND.)
62 NATIONWIDE
<PAGE> 67
[PHOTO]
SHAREHOLDER MEETING CONTINUED
--------------------------------------------------------------------------------
(UNAUDITED)
PROPOSAL 5
Amend Funds' Fundamental Investment Policy
REGARDING REAL ESTATE
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund* 380,287 12,717 62,845 455,849
Growth Fund 28,534,399 1,651,147 2,084,595 32,270,141
Nationwide Fund 39,562,995 1,444,212 2,970,076 43,977,283
Bond Fund 6,233,322 173,419 1,013,629 7,420,370
Tax-Free Income Fund 10,610,987 350,374 830,394 11,791,755
Long-Term U.S. Government Bond Fund 1,369,150 126,804 124,445 1,620,399
Intermediate U.S. Government Bond Fund 8,438,559 129,112 202,632 8,770,303
Money Market Fund 977,242,954 40,976,067 75,190,726 1,093,409,747
S&P 500 Index Fund 14,138,102 468,887 780,987 15,387,976
Morley Capital Accumulation Fund 1,058,429 - - 1,058,429
Morley Enhanced Income Fund 1,109,538 - - 1,109,538
Value Opportunities Fund 106,006 174 785 106,965
High Yield Bond Fund 10,480,015 5,728 - 10,485,743
Small Cap Index Fund 2,453 - - 2,453
International Index Fund 12,679 202 998 13,879
Bond Index Fund 4,777 - - 4,777
Mid Cap Market Index Fund 501,087 - - 501,087
</TABLE>
PROPOSAL 6
Amend Funds' Fundamental Investment Policy
REGARDING BORROWING MONEY AND ISSUING SENIOR SECURITIES
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prestige Cap Value Fund 2,791,303 11,026 9,485 2,811,814
Prestige Large Cap Growth Fund 2,838,704 17,429 40,654 2,896,787
Prestige Small Cap Fund 1,919,026 15,571 29,597 1,964,194
Prestige Balanced Fund 717,518 11,627 27,363 756,508
Prestige International Fund 1,344,123 695 5,608 1,350,426
</TABLE>
PROPOSAL 7
Amend Funds' Fundamental Investment Policy
REGARDING DIVERSIFICATION
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Morley Enhanced Income Fund 1,109,538 - - 1,109,538
Value Opportunities Fund 106,006 174 785 106,965
High Yield Bond Fund 10,485,743 - - 10,485,743
</TABLE>
(*EFFECTIVE SEPTEMBER 1, 2000, KNOWN AS GARTMORE MILLENIUM GROWTH FUND.)
63 NATIONWIDE
<PAGE> 68
SHAREHOLDER MEETING CONTINUED
--------------------------------------------------------------------------------
(UNAUDITED)
PROPOSAL 8
Approve Funds' reclassification of the fundamental investment objective
as non-fundamental of each of the
Mid Cap Growth Fund*, Growth Fund, Nationwide Fund, Bond Fund, Tax-Free Income
Fund,
Long-Term U.S. Government Bond Fund, Intermediate U.S. Government Bond Fund,
Money Market Fund,
S&P 500 Index Fund, Prestige Large Cap Value Fund, Prestige Large Cap Growth
Fund, Prestige Small Cap Fund,
Prestige Balanced Fund and Prestige International Fund
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund* 375,208 16,521 64,120 455,849
Growth Fund 27,637,384 2,424,296 2,208,460 32,270,140
Nationwide Fund 38,085,833 3,429,687 2,461,763 43,977,283
Bond Fund 6,034,347 888,242 497,781 7,420,370
Tax-Free Income Fund 10,488,603 441,120 862,031 11,791,754
Long-Term U.S. Government Bond Fund 1,374,652 120,684 125,062 1,620,398
Intermediate U.S. Government Bond Fund 8,385,365 163,980 220,958 8,770,303
Money Market Fund 932,517,780 89,174,748 71,717,219 1,093,409,747
S&P 500 Index Fund 13,571,262 907,180 909,535 15,387,977
Prestige Large Cap Value Fund 2,790,327 17,180 4,307 2,811,814
Prestige Large Cap Growth Fund 2,803,493 51,507 41,788 2,896,788
Prestige Small Cap Fund 1,885,497 32,726 45,971 1,964,194
Prestige Balanced Fund 715,399 13,566 27,543 756,508
Prestige International Fund 1,345,421 123 4,883 1,350,427
</TABLE>
PROPOSAL 9
Approve Funds' Amend Investment Advisory Agreement between the Trust,
on behalf of the Mid Cap Growth Fund*, and Villanova Mutual Fund Capital Trust
to increase the investment advisory fees for such Fund
<TABLE>
<CAPTION>
SERIES FOR AGAINST ABSTAIN TOTAL
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund* 365,981 26,963 62,905 455,849
</TABLE>
(*EFFECTIVE SEPTEMBER 1, 2000, KNOWN AS GARTMORE MILLENIUM GROWTH FUND.)
64 NATIONWIDE
<PAGE> 69
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 Henningar
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.
ABOUT PERFORMANCE +
The performance of the funds, as reflected on pages 2-25, includes performance
of their respective predecessor funds prior to reorganization. In addition, the
performance of the class A and B shares prior to such date has been restated for
sales charges but not for fees applicable to class A and B. The reorganization
of the funds took place on May 11, 1998.
The predecessor to the Millennium Growth Fund was the Financial Horizons
Investment Trust Growth Fund. The predecessor to the Long-Term U.S. Government
Bond Fund was the Financial Horizons Investment Trust Government Bond Fund. The
Nationwide Investing Foundation III funds were preceded by funds of the
Nationwide Investing Foundation or Nationwide Investing Foundation II.
Inception-to-date class-specific total returns can be found in the Financial
Highlights, which start on page 39.
[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> 70
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
Nationwide(R)Family of Funds - offered by Villanova Capital through Nationwide
Advisory Services
[ICON] 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-402-12/00
