Principal Risks: Equity investments are subject to stock market risk and portfolio turnover risk. Growth funds may underperform other funds that use different investing styles.
Asset allocation is the process of spreading assets across several different investment styles and asset classes. The Fund is designed to provide asset allocation across several types of alternative investments in an attempt to achieve investment performance that may have a low correlation to the performance of more traditional investments. The Fund consists of separate sleeves to represent the investments in each of the different asset classes.
Each sleeve invests in securities and derivatives with the goal of matching the investment characteristics and performance of a specified asset class benchmark index. Instead of investing directly in the securities included in its respective index, each of the international bonds, high-yield bonds, emerging market bonds and emerging market stocks sleeves may invest in derivatives as a substitute for investing in such securities in an attempt to synthetically replicate the investment characteristics and performance of the sleeve’s benchmark index.
Instead of investing directly in physical commodities, substantially all of the Fund’s exposures to commodities will be undertaken by investing in commodity-linked notes, which are derivatives. Investing in commodities and commodities-linked investments may expose the Fund to increased volatility and decreased liquidity due to several factors, including changes in supply-and-demand relationships; weather; agriculture; disease; fiscal and exchange control programs; and international economic, political, military and regulatory developments.
Derivatives can increase losses and reduce opportunities for gains when the security or commodity prices, currency values, index values, interest rates or other such measures underlying the instruments change in unexpected ways. Derivatives also present default risks if the counterparty to a derivatives contract fails to fulfill its obligations to the Fund.
In addition, the Fund is subject to specific investment risks such as those associated with: (i) bonds and highyield bonds, (ii) international and emerging market securities, and (iii) real estate investment trusts (REITs). The Fund is a nondiversified fund, which means that a relatively high percentage of the Fund’s assets may be invested in a limited number of issuers.
The Nationwide Alternatives Allocation Fund is subject to a number of risks and may not be suitable for all investors. The Fund is not intended to serve as a complete investment program. There is no assurance that the investment objective of the Fund will be achieved.