<PAGE> 1
NATIONWIDE(R) VLI
Separate Account
Semi-Annual Report
June 30, 1995
-------------------------------------------------------------------------------
INVESTMENT/LIFE(R)
[LOGO] AMERICAN CAPITAL/
NATIONWIDE LIFE INSURANCE COMPANY
<PAGE> 2
[LOGO](R)
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, CLOLUMBUS, OHIO 43216
[PHOTO]
PRESIDENT'S MESSAGE
We are pleased to present the 1995 semi-annual report of the Nationwide VLI
Separate Account.
The first half of 1995 proved rewarding for both stock and bond fund investors.
During this period, stock funds as a group scored a gain of almost 17 percent
while bond funds were ahead by over 9 percent, as measured by Lipper Analytical
Services, Inc.
The economy slowed during the second quarter in deference to the Federal
Reserve's goal of a "soft landing". In early July the Fed trimmed the federal
funds rate 25 basis points, the first easing by the Fed in almost three years.
This move provided additional fuel to the markets in the current quarter.
Continued low inflation, favorable corporate earnings and slow but sustainable
economic growth should support further advances in the equity and fixed income
markets for the remainder of the year and into 1996.
We extend our thanks that you have selected our investment products to help you
meet your financial planning and retirement needs.
/s/ Peter F. Frenzer
---------------------------
Peter F. Frenzer, President
2
<PAGE> 3
<TABLE>
NATIONWIDE VLI SEPARATE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
June 30, 1995
(UNAUDITED)
<S> <C>
ASSETS:
Investments in American Capital Life
Investment Trust, at market value:
Common Stock Portfolio
1,693,851 shares (cost $21,595,102) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,950,425
Domestic Strategic Income Portfolio
437,920 shares (cost $3,682,573) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,652,256
Government Portfolio
6,544,814 shares (cost $57,428,116) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,659,813
Money Market Portfolio
10,485,589 shares (cost $10,485,589) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,485,589
Multiple Strategy Portfolio
2,030,516 shares (cost $22,552,702) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,817,952
------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,566,035
ACCOUNTS PAYABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,502
------------
CONTRACT OWNERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,564,533
============
</TABLE>
<TABLE>
Contract owners' equity represented by:
<CAPTION>
UNITS UNIT VALUE
--------- ----------
<S> <C> <C> <C>
Single Premium contracts issued prior to
April 16, 1990:
Common Stock Sub-account . . . . . . . . . . . . . . . . . . . . 1,249,163 $19.850695 $ 24,796,754
Domestic Strategic Income Sub-account . . . . . . . . . . . . . 215,203 16.205804 3,487,538
Government Sub-account . . . . . . . . . . . . . . . . . . . . . 3,215,553 17.918883 57,619,118
Money Market Sub-account . . . . . . . . . . . . . . . . . . . . 666,016 15.360795 10,230,535
Multiple Strategy Sub-account . . . . . . . . . . . . . . . . . 1,220,861 19.349604 23,623,177
Single Premium contracts issued on or after
April 16, 1990:
Common Stock Sub-account . . . . . . . . . . . . . . . . . . . . 2,183 18.787854 41,014
Domestic Strategic Income Sub-account . . . . . . . . . . . . . 10,227 16.106263 164,719
Government Sub-account . . . . . . . . . . . . . . . . . . . . . 2,865 13.658975 39,133
Money Market Sub-account . . . . . . . . . . . . . . . . . . . . 22,329 11.420791 255,015
Multiple Strategy Sub-account . . . . . . . . . . . . . . . . . 5,207 16.715561 87,038
Multiple Payment Contracts and Flexible
Premium Contracts:
Common Stock Sub-account . . . . . . . . . . . . . . . . . . . . 7,049 15.990364 112,716
Multiple Strategy Sub-account . . . . . . . . . . . . . . . . . 7,211 14.946097 107,776
========= ========== ------------
$120,564,533
============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
<TABLE>
NATIONWIDE VLI SEPARATE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1995, 1994 AND 1993
(UNAUDITED)
<CAPTION>
1995 1994 1993
------------ ----------- -----------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends (note 1c) . . . . . . . . . . . $ 2,563,040 2,186,385 2,571,271
------------ ----------- -----------
Gain (loss) on investments:
Proceeds from redemptions of mutual
fund shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,514,858 11,989,278 10,876,822
Cost of mutual fund shares sold . . . . . . . . . . . . . . . . . . (10,795,244) (11,179,858) (10,073,116)
------------ ----------- -----------
Realized gain on investments . . . . . . . . . . . . . . . . . . . . 719,614 809,420 803,706
Change in unrealized gain (loss) on investments . . . . . . . . . . 10,877,942 (8,792,835) 2,919,368
------------ ----------- -----------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . 11,597,556 (7,983,415) 3,723,074
------------ ----------- -----------
Net investment activity . . . . . . . . . . . . . . . . . . . . 14,160,596 (5,797,030) 6,294,345
------------ ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments from contract owners . . . . . . . . . . . . . . . . 36,002 (9,977) 18,893
Surrenders (note 2d) . . . . . . . . . . . . . . . . . . . . . . . . . (4,224,999) (4,392,431) (4,248,727)
Death benefits (note 4) . . . . . . . . . . . . . . . . . . . . . . . (550,901) (506,740) (262,504)
Policy loans (net of repayments) (note 5) . . . . . . . . . . . . . . (216,017) 498,627 166,033
------------ ----------- -----------
Net equity transactions . . . . . . . . . . . . . . . . . . . . (4,955,915) (4,410,521) (4,326,305)
------------ ----------- -----------
EXPENSES:
Deductions for surrender charges (note 2d) . . . . . . . . . . . . . . (130,691) (189,974) (201,932)
Redemptions to pay cost of insurance charges
and administrative charges (notes 2b and 2c) . . . . . . . . . . . . (947,288) (1,014,792) (1,028,760)
Deductions for asset charges (note 3) . . . . . . . . . . . . . . . . (554,381) (588,315) (640,544)
------------ ----------- -----------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . (1,632,360) (1,793,081) (1,871,236)
------------ ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY . . . . . . . . . . . . . . . . . 7,572,321 (12,000,632) 96,804
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD . . . . . . . . . . . . . . 112,992,212 129,959,471 134,750,998
------------ ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD . . . . . . . . . . . . . . . . . $120,564,533 117,958,839 134,847,802
============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
NATIONWIDE VLI SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995, 1994 AND 1993
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) ORGANIZATION
The Nationwide VLI Separate Account ("Separate Account") was
established pursuant to a resolution of the Board of Directors of
Nationwide Life Insurance Company (the Company) on August 8, 1984. The
Separate Account has been registered as a unit investment trust under
the Investment Company Act of 1940 and consists of five sub-accounts.
Assets of each sub-account are invested at net asset value in shares
of corresponding mutual fund portfolios offered by American Capital
Life Investment Trust. The funds consist of Common Stock, Domestic
Strategic Income (formerly Corporate Bond), Government, Money Market
and Multiple Strategy Portfolios. At June 30, 1995, contract owners
have invested in all of the above funds.
(b) THE CONTRACTS
Prior to December 31, 1990, only single premium life insurance
contracts without a front-end sales charge, but with a contingent
deferred sales charge and certain other fees, were offered for
purchase. Beginning December 31, 1990, multiple payment life insurance
contracts and flexible premium life insurance contracts with a
front-end sales charge, a contingent deferred sales charge and certain
other fees, are offered for purchase. See note 2 for a discussion of
policy charges.
The contract owners' equity is affected by the investment results of
each fund and certain policy charges (see note 2). The accompanying
financial statements include only contract owners' purchase payments
pertaining to the variable portions of their contracts and exclude any
purchase payments for fixed dollar benefits, the latter being included
in the accounts of the Company.
(c) SECURITY VALUATION, TRANSACTIONS AND RELATED INVESTMENT INCOME
The market value of investments is based on the closing net asset
value per share at June 30, 1995. Fund purchases and sales are
accounted for on the trade date (date the order to buy or sell is
executed). The cost of investments sold is determined on a specific
identification basis, and dividends (which include capital gain
distributions) are accrued as of the ex-dividend date.
(d) FEDERAL INCOME TAXES
Operations of the Account form a part of, and are taxed with,
operations of the Company, which is taxed as a life insurance company
under the provisions of the Internal Revenue Code.
The Company does not provide for income taxes within the Account.
Taxes are the responsibility of the contract owner upon termination or
withdrawal.
5
<PAGE> 6
2. POLICY CHARGES
(a) DEDUCTIONS FROM PREMIUMS
On multiple payment contracts and flexible premium contracts, the
Company deducts a charge for state premium taxes equal to 2.5% of all
premiums received to cover the payment of these premium taxes. The
Company also deducts a sales load from each premium payment received
not to exceed 3.5% of each premium payment. The Company may at its
sole discretion reduce this sales loading.
(b) COST OF INSURANCE
A cost of insurance charge is assessed monthly against each contract
by liquidating units. The amount of the charge is based upon age, sex,
rate class and net amount at risk (death benefit less total contract
value).
(c) ADMINISTRATIVE CHARGES
For single premium contracts, the Company deducts an annual
administrative charge which is determined as follows:
Contracts issued prior to April 16, 1990:
Purchase payments totalling less than $25,000 - $10/month
Purchase payments totalling $25,000 or more - none
Contracts issued on or after April 16, 1990:
Purchase payments totalling less than $25,000 - $90/year
($65/year in New York)
Purchase payments totalling $25,000 or more - $50/year
For multiple payment contracts the Company currently deducts a monthly
administrative charge of $5 (may deduct up to $7.50, maximum) to
recover policy maintenance, accounting, record keeping and other
administrative expenses.
For flexible premium contracts, the Company currently deducts a
monthly administrative charge of $25 during the first policy year and
$5 per month thereafter (may deduct up to $7.50, maximum) to recover
policy maintenance, accounting, record keeping and other
administrative expenses. Additionally, the Company deducts an increase
charge of $2.04 per year per $1,000 applied to any increase in the
specified amount during the first 12 months after the increase becomes
effective.
The above charges are assessed against each contract by liquidating
units.
(d) SURRENDERS
Policy surrenders result in a redemption of the contract value from
the Separate Account and payment of the surrender proceeds to the
contract owner or designee. The surrender proceeds consist of the
contract value, less any outstanding policy loans, and less a
surrender charge, if applicable. The charge is determined according to
contract type.
For single premium contracts, the charge is determined based upon a
specified percentage of the original purchase payment. For single
premium contracts issued prior to April 16, 1990, the charge is 8% in
the first year and declines to 0% after the ninth year. For single
premium contracts issued on or after April 16, 1990, the charge is
8.5% in the first year and declines to 0% after the ninth year.
For multiple payment contracts and flexible premium contracts, the
amount charged is based upon a specified percentage of the initial
surrender charge, which varies by issue age, sex and rate class. The
charge is 100% of the initial surrender charge in the first year, with
certain exceptions, declining to 0% after the ninth year.
The Company may waive the surrender charge for certain contracts in
which the sales expenses normally associated with the distribution of
a contract are not incurred.
6
<PAGE> 7
3. ASSET CHARGES
For single premium contracts, the Company deducts a charge from the
contract to cover mortality and expense risk charges related to
operations, and to recover policy maintenance and premium tax charges.
For contracts issued prior to April 16, 1990, the charge is equal to
an annual rate of .95% during the first ten policy years, and .50%
thereafter. A reduction of charges on these contracts is possible in
policy years six through ten for those contracts achieving certain
investment performance criteria; for contracts issued on or after
April 16, 1990, the charge is equal to an annual rate of 1.30% during
the first ten policy years, and 1.00% thereafter.
For multiple payment contracts and flexible premium contracts,
the Company deducts a charge equal to an annual rate of .80%, with
certain exceptions, to cover mortality and expense risk charges
related to operations.
The above charges are assessed through the daily unit value
calculation.
4. DEATH BENEFITS
Death benefits result in a redemption of the contract value from the
Separate Account and payment of the death benefit proceeds, less any
outstanding policy loans and policy charges, to the legal bene-
ficiary. The excess of the death benefit proceeds over the contract
value on the date of death is paid by the Company's general account.
5. POLICY LOANS (NET OF REPAYMENTS)
Contract provisions allow contract owners to borrow up to 90% (50%
during first year of single premium contracts) of a policy's cash
surrender value. For single premium contracts issued prior to April
16, 1990, 6.5% interest is due and payable annually in advance. For
single premium contracts issued on or after April 16, 1990, multiple
payment contracts and flexible premium contracts, 6% interest is due
and payable in advance on the policy anniversary when there is a loan
outstanding on the policy.
At the time the loan is granted, the amount of the loan is transferred
from the Account to the Company's general account as collateral for
the outstanding loan. Collateral amounts in the general account are
credited with the stated rate of interest in effect at the time the
loan is made, subject to a guaranteed minimum rate. Loan repayments
result in a transfer of collateral, including interest, back to the
Account.
6. SCHEDULE I
Schedule I presents the components of the change in unit values, which
are the basis for determining contract owners' equity. This schedule
is presented for each sub-account in the following format:
o Beginning unit value - Jan. 1
o Reinvested dividends and capital gains
(This amount reflects the increase in the unit value due to
dividend and capital gain distributions from the underlying
mutual funds.)
o Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the
fund.)
o Asset charges
(This amount reflects the decrease in the unit value due to the
charges discussed in note 3.)
o Ending unit value - June 30
o Percentage increase (decrease) in unit value.
7
<PAGE> 8
SCHEDULE I
<TABLE>
NATIONWIDE VLI SEPARATE ACCOUNT
SINGLE PREMIUM CONTRACTS ISSUED PRIOR TO APRIL 16, 1990
SCHEDULES OF CHANGES IN UNIT VALUES
Six Month Periods Ended June 30, 1995, 1994 and 1993
(UNAUDITED)
<CAPTION>
DOMESTIC
COMMON STRATEGIC MONEY MULTIPLE
STOCK INCOME GOVERNMENT MARKET STRATEGY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1995
Beginning unit value - Jan. 1 $16.580891 14.336077 16.344365 15.022875 16.538427
-------------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .213614 .014594 .599737 .409862 .020645
-------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 3.142738 1.927432 1.057329 .000000 2.875506
-------------------------------------------------------------------------------------------------------------
Asset charges (.086548) (.072299) (.082548) (.071942) (.084974)
-------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $19.850695 16.205804 17.918883 15.360795 19.349604
-------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 20% 13% 10% 2% 17%
=============================================================================================================
1994
Beginning unit value - Jan. 1 $17.325425 15.127964 17.301801 14.623465 17.329774
-------------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .091941 .013193 .509829 .219527 .014652
-------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.852556) (.738543) (1.434446) .000000 (.922111)
-------------------------------------------------------------------------------------------------------------
Asset charges (.081125) (.069730) (.079139) (.069202) (.080311)
-------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $16.483685 14.332884 16.298045 14.773790 16.342004
-------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (5)% (5)% (6)% 1% (6)%
=============================================================================================================
1993
Beginning unit value - Jan. 1 $16.049449 13.129409 16.194306 14.379569 16.243698
-------------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .016902 .024560 .542859 .191709 .112162
-------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .417072 1.458672 .447833 .000000 .585410
-------------------------------------------------------------------------------------------------------------
Asset charges (.076642) (.065259) (.079447) (.068038) (.078056)
-------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $16.406781 14.547382 17.105551 14.503240 16.863214
-------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 2% 11% 6% 1% 4%
=============================================================================================================
<FN>
*This is not an annualized rate of return as it is the change for a six month
period and asset charges do not include the policy charges discussed in note 2.
</TABLE>
8
<PAGE> 9
SCHEDULE I, CONTINUED
NATIONWIDE VLI SEPARATE ACCOUNT
SINGLE PREMIUM CONTRACTS ISSUED ON OR AFTER APRIL 16, 1990
SCHEDULES OF CHANGES IN UNIT VALUES
SIX MONTH PERIODS ENDED JUNE 30, 1995, 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
DOMESTIC
COMMON STRATEGIC MONEY MULTIPLE
STOCK INCOME GOVERNMENT MARKET STRATEGY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1995
Beginning unit value - Jan. 1 $15.720497 14.272889 12.480782 11.189053 14.311997
---------------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .202353 .014517 .457611 .304993 .017850
---------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 2.977195 1.917274 .806920 .000000 2.486251
---------------------------------------------------------------------------------------------------------------
Asset charges (.112191) (.098417) (.086338) (.073255) (.100537)
---------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $18.787854 16.106263 13.658975 11.420791 16.715561
---------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 20% 13% 9% 2% 17%
===============================================================================================================
1994
Beginning unit value - Jan. 1 $16.483852 15.113958 13.258615 10.929642 15.049256
---------------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .087399 .013169 .390373 .163929 .012713
---------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.809937) (.737106) (1.098410) .000000 (.799774)
---------------------------------------------------------------------------------------------------------------
Asset charges (.105531) (.095256) (.083060) (.070716) (.095352)
---------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $15.655783 14.294765 12.467518 11.022855 14.166843
---------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (5)% (5)% (6)% 1% (6)%
===============================================================================================================
1993
Beginning unit value - Jan. 1 $15.324267 13.163967 12.453930 10.785653 14.156355
---------------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .016124 .024603 .417207 .143044 .097661
---------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .397055 1.460447 .344172 .000000 .508934
---------------------------------------------------------------------------------------------------------------
Asset charges (.100054) (.089448) (.083672) (.069772) (.093001)
---------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $15.637392 14.559569 13.131637 10.858925 14.669949
---------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 2% 11% 5% 1% 4%
===============================================================================================================
</TABLE>
*This is not an annualized rate of return as it is the change for a six month
period and asset charges do not include the policy charges discussed in note 2.
9
<PAGE> 10
Schedule I, continued
NATIONWIDE VLI SEPARATE ACCOUNT
MULTIPLE PAYMENT CONTRACTS AND FLEXIBLE PREMIUM CONTRACTS
SCHEDULES OF CHANGES IN UNIT VALUES
SIX MONTH PERIODS ENDED JUNE 30, 1995, 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON MULTIPLE
STOCK STRATEGY
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C>
1995**
Beginning unit value - Jan. 1 $13.346462 12.765144
------------------------------------------------------------------------
Reinvested dividends and capital gains .172008 .015941
------------------------------------------------------------------------
Unrealized gain (loss) 2.530583 2.220264
------------------------------------------------------------------------
Asset charges (.058689) (.055252)
------------------------------------------------------------------------
Ending unit value - June 30 $15.990364 14.946097
------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 20% 17%
========================================================================
1994**
Beginning unit value - Jan. 1 $13.924920 13.355954
------------------------------------------------------------------------
Reinvested dividends and capital gains .073923 .011296
------------------------------------------------------------------------
Unrealized gain (loss) (.685661) (.711045)
------------------------------------------------------------------------
Asset charges (.054928) (.052144)
------------------------------------------------------------------------
Ending unit value - June 30 $13.258254 12.604061
------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (5)% (6)%
========================================================================
1993**
Beginning unit value - Jan. 1 $12.880252 12.500360
------------------------------------------------------------------------
Reinvested dividends and capital gains .013569 .086346
------------------------------------------------------------------------
Unrealized gain (loss) .334609 .450461
------------------------------------------------------------------------
Asset charges (.051816) (.050607)
------------------------------------------------------------------------
Ending unit value - June 30 $13.176614 12.986560
------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 2% 4%
========================================================================
</TABLE>
*This is not an annualized rate of return as it is the change for a
six month period and asset charges do not include the policy charges
discussed in note 2.
**No other investment options were utilized.
Nationwide(R) is a registered federal service mark
of Nationwide Mutual Insurance Company
10
<PAGE> 11
<TABLE>
<S> <C>
NATIONWIDE LIFE INSURANCE COMPANY __________________
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 | |
| Bulk Rate |
| U.S. Postage |
| P A I D |
| Columbus, Ohio |
| Permit No. 521 |
|________________|
</TABLE>
