<PAGE> 1
N A T I O N W I D E(R)
F I D E L I T Y
A D V I S O R
V A R I A B L E
A C C O U N T
Semi-Annual Report
F I D E L I T Y
A D V I S O R
A N N U I T I E S(SM)
June 30, 1997
<PAGE> 2
[NATIONWIDE LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[PICTURE]
PRESIDENT'S MESSAGE
We are pleased to present the 1997 semi-annual report of the Nationwide Fidelity
Advisor Variable Account.
Our Enterprise Vision statement states: "We exist to serve our customers."
Everything we do is focused on you, our customer, and on your needs.
We recognize that your expectations have changed and your standards for value
and service are higher than ever before. You are being asked to take more
responsibility for your own financial future, as employers and government
programs provide fewer guarantees.
We know that you expect service and products customized to fit your needs -
including financial advice - and you expect to receive service at any time,
anywhere and any way you choose.
We are responding to your changing needs and expectations with innovative
product offerings, continuing investment in the training and professional
development of our people, and our investment in technology to enable us to
serve you faster, better and more cost effectively.
Equity investments produced solid gains for the first half of 1997 with the Dow
Jones Industrial Average breaking the 8,000 mark on July 16. The U.S. economy,
in its seventh year of expansion, is growing vigorously and corporate profits
are better than anticipated.
Interest rates and inflation are still at very low levels. However, the risk of
a temporary spike remains as the Federal Reserve might be forced to raise
interest rates in order to keep our economy on an inflation-free growth path.
Even such policy actions are not expected to end the prosperous times which we
now enjoy. In the long run, equity valuations will reflect these excellent
economic conditions.
Thank you for giving Nationwide Life Insurance Company the opportunity to meet
your investment needs.
/s/ Joseph J. Gasper
Joseph J. Gasper, President
3
<PAGE> 3
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments at market value:
Fidelity VIP - Equity-Income Portfolio
749,341 shares (cost $15,331,774) .................... $ 16,530,469
Fidelity VIP - Growth Portfolio
260,129 shares (cost $8,265,854) ..................... 8,896,404
Fidelity VIP - High Income Portfolio
9,598,072 shares (cost $113,725,357) ................. 119,304,041
Fidelity VIP - Money Market Portfolio
52,360,553 shares (cost $52,360,553) ................. 52,360,553
Fidelity VIP - Overseas Portfolio
3,332,761 shares (cost $59,523,933) .................. 66,788,525
Fidelity VIP-II - Asset Manager Portfolio
265,530 shares (cost $4,167,101) ..................... 4,407,800
Fidelity VIP-II - Asset Manager: Growth Portfolio
312,364 shares (cost $4,340,808) ..................... 4,663,600
Fidelity VIP-II - Contrafund Portfolio
1,480,608 shares (cost $24,703,353) .................. 26,547,304
Fidelity VIP-II - Index 500 Portfolio
133,548 shares (cost $12,758,769) .................... 13,838,244
Fidelity VIP-II - Investment Grade Bond Portfolio
2,054,773 shares (cost $23,700,400) .................. 24,328,514
Fidelity VIP-III - Balanced Portfolio
9,295,519 shares (cost $104,817,420) ................. 126,512,014
Fidelity VIP-III - Growth and Income Portfolio
1,003,710 shares (cost $10,566,005) .................. 11,532,630
Fidelity VIP-III - Growth Opportunities Portfolio
29,321,124 shares (cost $395,141,002) ................ 501,977,638
------------
Total investments ................................. 977,687,736
Accounts Receivable ........................................ 10,994
------------
Total assets ...................................... 977,698,730
ACCOUNTS PAYABLE .............................................. 2,114
------------
CONTRACT OWNERS' EQUITY ....................................... $977,696,616
============
</TABLE>
4
<PAGE> 4
<TABLE>
<CAPTION>
Contract owners' equity represented by: UNITS UNIT VALUE
----- ----------
<S> <C> <C> <C>
FIDELITY ADVISOR ANNUITY CLASSIC CONTRACTS:
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ................................. 56,164 $11.210020 $ 629,600
Non-tax qualified ............................. 20,480 11.210020 229,581
Fidelity VIP - Growth Portfolio:
Tax qualified ................................. 43,206 10.784056 465,936
Non-tax qualified ............................. 11,001 10.784056 118,635
Fidelity VIP - High Income Portfolio:
Tax qualified ................................. 368,848 10.939795 4,035,122
Non-tax qualified ............................. 303,441 10.939795 3,319,582
Fidelity VIP - Money Market Portfolio:
Tax qualified ................................. 101,872 10.264849 1,045,701
Non-tax qualified ............................. 70,148 10.264849 720,059
Fidelity VIP - Overseas Portfolio:
Tax qualified ................................. 268,956 12.170141 3,273,232
Non-tax qualified ............................. 221,357 12.170141 2,693,946
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ................................. 6,991 10.820054 75,643
Non-tax qualified ............................. 7,792 10.820054 84,310
Fidelity VIP-II - Asset Manager: Growth Portfolio:
Tax qualified ................................. 14,977 10.979227 164,436
Non-tax qualified ............................. 6,430 10.979227 70,596
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ................................. 115,953 10.629947 1,232,574
Non-tax qualified ............................. 68,588 10.629947 729,087
Fidelity VIP-II - Index 500 Portfolio:
Tax qualified ................................. 46,216 11.403639 527,031
Non-tax qualified ............................. 18,655 11.403639 212,735
Fidelity VIP-II - Investment Grade Bond Portfolio:
Tax qualified ................................. 114,436 10.276500 1,176,002
Non-tax qualified ............................. 54,477 10.276500 559,833
Fidelity VIP-III - Balanced Portfolio:
Tax qualified ................................. 481,831 13.831602 6,664,495
Non-tax qualified ............................. 382,423 13.831602 5,289,523
Fidelity VIP-III- Growth and Income Portfolio:
Tax qualified ................................. 35,645 11.101975 395,730
Non-tax qualified ............................. 13,090 11.101975 145,325
Fidelity VIP-III - Growth Opportunities Portfolio:
Tax qualified ................................. 1,471,436 17.516051 25,773,748
Non-tax qualified ............................. 1,389,195 17.516051 24,333,210
</TABLE>
5
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIDELITY ADVISOR ANNUITY SELECT CONTRACTS:
Fidelity VIP - Equity-Income Portfolio:
Tax qualified ................................. 465,770 11.205019 5,218,962
Non-tax qualified ............................. 932,829 11.205019 10,452,367
Fidelity VIP - Growth Portfolio:
Tax qualified ................................. 205,900 10.779237 2,219,445
Non-tax qualified ............................. 565,199 10.779237 6,092,414
Fidelity VIP - High Income Portfolio:
Tax qualified ................................. 3,057,388 10.932486 33,424,852
Non-tax qualified ............................. 7,182,845 10.932486 78,526,352
Fidelity VIP - Money Market Portfolio:
Tax qualified ................................. 1,832,851 10.257985 18,801,358
Non-tax qualified ............................. 3,099,369 10.257985 31,793,281
Fidelity VIP - Overseas Portfolio:
Tax qualified ................................. 1,550,434 12.162009 18,856,392
Non-tax qualified ............................. 3,450,712 12.162009 41,967,590
Fidelity VIP-II - Asset Manager Portfolio:
Tax qualified ................................. 77,201 10.815229 834,946
Non-tax qualified ............................. 315,565 10.815229 3,412,908
Fidelity VIP-II - Asset Manager: Growth Portfolio:
Tax qualified ................................. 150,092 10.974324 1,647,158
Non-tax qualified ............................. 253,448 10.974324 2,781,420
Fidelity VIP-II - Contrafund Portfolio:
Tax qualified ................................. 763,925 10.625194 8,116,851
Non-tax qualified ............................. 1,549,982 10.625194 16,468,859
Fidelity VIP-II - Index 500 Portfolio:
Tax qualified ................................. 318,456 11.398546 3,629,935
Non-tax qualified ............................. 830,683 11.398546 9,468,578
Fidelity VIP-II - Investment Grade Bond Portfolio:
Tax qualified ................................. 765,575 10.269623 7,862,167
Non-tax qualified ............................. 1,434,394 10.269623 14,730,686
Fidelity VIP-III - Balanced Portfolio:
Tax qualified ................................. 2,505,536 13.796801 34,568,382
Non-tax qualified ............................. 5,797,744 13.796801 79,990,320
Fidelity VIP-III- Growth and Income Portfolio:
Tax qualified ................................. 315,235 11.097006 3,498,165
Non-tax qualified ............................. 675,266 11.097006 7,493,431
Fidelity VIP-III - Growth Opportunities Portfolio:
Tax qualified ................................. 7,450,057 17.471975 130,167,210
Non-tax qualified ............................. 18,412,739 17.471975 321,706,915
============ ================ ------------
$977,696,616
============
</TABLE>
6
See accompanying notes to financial statements.
<PAGE> 6
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
GOVERNMENT
TOTALS INVESTMENT FUND
---------------------------- -------------------------
1997 1996 1997 1996
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ 12,323,493 846,087 287,288 -
Mortality, expense and administration
charges (note 2)..................... (5,557,342) (2,859,678) (56,693) (88,238)
------------ ------------ ----------- -----------
Net investment activity.............. 6,766,151 (2,013,591) 230,595 (88,238)
------------ ------------ ----------- -----------
Proceeds from mutual fund shares sold.. 228,213,050 18,541,494 20,683,351 291,650
Cost of mutual fund shares sold........ (228,529,593) (18,069,224) (21,543,654) (278,901)
------------ ------------ ----------- -----------
Realized gain (loss) on investments.. (316,543) 472,270 (860,303) 12,749
Change in unrealized gain (loss) on
investments...................... 73,442,497 16,410,786 502,588 (268,066)
------------ ------------ ----------- -----------
Net gain (loss) on investments....... 73,125,954 16,883,056 (357,715) (255,317)
------------ ------------ ----------- -----------
Reinvested capital gains............... 16,886,522 962,064 - -
------------ ------------ ----------- -----------
Net increase (decrease) in contract
owners' equity resulting from operations. 96,778,627 15,831,529 (127,120) (343,555)
------------ ------------ ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds 225,800,134 206,478,044 (19,643,107) 8,238,609
Redemptions............................ (18,800,819) (6,527,860) (279,350) (338,667)
Annual contract maintenance charge (note 2) (49,658) (18,869) (386) (284)
Contingent deferred sales charges (note 2) (426,122) (86,805) (11,183) (2,877)
Adjustments to maintain reserves....... (2,437) 33,118 13 84
------------ ------------ ----------- -----------
Net equity transactions............ 206,521,098 199,877,628 (19,934,013) 7,896,865
------------ ------------ ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 303,299,725 215,709,157 (20,061,133) 7,553,310
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 674,396,891 300,652,327 20,061,133 8,394,988
------------ ------------ ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $977,696,616 516,361,484 - 15,948,298
============ ============ =========== ===========
<CAPTION>
HIGH YIELD FUND MONEY MARKET FUND
---------------------------- -------------------------
1997 1996 1997 1996
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. 1,664,977 - 290,239 828,174
Mortality, expense and administration
charges (note 2)..................... (265,500) (378,167) (81,263) (225,368
----------- ------------ ------------ ------------
Net investment activity.............. 1,399,477 (378,167) 208,976 602,806
----------- ------------ ------------ ------------
Proceeds from mutual fund shares sold.. 97,566,593 1,048,007 34,287,294 15,517,221
Cost of mutual fund shares sold........ (98,450,573) (916,497) (34,287,294) (15,517,221)
----------- ------------ ------------ ------------
Realized gain (loss) on investments.. (883,980) 131,510 - -
Change in unrealized gain (loss) on
investments...................... (2,411,864) 2,195,823 - -
----------- ------------ ------------ ------------
Net gain (loss) on investments....... (3,295,844) 2,327,333 - -
----------- ------------ ------------ ------------
Reinvested capital gains............... 3,446,055 38,004 - -
----------- ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from operations. 1,549,688 1,987,170 208,976 602,806
----------- ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds (91,219,675) 27,017,309 (29,491,276) 6,907,990
Redemptions............................ (1,335,478) (951,057) (643,822) (984,682)
Annual contract maintenance charge (note 2) (1,254) (1,398) (196) (543)
Contingent deferred sales charges (note 2) (37,325) (11,343) (8,540) (11,445)
Adjustments to maintain reserves....... 352 397 2,487 1,547
----------- ------------ ------------ ------------
Net equity transactions............ (92,593,380) 26,053,908 (30,141,347) 5,912,867
----------- ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... (91,043,692) 28,041,078 (29,932,371) 6,515,673
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 91,043,692 39,364,337 29,932,371 28,982,687
----------- ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... - 67,405,415 - 35,498,360
=========== ============ ============ ============
</TABLE>
7
<PAGE> 7
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
OVERSEAS FUND EQUITY - INCOME PORTFOLIO
1997 1996 1997 1996
------------ ----------- ----------- -----
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends .......................... $ 53,871 17,913 15,751 --
Mortality, expense and administration
charges (note 2) ............................ (128,292) (177,004) (43,170) --
------------ ----------- ----------- -----
Net investment activity ..................... (74,421) (159,091) (27,419) --
------------ ----------- ----------- -----
Proceeds from mutual fund shares sold ......... 48,228,759 263,642 -- --
Cost of mutual fund shares sold ............... (48,637,341) (241,997) -- --
------------ ----------- ----------- -----
Realized gain (loss) on investments ......... (408,582) 21,645 -- --
Change in unrealized gain (loss) on investments (2,797,481) 1,626,039 1,198,695 --
------------ ----------- ----------- -----
Net gain (loss) on investments .............. (3,206,063) 1,647,684 1,198,695 --
------------ ----------- ----------- -----
Reinvested capital gains ...................... 4,309,141 -- 79,191 --
------------ ----------- ----------- -----
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,028,657 1,488,593 1,250,467 --
------------ ----------- ----------- -----
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... (45,792,905) 16,522,712 15,389,688 --
Redemptions ................................... (425,271) (239,467) (109,239) --
Annual contract maintenance charge (note 2) ... (821) (1,449) (64) --
Contingent deferred sales charges (note 2) .... (9,277) (4,575) (431) --
Adjustments to maintain reserves .............. 1,590 573 89 --
------------ ----------- ----------- -----
Net equity transactions ................... (46,226,684) 16,277,794 15,280,043 --
------------ ----------- ----------- -----
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... (45,198,027) 17,766,387 16,530,510 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 45,198,027 16,483,190 -- --
------------ ----------- ----------- -----
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ -- 34,249,577 16,530,510 --
============ =========== =========== =====
GROWTH PORTFOLIO HIGH INCOME PORTFOLIO
1997 1996 1997 1996
---------- ----- ------------ -----
INVESTMENT ACTIVITY:
<S> <C> <C> <C> <C>
Reinvested dividends .......................... 4,508 -- 105,786 --
Mortality, expense and administration
charges (note 2) ............................ (23,873) -- (445,322) --
---------- ----- ------------ -----
Net investment activity ..................... (19,365) -- (339,536) --
---------- ----- ------------ -----
Proceeds from mutual fund shares sold ......... 269,280 -- 3,689,991 --
Cost of mutual fund shares sold ............... (286,713) -- (3,876,133) --
---------- ----- ------------ -----
Realized gain (loss) on investments ......... (17,433) -- (186,142) --
Change in unrealized gain (loss) on investments 630,550 -- 5,577,302 --
---------- ----- ------------ -----
Net gain (loss) on investments .............. 613,117 -- 5,391,160 --
---------- ----- ------------ -----
Reinvested capital gains ...................... 20,178 -- 13,075 --
---------- ----- ------------ -----
Net increase (decrease) in contract owners'
equity resulting from operations ........ 613,930 -- 5,064,699 --
---------- ----- ------------ -----
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 8,323,529 -- 115,623,466 --
Redemptions ................................... (40,922) -- (1,522,391) --
Annual contract maintenance charge (note 2) ... (28) -- (2,586) --
Contingent deferred sales charges (note 2) .... (104) -- (27,220) --
Adjustments to maintain reserves .............. 25 -- 1,552 --
---------- ----- ------------ -----
Net equity transactions ................... 8,282,500 -- 114,072,821 --
---------- ----- ------------ -----
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 8,896,430 -- 119,137,520 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... -- -- 168,388 --
---------- ----- ------------ -----
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 8,896,430 -- 119,305,908 --
========== ===== ============ =====
</TABLE>
8
<PAGE> 8
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO OVERSEAS PORTFOLIO ASSET MANAGER PORTFOLIO
----------------------- ---------------------- -----------------------
1997 1996 1997 1996 1997 1996
------------ ----- ----------- ----- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 840,480 -- 13,050 -- 5,034 --
Mortality, expense and administration
charges (note 2) ............................ (222,153) -- (235,746) -- (11,672) --
------------ ----- ----------- ----- ---------- -----
Net investment activity ..................... 618,327 -- (222,696) -- (6,638) --
------------ ----- ----------- ----- ---------- -----
Proceeds from mutual fund shares sold ......... 14,263,286 -- 947,517 -- 53,664 --
Cost of mutual fund shares sold ............... (14,263,286) -- (958,768) -- (59,003) --
------------ ----- ----------- ----- ---------- -----
Realized gain (loss) on investments ......... -- -- (11,251) -- (5,339) --
Change in unrealized gain (loss) on investments -- -- 7,260,020 -- 240,699 --
------------ ----- ----------- ----- ---------- -----
Net gain (loss) on investments .............. -- -- 7,248,769 -- 235,360 --
------------ ----- ----------- ----- ---------- -----
Reinvested capital gains ...................... -- -- 51,803 -- 12,628 --
------------ ----- ----------- ----- ---------- -----
Net increase (decrease) in contract owners'
equity resulting from operations ........ 618,327 -- 7,077,876 -- 241,350 --
------------ ----- ----------- ----- ---------- -----
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 51,327,246 -- 60,318,842 -- 4,182,807 --
Redemptions ................................... (981,068) -- (816,584) -- (16,387) --
Annual contract maintenance charge (note 2) ... (719) -- (2,560) -- (3) --
Contingent deferred sales charges (note 2) .... (17,381) -- (20,396) -- (8) --
Adjustments to maintain reserves .............. (117) -- 3,216 -- 48 --
------------ ----- ----------- ----- ---------- -----
Net equity transactions ................... 50,327,961 -- 59,482,518 -- 4,166,457 --
------------ ----- ----------- ----- ---------- -----
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 50,946,288 -- 66,560,394 -- 4,407,807 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 1,414,111 -- 230,766 -- -- --
------------ ----- ----------- ----- ---------- -----
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 52,360,399 -- 66,791,160 -- 4,407,807 --
============ ===== =========== ===== ========== =====
ASSET MANAGER:
GROWTH PORTFOLIO
---------------------
1997 1996
---------- -----
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- --
Mortality, expense and administration
charges (note 2) ............................ (13,871) --
---------- -----
Net investment activity ..................... (13,871) --
---------- -----
Proceeds from mutual fund shares sold ......... 45,288 --
Cost of mutual fund shares sold ............... (45,581) --
---------- -----
Realized gain (loss) on investments ......... (293) --
Change in unrealized gain (loss) on investments 322,792 --
---------- -----
Net gain (loss) on investments .............. 322,499 --
---------- -----
Reinvested capital gains ...................... 620 --
---------- -----
Net increase (decrease) in contract owners'
equity resulting from operations ........ 309,248 --
---------- -----
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 4,396,489 --
Redemptions ................................... (40,623) --
Annual contract maintenance charge (note 2) ... (17) --
Contingent deferred sales charges (note 2) .... (1,500) --
Adjustments to maintain reserves .............. 13 --
---------- -----
Net equity transactions ................... 4,354,362 --
---------- -----
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 4,663,610 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... -- --
---------- -----
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 4,663,610 --
========== =====
</TABLE>
9
<PAGE> 9
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTMENT GRADE
CONTRAFUND PORTFOLIO INDEX 500 PORTFOLIO BOND PORTFOLIO
----------------------- ---------------------- ----------------------
1997 1996 1997 1996 1997 1996
------------ ----- ----------- ----- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 24,653 -- 9,636 -- 21,628 --
Mortality, expense and administration
charges (note 2) ............................ (78,797) -- (36,458) -- (93,674) --
------------ ----- ----------- ----- ----------- -----
Net investment activity ..................... (54,144) -- (26,822) -- (72,046) --
------------ ----- ----------- ----- ----------- -----
Proceeds from mutual fund shares sold ......... 13,865 -- 316,941 -- 362,597 --
Cost of mutual fund shares sold ............... (13,937) -- (335,624) -- (383,824) --
------------ ----- ----------- ----- ----------- -----
Realized gain (loss) on investments ......... (72) -- (18,683) -- (21,227) --
Change in unrealized gain (loss) on investments 1,843,950 -- 1,079,475 -- 628,526 --
------------ ----- ----------- ----- ----------- -----
Net gain (loss) on investments .............. 1,843,878 -- 1,060,792 -- 607,299 --
------------ ----- ----------- ----- ----------- -----
Reinvested capital gains ...................... 65,154 -- 19,553 -- -- --
------------ ----- ----------- ----- ----------- -----
Net increase (decrease) in contract owners'
equity resulting from operations ........ 1,854,888 -- 1,053,523 -- 535,253 --
------------ ----- ----------- ----- ----------- -----
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 24,913,226 -- 12,958,187 -- 24,345,353 --
Redemptions ................................... (201,459) -- (164,419) -- (639,358) --
Annual contract maintenance charge (note 2) ... (186) -- (60) -- (546) --
Contingent deferred sales charges (note 2) .... (3,922) -- (8,011) -- (10,143) --
Adjustments to maintain reserves .............. (15,176) -- (941) -- 154 --
------------ ----- ----------- ----- ----------- -----
Net equity transactions ................... 24,692,483 -- 12,784,756 -- 23,695,460 --
------------ ----- ----------- ----- ----------- -----
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 26,547,371 -- 13,838,279 -- 24,230,713 --
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... -- -- -- -- 97,975 --
------------ ----- ----------- ----- ----------- -----
CONTRACT OWNERS' EQUITY END OF PERIOD ........... $ 26,547,371 -- 13,838,279 -- 24,328,688 --
============ ===== =========== ===== =========== =====
<CAPTION>
BALANCED PORTFOLIO
-----------------------------
1997 1996
------------ -----------
<S> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 2,651,503 --
Mortality, expense and administration
charges (note 2) ............................ (786,229) (417,627)
------------ -----------
Net investment activity ..................... 1,865,274 (417,627)
------------ -----------
Proceeds from mutual fund shares sold ......... 2,206,323 1,690
Cost of mutual fund shares sold ............... (1,800,991) (1,574)
------------ -----------
Realized gain (loss) on investments ......... 405,332 116
Change in unrealized gain (loss) on investments 12,049,276 355,382
------------ -----------
Net gain (loss) on investments .............. 12,454,608 355,498
------------ -----------
Reinvested capital gains ...................... -- 218,962
------------ -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 14,319,882 156,833
------------ -----------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds ..... 11,520,144 34,235,080
Redemptions ................................... (2,425,691) (1,087,885)
Annual contract maintenance charge (note 2) ... (6,742) (2,398)
Contingent deferred sales charges (note 2) .... (47,890) (17,768)
Adjustments to maintain reserves .............. 819 4,183
------------ -----------
Net equity transactions ................... 9,040,640 33,131,212
------------ -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ........... 23,360,522 33,288,045
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 103,152,198 43,152,116
------------ -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ........... 126,512,720 76,440,161
============ ===========
</TABLE>
10
<PAGE> 10
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
GROWTH AND INCOME GROWTH OPPORTUNITIES
PORTFOLIO PORTFOLIO
------------------------ ------------------------------
1997 1996 1997 1996
------------ ------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ......................... $ -- -- 6,335,089 --
Mortality, expense and administration
charges (note 2) ........................... (28,746) -- (3,005,883) (1,573,274)
------------ ------ ------------ ------------
Net investment activity .................... (28,746) -- 3,329,206 (1,573,274)
------------ ------ ------------ ------------
Proceeds from mutual fund shares sold ........ 29,617 -- 5,248,684 1,419,284
Cost of mutual fund shares sold .............. (26,876) -- (3,559,995) (1,113,034)
------------ ------ ------------ ------------
Realized gain (loss) on investments ........ 2,741 -- 1,688,689 306,250
Change in unrealized gain (loss) on investment 966,625 -- 46,351,344 12,501,608
------------ ------ ------------ ------------
Net gain (loss) on investments ............. 969,366 -- 48,040,033 12,807,858
------------ ------ ------------ ------------
Reinvested capital gains ..................... -- -- 8,869,124 705,098
------------ ------ ------------ ------------
Net increase (decrease) in contract owners
equity resulting from operations ....... 940,620 -- 60,238,363 11,939,682
------------ ------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from contract
owners - net of transfers between funds .... 10,669,978 -- 67,978,142 113,556,344
Redemptions .................................. (75,728) -- (9,083,029) (2,926,102)
Annual contract maintenance charge (note 2) .. (25) -- (33,465) (12,797)
Contingent deferred sales charges (note 2) ... (2,274) -- (220,517) (38,797)
Adjustments to maintain reserves ............. 80 -- 3,359 26,334
------------ ------ ------------ ------------
Net equity transactions .................. 10,592,031 -- 58,644,490 110,604,982
------------ ------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 11,532,651 -- 118,882,853 122,544,664
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .... -- -- 383,098,230 164,275,009
------------ ------ ------------ ------------
CONTRACT OWNERS' EQUITY END OF PERIOD .......... $ 11,532,651 -- 501,981,083 286,819,673
============ ====== ============ ============
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 11
NATIONWIDE FIDELITY ADVISOR VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
(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:
Funds of Fidelity Advisor Annuity Fund (effective January 20,
1997, the following funds are no longer available);
Fidelity Advisor Annuity Government Investment Fund
Fidelity Advisor Annuity High Yield Fund
Fidelity Advisor Annuity Money Market Fund
Fidelity Advisor Annuity Overseas Fund
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio
Fidelity VIP - Growth Portfolio
Fidelity VIP - High Income Portfolio
Fidelity VIP - Money Market Portfolio
Fidelity VIP - Overseas Portfolio
Portfolios of the Fidelity Variable Insurance Products Funds
II(Fidelity VIP-II);
Fidelity VIP-II - Asset Manager Portfolio
Fidelity VIP-II - Asset Manager: Growth Portfolio
Fidelity VIP-II - Contrafund Portfolio
Fidelity VIP-II - Index 500 Portfolio
Fidelity VIP-II - Investment Grade Bond Portfolio
Portfolios of the Fidelity Variable Insurance Products Funds
III(Fidelity VIP-III);
Fidelity VIP-III - Balanced Portfolio
(formerly Fidelity Advisor Annuity Income & Growth Fund)
Fidelity VIP-III - Growth and Income Portfolio
Fidelity VIP-III - Growth Opportunities Portfolio
(formerly Fidelity Advisor Annuity Growth Opportunities Fund)
At June 30, 1997, except as noted, 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.
12
<PAGE> 12
(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 June 30, 1997. 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.
(f) Reclassifications
Certain 1996 amounts have been reclassified to conform with the
current year presentation.
(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 contract 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.
13
<PAGE> 13
[NATIONWIDE LOGO]
[FIDELITY INVESTMENTS(R) 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.
APO-2929-D (6/97)
