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NATIONWIDE(R)
FIDELITY
ADVISOR
VARIABLE
ACCOUNT
ANNUAL REPORT
FIDELITY
ADVISOR
ANNUITIES(sm)
DECEMBER 31, 1995
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[NATIONWIDE LIFE INSURANCE COMPANY LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43216
[PHOTO OF PETER F. FRENZER]
PRESIDENT'S MESSAGE
Nationwide Life Insurance Company is pleased to bring you the 1995 annual report
of the Nationwide Fidelity Advisor Variable Account.
Both equity and fixed income investments turned in a stellar performance during
1995. The major market indices ended the year fully one-third or more higher
than their levels at the beginning of the year. These results equate directly to
the returns enjoyed by our variable annuity participants and contract owners.
Low interest rates and modest inflation should provide a continued favorable
environment for stocks and fixed income investments during 1996. Slowing levels
of economic activity and uncertainty about corporate profits may, however,
dampen a repeat of the strong 1995 market performance. The diverse offering of
investment options within your contract should enable you to take advantage of
changing market conditions.
The year 1995 was a record-setting sales year for our variable investment
products. For this we thank you, our valued customer, for your confidence in the
Nationwide Insurance Enterprise and in our products. Please do not hesitate to
let us know how we can better serve your financial planning and retirement
needs.
/s/Peter F. Frenzer
Peter F. Frenzer, President
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NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments at market value:
Fidelity Advisor Annuity Government Investment Fund (FAAGvInv)
757,673 shares (cost $8,418,241) .......................... $ 8,395,016
Fidelity Advisor Annuity Growth Opportunities Fund (FAAGroOp)
12,568,860 shares (cost $153,577,483) ..................... 164,274,999
Fidelity Advisor Annuity High Yield Fund (FAAHiYld)
3,399,341 shares (cost $38,988,010) ....................... 39,364,365
Fidelity Advisor Annuity Income & Growth Fund (FAAIncGr)
3,863,222 shares (cost $42,013,333) ....................... 43,152,191
Fidelity Advisor Annuity Money Market Fund (FAAMyMkt)
28,974,511 shares (cost $28,974,511) ...................... 28,974,511
Fidelity Advisor Annuity Overseas Fund (FAAOSeas)
1,505,319 shares (cost $16,122,382) ....................... 16,483,238
------------
Total investments ..................................... 300,644,320
Accounts receivable ............................................ 8,007
------------
Total assets .......................................... 300,652,327
============
CONTRACT OWNERS' EQUITY ........................................ $300,652,327
============
</TABLE>
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<TABLE>
<CAPTION>
Contract owners' equity represented by: Units Unit Value
----- ----------
<S> <C> <C> <C>
Fidelity Advisor Annuity Classic contracts:
Fidelity Advisor Annuity
Government Investment Fund:
Tax qualified .......................... 27,705 $ 11.504795 $ 318,740
Non-tax qualified ...................... 20,929 11.504795 240,784
Fidelity Advisor Annuity
Growth Opportunities Fund:
Tax qualified .......................... 765,860 13.082083 10,019,044
Non-tax qualified ...................... 706,845 13.082083 9,247,005
Fidelity Advisor Annuity High Yield Fund:
Tax qualified .......................... 138,890 11.858324 1,647,003
Non-tax qualified ...................... 136,503 11.858324 1,618,697
Fidelity Advisor Annuity
Income & Growth Fund:
Tax qualified .......................... 208,830 11.245581 2,348,415
Non-tax qualified ...................... 214,834 11.245581 2,415,933
Fidelity Advisor Annuity Money Market Fund:
Tax qualified .......................... 68,159 10.385538 707,868
Non-tax qualified ...................... 93,702 10.385538 973,146
Fidelity Advisor Annuity Overseas Fund:
Tax qualified .......................... 73,727 10.868973 801,337
Non-tax qualified ...................... 56,545 10.868973 614,586
Fidelity Advisor Annuity Select contracts:
Fidelity Advisor Annuity
Government Investment Fund:
Tax qualified .......................... 237,795 11.493314 2,733,053
Non-tax qualified ...................... 443,946 11.493314 5,102,411
Fidelity Advisor Annuity
Growth Opportunities Fund:
Tax qualified .......................... 2,965,497 13.069019 38,756,137
Non-tax qualified ...................... 8,130,130 13.069019 106,252,823
Fidelity Advisor Annuity High Yield Fund:
Tax qualified .......................... 798,794 11.846502 9,462,915
Non-tax qualified ...................... 2,248,404 11.846502 26,635,722
Fidelity Advisor Annuity
Income & Growth Fund:
Tax qualified .......................... 975,789 11.234358 10,962,363
Non-tax qualified ...................... 2,441,208 11.234358 27,425,405
Fidelity Advisor Annuity Money Market Fund:
Tax qualified .......................... 798,314 10.375160 8,282,635
Non-tax qualified ...................... 1,833,132 10.375160 19,019,038
Fidelity Advisor Annuity Overseas Fund:
Tax qualified .......................... 369,362 10.858102 4,010,570
Non-tax qualified ...................... 1,018,290 10.858102 11,056,697
========= ================ ----------------
$ 300,652,327
================
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENT OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
1995
----
<S> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends ................ $ 5,253,187
-------------
Gain (loss) on investments:
Proceeds from redemptions of mutual fund shares ..... 10,325,387
Cost of mutual fund shares sold ..................... (10,182,494)
-------------
Realized gain (loss) on investments ................. 142,893
Change in unrealized gain (loss) on investments ..... 12,550,359
-------------
Net gain (loss) on investments .................... 12,693,252
-------------
Net investment activity ....................... 17,946,439
-------------
EQUITY TRANSACTIONS:
Purchase payments received from contract owners ....... 286,274,311
Redemptions ........................................... (2,222,588)
Adjustments to maintain reserves ...................... 8,009
-------------
Net equity transactions ....................... 284,059,732
-------------
EXPENSES (NOTE 2):
Contract charges ...................................... (1,324,828)
Contingent deferred sales charges ..................... (29,016)
-------------
Total expenses ................................ (1,353,844)
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NET CHANGE IN CONTRACT OWNERS' EQUITY ................... 300,652,327
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............. --
-------------
CONTRACT OWNERS' EQUITY END OF PERIOD ................... $ 300,652,327
=============
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
Nationwide Fidelity Advisor Variable Account (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life Insurance
Company (the Company) on July 22, 1994. The Account has been registered as a
unit investment trust under the Investment Company Act of 1940.
The Company offers tax qualified and non-tax qualified Individual Deferred
Variable Annuity Contracts, and Individual Modified Single Premium Deferred
Variable Annuity Contracts through the Account. The primary distribution for the
contracts is through Fidelity Investments(R).
(b) The Contracts
Only 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 the payout phase may invest in
any of the following:
Fidelity Advisor Annuity Government Investment Fund (FAAGvInv)
Fidelity Advisor Annuity Growth Opportunities Fund (FAAGroOp)
Fidelity Advisor Annuity High Yield Fund (FAAHiYld)
Fidelity Advisor Annuity Income & Growth Fund (FAAIncGr)
Fidelity Advisor Annuity Money Market Fund (FAAMyMkt)
Fidelity Advisor Annuity Overseas Fund (FAAOSeas)
At December 31, 1995, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment results of each
fund, equity transactions by contract owners 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 the underlying mutual funds is based on the closing net
asset value per share at December 31, 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.
(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.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles may require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities, if any, at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
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(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) for
the Fidelity Advisor Annuity Classic contracts an annual contract maintenance
charge of $30, with certain exceptions, which is satisfied by surrendering
units; and (b) for the Fidelity Advisor Annuity Classic contracts 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; for the Fidelity Advisor Annuity Select contracts a
mortality risk charge, an expense risk charge and an administration charge
assessed through the daily unit value calculations equal to an annual rate of
0.80%, 0.45% and 0.15%, 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
underlying mutual funds.)
- 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 - Dec. 31
- 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.
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SCHEDULE I
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
FIDELITY ADVISOR ANNUITY CLASSIC CONTRACTS
TAX QUALIFIED AND NON-TAX QUALIFIED
SCHEDULE OF CHANGES IN UNIT VALUE
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
FAAGvInv FAAGroOp FAAHiYld FAAIncGr FAAMyMkt FAAOSeas
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1995
Beginning unit value - Jan. 1 $ 10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
- ----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains and dividends .562856 .177745 .424612 .217242 .517389 .059248
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.081135 3.053458 1.576049 1.165103 .000000 .944343
- ----------------------------------------------------------------------------------------------------------------------------------
Contract charges (.139196) (.149120) (.142337) (.136764) (.131851) (.134618)
- ----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $ 11.504795 13.082083 11.858324 11.245581 10.385538 10.868973
- ----------------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 15% 31% 19% 12% 4% 9%
==================================================================================================================================
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the annual contract maintenance charge discussed in note 2.
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SCHEDULE I, CONTINUED
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
FIDELITY ADVISOR ANNUITY SELECT CONTRACTS
TAX QUALIFIED AND NON-TAX QUALIFIED
SCHEDULE OF CHANGES IN UNIT VALUE
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
FAAGvInv FAAGroOp FAAHiYld FAAIncGr FAAMyMkt FAAOSeas
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1995
Beginning unit value - Jan. 1 $10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
- -------------------------------------------------------------------------------------------------------------------
Reinvested capital gains and dividends .562307 .177572 .424198 .217030 .517131 .059190
- -------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.080916 3.052053 1.575576 1.164620 .000000 .943888
- -------------------------------------------------------------------------------------------------------------------
Contract charges (.149909) (.160606) (.153272) (.147292) (.141971) (.144976)
- -------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $11.493314 13.069019 11.846502 11.234358 10.375160 10.858102
- -------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 15% 31% 18% 12% 4% 9%
===================================================================================================================
</TABLE>
*An annualized rate of return cannot be determined as contract charges do
not include the annual contract maintenance charge discussed in note 2.
See note 3.
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INDEPENDENT AUDITORS' REPORT
The Board of Directors and Contract Owners of
Nationwide Fidelity Advisor Variable Account
Nationwide Life Insurance Company:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide Fidelity Advisor Variable Account as of
December 31, 1995, and the related statement of operations and changes in
contract owners' equity and schedule of changes in unit value for the year then
ended. These financial statements and schedule of changes in unit value are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule of changes in unit value
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedule of
changes in unit value 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 December 31, 1995, by correspondence with the custodian and the
transfer agents of the underlying mutual funds. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and schedule of changes in unit
value referred to above present fairly, in all material respects, the financial
position of Nationwide Fidelity Advisor Variable Account as of December 31,
1995, and the results of its operations and its changes in contract owners'
equity and the schedule of changes in unit value for the year then ended in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 6, 1996
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[NATIONWIDE LIFE INSURANCE COMPANY LOGO] [FIDELITY INVESTMENTS LOGO]
Nationwide Life Insurance Company. Home Office: Columbus, Ohio
Before investing, understand that variable annuities are not insured by the
FDIC or any other government agency, are not bank deposits, and are not the
obligation of, or guaranteed by, the financial institution where they are
offered.
Variable annuities involve investment risk, including the possible
loss of principal.
Nationwide(R) is a registered federal service mark of
Nationwide Mutual Insurance Company
