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[NATIONWIDE(R) LOGO]
NATIONWIDE(R)
VARIABLE
ACCOUNT-5
Semi-Annual Report
to
Contract Owners
June 30, 1995
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
APO-2750-B (6/95)
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Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
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[NATIONWIDE(R) LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43216
[FIGURE 1]
PRESIDENT'S MESSAGE
We are pleased to present the 1995 semi-annual report of the Nationwide
Variable Account-5.
The first half of 1995 proved rewarding for both stock and bond fund investors.
During this perid, 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
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Contents
<TABLE>
<S> <C>
HOW TO READ THE SEMI-ANNUAL REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Explanation on how to read and understand
the various financial reports
A FEW WORDS ABOUT OUR FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fund Objectives and Narratives
written by the fund managers*
FUND PERFORMANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
STATEMENTS OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . 16
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SCHEDULES OF CHANGES IN UNIT VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
<FN>
* The discussions refer to a stock market index. The Standard & Poor's 500 Index (S&P 500) is an unmanaged index
of 500 U.S. common stocks and the historical performance assumes the reinvestment of dividends.
The performance figures quoted by the fund managers may not include the annual mortality, expense and administration
charges of the annuity contract.
</TABLE>
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HOW TO READ THE SEMI-ANNUAL REPORT
This Semi-Annual Report is sent to all customers who own a Nationwide annuity
with all or some of the funds in the Nationwide Variable Account-5 (the
Account). The Account is a separate account trust which invests in eight mutual
funds from five mutual fund houses. An explanation of the funds and their
objectives can be found on pages 8 through 13.
The Semi-Annual Report has three major financial sections.
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
This statement, found on page 16, lists all the funds in the Account, the
number of shares owned, the amount paid for the shares (i.e., cost) and their
market value on June 30, 1995. The funds are presented in alphabetical order by
investment company. The market value of the assets change as the underlying
mutual fund shares change in value. As contract owners make exchanges between
the funds, the number of shares in each fund increases and decreases. When
money is deposited by contract owners, shares of the mutual funds are bought by
the Account. The total market value of the funds is equal to the Total
investments.
Accounts receivable, if applicable, is an asset of the Account for money market
fund shares added to the contract owners' accounts, but not yet added to Total
investments. Total investments plus Accounts receivable equals Total assets.
Accounts payable, if applicable, is a liability of the Account for money market
fund shares deducted from the contract owners' accounts, but not yet deducted
from Total investments.
Total assets minus Accounts payable equals Contract owners' equity. For a
summary of Contract owners' equity by fund series turn to page 17.
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
These statements, found on page 18, show the activity in the Account from
January 1 to June 30, 1995 and 1994.
The Investment activity section shows the changes in unrealized gain or loss of
the mutual funds in the Account, realized gain or loss as shares of the funds
are bought and sold, and dividends and capital gains earnings from the
underlying mutual funds.
The Equity transactions section illustrates the purchase payments received by
the Account as new contracts are sold, existing contract owners deposit
additional funds, contracts are canceled and annuity benefits are paid.
Expenses are the charges associated with the contract. Note 2 on page 20
outlines these charges.
Net change in contract owners' equity equals Investment activity plus Equity
transactions minus Expenses.
The Contract owners' equity at the beginning of the period plus the Net change
in contract owners' equity equals the Contract owners' equity at the end of the
period. Contract owners' equity at the end of the calendar year will equal the
Contract owners' equity at the beginning of the next year.
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SCHEDULES OF CHANGES IN UNIT VALUE
As a contract owner, you invest in the mutual funds offered in your annuity
contract. However, you do not buy shares of the mutual fund. Instead, the
Account buys shares of the fund and you in turn purchase units of the Account.
Except for the units surrendered for the annual contract maintenance charge,
the number of units you own will not change unless you contribute to or
withdraw money from your account. The value of your contract can change based
on the value of the units you own. For example, if you purchase 100 units at
$10 per unit, the value of your contract is $1,000. If the value of the units
increases to $12 per unit, your contract value increases to $1,200. Therefore,
to determine the value of your account, multiply the number of units of each
fund you own by the fund's unit value.
The Schedules of Changes in Unit Value show you the unit value at the beginning
of the period and at the end of the period. The percentage increase (decrease)
in unit value shows how it changed in value. This is computed by subtracting
the beginning unit value from the ending unit value and dividing the difference
by the beginning unit value. This can be used as a measure of the performance
of the funds over the semi-annual periods reported.
As you review the following pages of the Semi-Annual Report, the Notes to
Financial Statements on page 19 will also help explain and clarify the various
statements and schedules.
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A FEW WORDS ABOUT OUR FUNDS
[DREYFUS LOGO]
DREYFUS STOCK INDEX FUND++
OBJECTIVE - To provide investment results that correspond to the price and
yield performance of the S&P500.+
NARRATIVE BY DREYFUS CORPORATION
The objective of the Stock Index Fund is to provide investment results that
correspond to the price and yield performance of publicly traded common stocks
in the aggregate, as represented by the Standard & Poor's 500 Composite Price
Index, better known as the S&P 500.
The manager generally selects stocks for the Fund's portfolio in the order of
their weightings in the S&P 500, beginning with the heaviest weighted stocks.
With respect to the Fund's assets invested in the stocks in the S&P 500, the
percentage of such assets invested in each stock is approximately the same as
the percentage it represents in the S&P 500.
The Fund will attempt to achieve a correlation between the performance of its
portfolio and that of the S&P 500 of at least 0.95, without taking into account
expenses. The Fund's ability to correlate its performance with the S&P 500 may
be affected by, among other things, changes in securities markets, the manner
in which the S&P 500 is calculated by Standard & Poor's Corporation, the timing
of purchases and redemptions, the size of the Fund's portfolio, and the size of
cash flow into and out of the Fund. There can be no assurance that the Fund's
investment objective will be achieved and an investment in the Fund involves
risks similar to those of investing in common stocks.
[FIDELITY INVESTMENTS LOGO]
VARIABLE INSURANCE PRODUCTS FUND
EQUITY-INCOME PORTFOLIO
OBJECTIVE - To seek reasonable income by investing primarily in
income-producing equity securities.
AN INTERVIEW WITH BETTINA DOULTON,
PORTFOLIO MANAGER
Q. BETTINA, HOW DID THE FUND PERFORM?
A. Although the fund did well relative to its peers, it slightly trailed the
performance of the Standard & Poor's 500 stock index for the six and 12-month
periods ended June 30, 1995. The index had total returns of 20.21% and 26.07%
for those periods, respectively. Because this recent stock market rally was
quite narrow -- led by a few sectors, namely technology, financials and the
large-cap and blue-chip stocks -- relatively few stock mutual funds have topped
the performance of the index thus far in 1995.
Q. THE STOCK MARKET SHOWED A RENEWED VIGOR OVER THE PAST SIX MONTHS. WHAT
ACCOUNTED FOR THIS?
A. The market's strength was driven by investors' belief that the Federal
Reserve Board would manage the economy to a soft landing -- steady, albeit
slower, economic growth and continued low inflation. If achieved, those
conditions are ideal for Corporate America to sustain strong profit growth.
During the six-month period, corporate earnings reports were excellent, which
provided the fuel for stock prices to move higher. Excluding the consistently
outstanding performance of the technology and financial sectors, the market has
been characterized by rapid industry rotation. Investors have spent the past
six months racing from one industry to the next, trying to stay one step ahead
of the crowd. Sometimes, the fund was in the right place at the right time, and
sometimes it wasn't.
[FN]
----------
+ "Standard & Poor's 500", "S&P 500(TM)" are trademarks of the Standard &
Poor's Corporation and have been licensed for use. The fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's Corporation.
++ Formerly the Dreyfus Life and Annuity Index Fund.
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EQUITY-INCOME PORTFOLIO (CONT'D)
Q. WHAT CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. Several of the fund's largest holdings have driven returns recently.
Highlights include Philip Morris. The stock has been rewarded for the company's
strong profit growth and free cash flow; both are attributable to terrific
results in the company's domestic and international tobacco businesses, which
more than offset mediocre results in its food division. Second in line is the
Federal National Mortgage Association (Fannie Mae). Although its stock price
suffered a significant setback last fall, it has since recovered as conditions
in the secondary mortgage market have turned more favorable. IBM was another
strong performer. The company has done an excellent job cutting costs and
cleaning up its balance sheet. In addition, global economic growth and wide
acceptance of the company's new products have contributed to accelerating
revenue growth. Finally, in the energy sector, energy service companies
Schlumberger and Halliburton performed well. Both benefited from improving
worldwide supply/demand dynamics for oil and corporate restructuring efforts.
Elsewhere in the energy sector, however, British Petroleum (BP) and Amerada
Hess have been somewhat disappointing in terms of stock performance. Both are
restructuring stories; BP's stock may just be taking a breather after making
significant gains, while Amerada Hess' turnaround may be just taking a bit
longer than investors had expected.
Q. YOU MORE THAN DOUBLED THE FUND'S STAKE IN FINANCIAL STOCKS; THEY WENT FROM
7.3% OF THE FUND SIX MONTHS AGO TO 17.9% ON JUNE 30 . . .
A. Recent purchases of bank stocks made up most of that increase. Along with
the diversified financial services companies such as American Express and
Fannie Mae, banks had a strong, if volatile, run. My only regret is not owning
more of them early in the period, when they began to outperform. Prices did
fall in the spring, however, which allowed me to buy stocks such as Chemical
Banking and BankAmerica off their highs. In the coming months, I expect the
market to drive bank stock valuations -- prices relative to earnings -- higher.
That's because earnings are becoming more consistent, the industry is
consolidating, and companies are using excess capital to repurchase shares of
their own stocks.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. When interest rates fall, as they've done over the past few months, the
market usually rewards stocks with higher valuations. However, we have to keep
in mind that the economy has slowed, which could negatively affect corporate
earnings going forward. The 64-thousand-dollar question then becomes: will the
market's willingness to drive up valuations and look toward an economic
resurgence be enough to offset the negative effects of potential short-term
earnings disappointments? I'm afraid not. Companies that report
less-than-expected earnings growth in the coming months will most likely pay
dearly with falling stock prices. In light of this, I plan to focus intensely
on owning companies that trade at attractive valuations, offer good prospects
for higher earnings through 1996, and are working to enhance shareholder value.
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[NATIONWIDE LOGO] NATIONWIDE
FINANCIAL SERVICES, INC.
NATIONWIDE IS ON YOUR SIDE
NATIONWIDE SEPARATE ACCOUNT TRUST
GOVERNMENT BOND FUND
OBJECTIVE - To provide as high a level of income as is consistent with the
preservation of capital.
NARRATIVE BY WAYNE FRISBEE, FUND MANAGER
In our Annual Report six months ago, we discussed the unusual fundamental value
then available in the bond market. During the first half of 1995 that value was
largely realized as bond market investors were rewarded for their patience
after what had been a very difficult prior year. Long-term interest rates
dropped by 125 basis points during this period while rates on intermediate-term
assets dropped by even more. The rates on the five-year U.S. Treasury note, for
instance, fell from 7.83 percent to 5.97 percent.
The rally in the fixed-income markets was largely due to the perception in the
markets that the U.S. Federal Reserve would move away from a policy of
increasing short-term interest rates to slow an economy that had been growing
too fast and would begin to reduce rates to support an economy that was
obviously slowing. Continued reports of subdued inflation has also added
critical support to the market.
The Government Bond Fund reduced market exposure slightly as bond prices rose
while continuing to be invested in sectors of the government, agency, and
mortgage-backed markets perceived to be undervalued. Approximately one-third of
portfolio assets continue to be invested in the Collateralized Mortgage
Obligation (CMO) market. The additional yield on these
conservatively-structured investments continue to make them attractive
portfolio holdings. The portfolio will avoid the risks inherent in the
more-risky "derivative" structures that have received so much negative press
coverage.
MONEY MARKET FUND
OBJECTIVE - To seek as high a level of current income as is considered
consistent with the preservation of capital and liquidity by investing
primarily in money market instruments.
NARRATIVE BY KAREN MADER, FUND MANAGER
On July 6, 1995, the Federal Reserve changed its previous course and lowered
the Federal Funds rate by 25 basis points to 5.75% from 6.00%. In doing so, the
Federal Reserve was expressing concern over a possible slowdown in the economy.
The last time such a cut was done was nearly three years ago in September of
1992. The Fed Funds rate is used to price money market instruments. As a result
yields on money market instruments are also lower. For example, in February
1995, the three month treasury bill had a yield of 6.13%. The current yield is
5.61%.
The Separate Account Money Market Fund continues to invest in only the highest
rated instruments. An internal credit review is completed on every company we
invest in. The Fund's yield remains competitive with the other funds included
in Donoghue's Taxable First Tier Money Market Group.
TOTAL RETURN FUND
OBJECTIVE - To obtain a reasonable long term total return (i.e., earnings
growth plus potential dividend yield) on invested capital from a flexible
combination of current return and capital gains through investments in common
stocks, convertible issues, money market instruments and bonds with a primary
emphasis on common stocks.
NARRATIVE BY JOHN M. SCHAFFNER, FUND MANAGER
Technology stocks have had very strong performance so far this year. Due to
high price volatility, above-average business risk, and generally low dividend
yields, the Total Return Fund's philosophy is to limit investments in this
sector. These limits involve buying only the strongest, best positioned
companies, buying only when the capital gain potential is well in excess of the
risk of loss, and to keep total exposure to a low percentage of Fund assets.
The Fund currently has about a 5% asset weighting in technology, after some
recent sales.
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TOTAL RETURN FUND (CONT'D)
The stocks held by the Fund have increased by such large percentages in the
first half of 1995 that even the relatively modest amount held by the Fund has
significantly helped performance. The Fund has more substantial asset
weightings in the Financial sector (about 12%) and Telecommunications (about
10%), both of which have had generally good performance in the first half.
While some individual issues have had negative results, there does not appear
to be any significant sector weaknesses in the Fund's holdings.
A number of attractive buying opportunities appeared during the first quarter,
and the Fund was able to establish new positions in Columbia/HCA Healthcare,
Magna International and Premark International. The current level of cash
remains at 15%.
The Fund's strategy continues to be one of purchasing companies with clearly
visible business opportunities, at valuation levels that allow for future
improvement. Sales are being made when the fundamental outlook becomes less
clear than is satisfactory, or when valuation levels become uncomfortably high.
[NEUBERGER & BERMAN LOGO]
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
BALANCED PORTFOLIO
OBJECTIVE - The portfolio seeks long-term capital growth and reasonable current
income without undue risk to principal.
NARRATIVE BY MARK GOLDSTEIN, THERESA HAVELL AND DIDI WEINBLATT
The strength exhibited in both fixed income and equity markets have assisted
the AMT Balanced Portfolio to get off to one of its strongest years since
inception. With interest rates coming down 200 basis points, and corporate
earnings on the Standard & Poor's 500 at all time highs, money is streaming
into bonds and stocks. This simultaneous rally has provided strong total
return and new opportunities.
The equity portion of the portfolio was able to capture much of the rally
exhibited by the broad market. Significant performers during the first half of
the year were the Technology, Financial Services and Gaming stocks. Names like
Intel, Citicorp and Promus all played a central role. Further boosts came from
specialty retailing shops as 9West (women's shoes), General Nutrition Centers
(vitamins and diet supplements), and Circuit City (consumer electronics).
In our attempts to add value, we look for companies that have earnings growth
rates in excess of 15%-20% and market valuations that put the price-to-earnings
ratio at or about the market average. With the recent acceleration of earnings
in much of the mid to large capitalization equity market, many new and
appealing opportunities for investment are available.
On the fixed income side, the portfolio has seen steady total returns over the
first six months. With the Federal Reserve Board easing rates and the fixed
income market already pricing in another rate cut, the bond market has done
very well. Though we have benefitted from these general market movements, our
conservative management style has also been able to add value.
During the last few months, the slowing of the economy has allowed corporate
bond spreads to widen, providing opportunity (we added bonds of issuers such as
Xerox, AT&T and Morgan Stanley). Additionally, government agency
mortgage-backed securities continued to look attractive.
Going forward, we believe that the AMT Balanced Portfolio can continue to act
as the cornerstone of almost any asset allocation. With its concentration on
conservatively managed fixed income securities in conjunction with a
disciplined blend of value and growth equity, the fund provides opportunities
and diversification across the capital market spectrum.
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[TWENTIETH CENTURY MUTUAL FUNDS LOGO]
A MEMBER OF THE TWENTIETH CENTURY FAMILY OF MUTUAL FUNDS.
TCI ADVANTAGE
OBJECTIVE - To seek current income and capital growth.
NARRATIVE BY TWENTIETH CENTURY COMPANIES, INC.
After a difficult 1994, TCI Advantage achieved the best return for a single
six-month reporting period in the fund's history. These unusually strong
results for this fund reflect powerful and lucrative rallies in the equity and
fixed-income markets over the period. The fund's benchmark index, a combination
of the S&P 500, the Lehman Brothers Intermediate Government Index, and the
three-month Treasury Bill Index, turned in an even higher return of 12.26%.
TCI Advantage is a blended portfolio. Its approximate 40% stock position is
compiled using Twentieth Century's focus on earnings and revenue growth, and is
designed to provide long-term opportunities for capital growth. Income is
derived from an approximate 40% stake in intermediate-term government bonds.
Finally, share price consistency is aided by a near 20% weighting in
money-market securities. The goal of this mix is to provide income to
conservative investors while still providing the modest, long-term share-price
growth investors need to outpace the rate of inflation. With an annual
inflation rate currently running at about 3%, as measured by the consumer price
index (CPI), TCI Advantage has accomplished this task since its inception. We
believe strongly that the fund's investment approach will help it to meet its
goals over longer periods of time as well.
TCI Advantage's success over the six months ended June 30, 1995, owes to strong
recoveries in the bond and stock markets from 1994's lows. While the fund's
bond and money-market positions performed only moderately compared with more
aggressive, longer-term bonds as interest rates fell over the period, they did
contribute meaningfully to fund performance. In keeping with its investment
approach, TCI Advantage's stock portfolio seeks larger, more established firms
that exhibit accelerating earnings growth. Its investments in computer and
communications related stocks helped it profit from strength in the technology
sector, while holdings in industrial cyclicals prospered in a slow growth
economic environment. This success helped to overcome limited participation in
a broad rally for smaller sized companies, as well as limited exposure to the
types of stocks, such as bank related issues, that take advantage of a falling
interest rate environment.
Moderate economic growth and low interest rates bode well for the markets as
the year heads into its second half. Your fund's management team is currently
investigating opportunities overseas, where falling interest rates could
substantially improve corporate profitability. Prices for many foreign firms
are also fairly low compared with their growth prospects. Yet international
holdings will continue to comprise only a small portion of the fund's
portfolio. The management team will continue to emphasize domestic stocks with
earnings and revenue acceleration, conservative government bonds, and
money-market securities.
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TCI GROWTH
OBJECTIVE - To seek capital growth by investing in common stocks (including
securities convertible into common stocks) that meet certain fundamental and
technical standards of selection and, in the opinion of the fund's management,
have better than average potential for appreciation.
NARRATIVE BY TWENTIETH CENTURY COMPANIES, INC.
Responding to a potent rally in many different equity markets, TCI Growth
posted the second best performance for a six-month reporting period in the
fund's history. These results closely tracked the 20.14% return for the S&P
500, and also outpaced the 17.46% gain for the average growth mutual fund over
the period, as measured by Lipper Analytical Services.
While the fund's ending performance was similar to that of the S&P 500, its
path to success was quite different. The S&P is a collection of 500 of the
largest U.S. companies from a broad variety of industries. TCI Growth, on the
other hand, is designed to single out stocks with earnings and revenue
acceleration. Sometimes, this acceleration can be found in many different
industries. At other times, the most impressive acceleration occurs in specific
areas of the economy. Recently, the management team has found the most
compelling investment choices in a broad range of stocks that come together
under the umbrella heading of technology. TCI Growth is currently more than 50%
invested in this sector. The remarkable growth posted by many of the stocks
that fall under the technology banner presents extraordinary long-term
investment opportunity. When earnings and revenue statements begin to show
deceleration, these stocks immediately become candidates to be sold.
The fund's exposure to technology stocks dictated the course of its performance
over the period. The fund's returns were crimped by a brief decline in the
prices of technology shares in early 1995. Weak economic numbers at that time
led some investors to believe that the growth of technology firms would slow.
The ensuing sell-off hurt fund performance, especially in comparison with a
surging S&P 500. As the year progressed, however, impressive earnings reports
for numerous technology issues sparked an industry-wide rally -- allowing the
fund to nearly catch up with the index in a relatively brief span at the end of
the period.
That sharp increase came despite flat performance for the fund's 10% or 11%
stake in international stocks. The fund is continuing to investigate global
investment opportunities, however, as improving interest-rate environments
should be beneficial for these issues in the future.
TCI Growth's return for the six-month period, while unusually strong, reaffirms
to us the potential of combining growth-oriented stocks with a disciplined
buying and selling process. We strongly believe that this strategy has the
potential to provide significant benefits to those investors investing to
achieve long-term financial goals.
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FUND PERFORMANCES
<TABLE>
<CAPTION>
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TOTAL RETURN: ASSUMING CONTRACT NOT SURRENDERED**(NON-STANDARDIZED)
APPROXIMATE PERCENT CHANGE IN NET ASSETS WITH CAPITAL GAINS AND INCOME DIVIDENDS REINVESTED
------------------------------------------------------------------------------------------------------------------------------------
NON-ANNUALIZED PERCENT CHANGE*** ANNUALIZED PERCENT CHANGE***
INCEPTION 1 YR. TO 5 YR. TO INCEPTION TO 5 YR. TO INCEPTION TO
FUNDS++ DATA*+ 6/30/95 6/30/95+ 6/30/95+ 6/30/95 6/30/95
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DREYFUS CORPORATION
Stock Index Fund 09/29/89 23.72% 61.63% 68.12% 10.08% 9.46%
FIDELITY VIP FUND
Equity-Income Portfolio 10/09/86 22.39% 88.95% 145.78% 13.57% 10.86%
NATIONWIDE SEPARATE ACCOUNT TRUST
Government Bond Fund 11/08/82 11.28% 49.27% 181.24% 8.34% 8.52%
Money Market Fund 11/10/81 3.79% 16.93% 120.29% 3.18% 5.96%
Total Return Fund 11/08/82 16.03% 69.71% 372.05% 11.16% 13.06%
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
Balanced Portfolio 02/28/89 18.83% 45.35% 72.69% 7.77% 9.01%
TCI PORTFOLIOS, INC.
TCI Advantage 08/01/91 11.24% NA* 23.41% NA* 5.52%
TCI Growth 11/20/87 25.40% 53.12% 119.79% 8.89% 10.90%
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<FN>
* Performance information is not available for all or part of the period indicated (See Fund Inception Date).
** SEC and NASD regulations require that any reporting of product performance be accompanied by standardized data and the
disclosures are on the following page. Please review this information and a product prospectus before investing.
*** Percent change in unit value price represents total return after the deduction of a 1.3% annual asset fee.
+ Numbers in this column represent the total percentage change in the unit value for the period indicated. This is not an annual
return figure.
++ Funds are neither insured nor guaranteed by the U.S. Government. For the Money Market Fund, there is no assurance that a
stable $1 fund NAV (used to calculate Unit Value) can be maintained. Figures quoted represent past performance and returns can
fluctuate.
*+ Performance for some funds reflects performance for periods before the fund was actually available in the separate account.
That hypothetical performance is calculated by imposing contract charges on actual fund performance, to determine how the fund
would have performed if it had been available in the separate account.
</TABLE>
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<TABLE>
<CAPTION>
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TOTAL RETURN: ASSUMING CONTRACT SURRENDERED (STANDARDIZED)
APPROXIMATE PERCENT CHANGE IN NET ASSETS WITH CAPITAL GAINS AND INCOME DIVIDENDS REINVESTED
------------------------------------------------------------------------------------------------------------------------------------
INCEPTION 1 YR. TO 5 YR. TO 10 YR. TO INCEPTION TO
FUNDS++ DATE*+ 6/30/95 6/30/95 6/30/95 6/30/95
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DREYFUS CORPORATION
Stock Index Fund 09/29/89 15.32% 7.07% NA* 6.33%
FIDELITY VIP FUND
Equity-Income Portfolio 10/09/86 13.99% 10.71% NA* 8.34%
NATIONWIDE SEPARATE ACCOUNT TRUST
Government Bond Fund 11/08/82 2.88% 5.43% 6.05% 6.25%
Money Market Fund 11/10/81 - 4.61% - 0.14% 1.95% 3.65%
Total Return Fund 11/08/82 7.63% 8.30% 9.36% 11.44%
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
Balanced Portfolio 02/28/89 10.43% 4.68% NA* 6.03%
TCI PORTFOLIOS, INC.
TCI Advantage 08/01/91 2.84% NA* NA* 1.64%
TCI Growth 11/20/87 17.00% 5.75% NA* 8.37%
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<FN>
The above illustration represents past fund performance based on a $1,000 hypothetical investment. The performance figures reflect
the deduction of a 1.3% annual asset fee, a $30 annual administrative charge, and a maximum of a 6.0% contingent deferred sales
charge (after one year, declining thereafter). They also reflect the application of an annual 10% free withdrawal privilege
available after the first year. Investment principal and investment returns are not guaranteed under these variable options.
Account values at the time of redemption may be more or less than the purchase payment, due to market fluctuations and any specific
charges that may apply. This is neither an offer to sell nor a solicitation to buy securities. The results shown are not a
representation of future investment performance. Any comparisons should be made only after a recognition of the differences in the
investment policies and objectives of the funds' investments. This report is authorized for distribution to prospective investors
only when preceded or accompanied by prospectuses containing more complete information, which should be read carefully before
investing or sending money.
* Performance information is not available for all or part of the period indicated (See Fund Inception Date).
++ Funds are neither insured nor guaranteed by the U.S. Government. For the Money Market Fund, there is no assurance that a stable
$1 fund NAV (used to calculate Unit Value) can be maintained. Figures quoted represent past performance and returns can
fluctuate.
*+ Performance for some funds reflects performance for periods before the fund was actually available in the separate account. That
hypothetical performance is calculated by imposing contract charges on actual fund performance, to determine how the fund would
have performed if it had been available in the separate account.
</TABLE>
15
<PAGE> 16
--------------------------------------------------------------------------------
NATIONWIDE VARIABLE ACCOUNT-5
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1995
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments at market value:
Dreyfus Stock Index Fund (DryStkIx)
32,366 shares (cost $427,088)............................................................ $ 496,493
Fidelity VIP -- Equity-Income Portfolio (FidEqInc)
124,904 shares (cost $1,899,224)......................................................... 2,109,626
Nationwide SAT -- Government Bond Fund (NWGvtBd)
53,557 shares (cost $569,150)............................................................ 591,803
Nationwide SAT -- Money Market Fund (NWMyMkt)
192,309 shares (cost $192,309)........................................................... 192,309
Nationwide SAT -- Total Return Fund (NWTotRet)
96,273 shares (cost $981,093)............................................................ 1,068,625
Neuberger & Berman --Balanced Portfolio (NBBal)
34,675 shares (cost $507,452)............................................................ 569,024
TCI Portfolios -- TCI Advantage (TCIAdv)
29,579 shares (cost $162,890)............................................................ 175,404
TCI Portfolios -- TCI Growth (TCIGro)
91,760 shares (cost $838,713)............................................................ 1,008,444
---------
Total investments................................................................... 6,211,728
Accounts receivable.......................................................................... 1,423
---------
Total assets........................................................................ 6,213,151
=========
CONTRACT OWNERS' EQUITY....................................................................... $ 6,213,151
=========
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
----- ----------
<S> <C> <C> <C>
Contracts in accumulation phase:
Dreyfus Stock Index Fund:
Tax qualified..................................... 27,598 $ 12.176915 $ 336,059
Non-tax qualified................................. 13,176 12.176915 160,443
Fidelity VIP -- Equity-Income Portfolio:
Tax qualified..................................... 133,036 12.579456 1,673,521
Non-tax qualified................................. 34,667 12.579456 436,092
Nationwide SAT -- Government Bond Fund:
Tax qualified..................................... 11,506 27.941908 321,500
Non-tax qualified................................. 9,670 27.952211 270,298
Nationwide SAT -- Money Market Fund:
Tax qualified..................................... 10,092 19.197459 193,741
Nationwide SAT -- Total Return Fund:
Tax qualified..................................... 17,962 46.777431 840,216
Non-tax qualified................................. 5,028 45.431980 228,432
Neuberger & Berman -- Balanced Portfolio:
Tax qualified..................................... 33,707 13.909110 468,834
Non-tax qualified................................. 7,202 13.909110 100,173
TCI Portfolios -- TCI Advantage:
Tax qualified..................................... 6,732 12.341197 83,081
Non-tax qualified................................. 7,481 12.341197 92,324
TCI Portfolios -- TCI Growth:
Tax qualified..................................... 54,626 15.086649 824,123
Non-tax qualified................................. 12,217 15.086649 184,314
======= ========= ---------
$ 6,213,151
=========
</TABLE>
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
17
<PAGE> 18
--------------------------------------------------------------------------------
NATIONWIDE VARIABLE ACCOUNT - 5
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends..................... $ 163,556 19,130
--------- ---------
Gain (loss) on investments:
Proceeds from redemptions of mutual fund shares.......... 725,286 86,531
Cost of mutual fund shares sold.......................... (718,871) (86,309)
--------- ---------
Realized gain on investments............................. 6,415 222
Change in unrealized gain (loss) on investments.......... 641,750 (64,481)
--------- ---------
Net gain (loss) on investments......................... 648,165 (64,259)
--------- ---------
Net investment activity.......................... 811,721 (45,129)
--------- ---------
EQUITY TRANSACTIONS:
Purchase payments received from contract owners............ 1,151,176 3,372,915
Redemptions................................................ (201,277) (8,965)
Adjustments to maintain reserves........................... (47) 33
--------- ---------
Net equity transactions.......................... 949,852 3,363,983
--------- ---------
EXPENSES (NOTE 2):
Contract charges........................................... (42,107) (4,826)
Contingent deferred sales charges.......................... (7,994) (333)
--------- ---------
Total expenses................................... (50,101) (5,159)
--------- ---------
NET CHANGE IN CONTRACT OWNERS' EQUITY........................ 1,711,472 3,313,695
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD.................. 4,501,679 --
--------- ---------
CONTRACT OWNERS' EQUITY END OF PERIOD........................ $ 6,213,151 3,313,695
========= =========
</TABLE>
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
18
<PAGE> 19
--------------------------------------------------------------------------------
NATIONWIDE VARIABLE ACCOUNT - 5
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 AND 1994
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
The Nationwide Variable Account-5 (the Account) was established pursuant to
a resolution of the Board of Directors of Nationwide Life Insurance Company
(the Company) on November 1, 1989. The Account has been registered as a unit
investment trust under the Investment Company Act of 1940. On December 31,
1993, the accumulation unit values for each fund sub-account of Nationwide
Variable Account-5 were established at a unit value equal to the accumulation
unit values of the corresponding fund sub-account of the Nationwide Multi-Flex
Variable Account. The first deposits were received by the Account on May 4,
1994.
(b) The Contracts
Only flexible purchase payment contracts without a front-end sales charge,
but with a contingent deferred sales charge and certain other fees, are offered
for purchase. See note 2 for a discussion of contract expenses. Contract owners
in either the accumulation or payout phase may invest in any of the following:
Dreyfus Stock Index Fund (DryStkIx)
Portfolio of the Fidelity Variable Insurance Products Fund (Fidelity VIP);
Fidelity VIP -- Equity-Income Portfolio (FidEqInc)
Funds of the Nationwide Separate Account Trust (Nationwide SAT) (managed
for a fee by an affiliated investment advisor);
Nationwide SAT -- Government Bond Fund (NWGvtBd)
Nationwide SAT -- Money Market Fund (NWMyMkt)
Nationwide SAT -- Total Return Fund (NWTotRet)
Portfolio of the Neuberger & Berman Advisers Management Trust (Neuberger &
Berman);
Neuberger & Berman -- Balanced Portfolio (NBBal)
Portfolios of the TCI Portfolios, Inc. (TCI Portfolios);
TCI Portfolios -- TCI Advantage (TCIAdv)
TCI Portfolios -- TCI Growth (TCIGro)
At June 30, 1995, contract owners have invested in all of the above funds.
The contract owners' equity is affected by the investment results of each fund
and certain contract expenses (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 bid prices at June
30, 1995. The cost of investments sold is determined on a specific
identification basis. Investment transactions are accounted for on the trade
date (date the order to buy or sell is executed) and dividend income is
recorded on the ex-dividend date.
19
<PAGE> 20
(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 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.
(2) EXPENSES
The Company does not deduct a sales charge from purchase payments received
from the contract owners. However, if any part of the contract value of such
contracts is surrendered, the Company will, with certain exceptions, deduct
from a contract owner's contract value a contingent deferred sales charge, not
to exceed 7% of the lesser of purchase payments or the amount surrendered, such
charge declining 1% per year, to 0%, after the purchase payment has been held
in the contract for 84 months. No sales charges are deducted on redemptions
used to purchase units in the fixed investment options of the Company.
The following administrative charges are deducted by the Company: (a) an
annual contract maintenance charge of $30, with certain exceptions, which is
satisfied by surrendering units; and (b) a mortality risk charge, an expense
risk charge and an administration charge assessed through the daily unit value
calculation equal to an annual rate of 0.80%, 0.45% and 0.05%, respectively.
(3) SCHEDULE I
Schedule I presents the components of the change in the unit values, which
are the basis for contract owners' equity. This schedule is presented for each
series, as applicable, in the following format:
- Beginning unit value - Jan. 1
- Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to capital
gains and dividend distributions from the underlying mutual funds.)
- Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the fund.)
- Contract charges
(This amount reflects the decrease in the unit value due to the
mortality risk charge, expense risk charge and administration charge
discussed in note 2.)
- Ending unit value - June 30
- Percentage increase (decrease) in unit value.
For contracts in the payout phase, an assumed investment return of 3.5%,
used in the calculation of the annuity benefit payment amount, results in a
corresponding reduction in the components of the unit values as shown in
Schedule I.
--------------------------------------------------------------------------------
20
<PAGE> 21
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SCHEDULE I
NATIONWIDE VARIABLE ACCOUNT -5
TAX QUALIFIED AND NON-TAX QUALIFIED
SCHEDULES OF CHANGES IN UNIT VALUE
SIX MONTH PERIODS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
NWGVTBD NWGVTBD NWMYMKT
DRYSTKIX FIDEQINC QUAL. NON-QUAL. QUAL.
-------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
1995**
Beginning unit value - Jan. 1 $10.227308 10.808255 25.138302 25.147577 18.790546
------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .126203 .696469 .865541 .865860 .531125
------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.896381 1.151231 2.110894 2.111676 .000000
------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.072977) (.076499) (.172829) (.172902) (.124212)
------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $12.176915 12.579456 27.941908 27.952211 19.197459
------------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* 19% 16% 11% 11% 2%
====================================================================================================================================
1994**
Beginning unit value - Jan. 1 $10.271065 10.227513 26.318797 26.328516 18.325918
------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .054292 .641584 .785221 .785511 .289499
------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.417159) (.523924) (1.826612) (1.827284) .000000
------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.065924) (.067007) (.167004) (.167073) (.119563)
------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $ 9.842274 10.278166 25.110402 25.119670 18.495854
------------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* (4)% 0% (5)% (5)% 1%
====================================================================================================================================
<CAPTION>
NWTOTRET NWTOTRET
QUAL. NON-QUAL. NBBAL TCIADV TCIGRO
------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
1995**
Beginning unit value - Jan. 1 $40.575816 39.408735 12.077573 11.312248 12.711014
------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .626675 .608650 .307323 .175923 .014626
------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 5.859308 5.690781 1.608511 .929239 2.449089
------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.284368) (.276186) (.084297) (.076213) (.088080)
------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $46.777431 45.431980 13.909110 12.341197 15.086649
------------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* 15% 15% 15% 9% 19%
====================================================================================================================================
1994**
Beginning unit value - Jan. 1 40.671816 39.501981 12.661508 11.343435 13.030369
------------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .502500 .488047 .493737 .129050 .001393
------------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.596269) (.579116) (1.369729) (.304900) (.916849)
------------------------------------------------------------------------------------------------------------------------------------
Contract charges (.264556) (.256951) (.080910) (.073870) (.084356)
------------------------------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 40.313491 39.153961 11.704606 11.093715 12.030557
------------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* (1)% (1)% (8)% (2)% (8)%
====================================================================================================================================
<FN>
* This is not an annualized rate of return as it is the change for a six month period and contract charges do not include the annual
contract maintenance charge discussed in note 2.
**No other investment options were being utilized.
</TABLE>
21
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[THIS PAGE LEFT BLANK INTENTIONALLY]
22
<PAGE> 23
This report is for the information of contract owners with funds in the
Nationwide Variable Account-5. It may also be used, from time to time, as sales
literature, but only when accompanied or preceded by the current prospectus,
which contains complete information about the contracts which invest in the
separate account, and their fees, charges and expenses. If this report is used
as sales literature after September 30, 1995, it must be accompanied by the
fund performance report reflecting performances for the most recently completed
calendar quarter. Prospective investors should read the prospectus carefully
before investing.
23
<PAGE> 24
<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>
