Selecting Mutual Funds
How do you choose the types of mutual funds that fit your investment needs? Your investment professional can help you select funds that align with your specific circumstances, goals, time frame and risk tolerance.
We’ve created this guide to help you understand the various kinds of mutual funds we offer.
Before buying shares of a mutual fund, carefully read the prospectus and other materials about the fund. The prospectus provides information about the fund’s objective, principal strategy, investment risks, fees, expenses and other details.
Investing in mutual funds involves risk, including the possible loss of principal. Investors’ shares, when redeemed, may be worth more or less than their original cost.
Nationwide Target Destination Funds
These target date funds are designed to help you prepare for retirement or another time-driven investment goal. Buying shares in a single target-date fund lets you invest in a broadly diversified portfolio of underlying mutual funds.
Each fund invests in a professionally selected mix of asset classes tailored for investors who expect to retire on a certain date and begin withdrawing from the fund. The target date -- designated in the fund’s name -- is assumed to be age 65; in the case of the Nationwide Retirement Income Fund, age 85. The target date is the approximate date when an investor may choose to retire and/or begin withdrawing from the Fund.
Depending on its proximity to the target date, the fund invests in different asset classes that may emphasize growth, income and/or preservation of capital. Over time, the fund’s asset mix will become more conservative -- with greater emphasis on investments that provide for income and capital preservation, and less on investments offering growth potential. The fund’s principal value is not guaranteed at any time, including at the target date mentioned in the Fund’s name.
Learn more about Target Destination Funds.
Alternatives Allocation Fund
As the name implies, the alternatives allocation fund provides an alternative to more traditional asset classes, along with different risks and returns. Professionally selected, the mix of investments may include Treasury Inflation Protected Securities (TIPS), international bonds, high-yield bonds, emerging market bonds, emerging market stocks, commodities and global real estate stocks.
Nationwide Investor Destinations Funds
This series of funds is designated with an overall investment risk indicator in each fund’s name. They invest in a broadly diversified portfolio of underlying index funds designed to fit the investor's particular risk profile and investment goal.
Equity Funds
These funds invest in equity securities, such as common and preferred stock; securities that can be converted into common stock; or securities and other investments with prices linked to the value of common stock.
Some funds invest in securities from small, undiscovered, emerging
growth companies –– a strategy that can be riskier than investing in
established companies but may potentially provide higher returns. Other
equity funds invest in large well-established companies that offer
long-term growth potential with less risk potential, although growth is
never guaranteed.
Fixed-income Funds
These funds invest in securities, such as bonds and other debt in which the issuer is obliged to pay a set interest rate or dividend at specified times.
Index Funds
Index funds seek to approximate the returns of a specific market index by investing in all or a representative group of the same securities. Index funds typically charge lower expenses than actively managed funds. A description of an index fund’s market index is included in the fund prospectus.
Important Disclosures
Investors should carefully consider a fund's (and each of its underlying funds') investment objectives, risks, fees, charges and expenses before investing any money. To obtain this and other information on Nationwide Funds, please call 1-800-848-0920 to request a summary prospectus and/or a prospectus, or download a summary prospectus and/or a prospectus at nationwide.com/mutualfunds. Please read it carefully before investing any money.
The Nationwide Target Destination Funds and the Nationwide Investor Destinations Funds are designed to provide diversification across a variety of asset classes, primarily by investing in underlying funds. Therefore, in addition to the expenses of the Nationwide Target Destination Funds or the Nationwide Investor Destinations Funds, each investor is indirectly paying a proportionate share of the applicable fees and expenses of the underlying funds.
In general, a Nationwide Target Destination Fund with a later target
date is expected to be more volatile, and thus riskier, because of its
greater allocation to equity securities than a fund with an earlier
target date. A fund at its target date through the next 20 years is
expected to be less volatile than a fund in its “pre-target date” stage.
The Nationwide Retirement Income fund, which is the vehicle intended to
serve investors who are approximately 20 years beyond a fund's target
date, is expected to be the least volatile of the funds due to the
Retirement Income Fund’s further reduced exposure to equity
securities.
Asset allocation is the process of spreading assets across several
different investment styles and asset classes. The purpose is to
potentially reduce long-term risk and capture potential profits across
various asset classes.
There is no assurance that the investment objective of any fund (or that of any underlying fund) will be achieved nor that a diversified portfolio will produce better results than a non-diversified portfolio. Diversification does not guarantee returns or insulate an investor from potential losses, including the possible loss of principal.
Each fund is subject to different levels of risk, based on the types and sizes of its underlying asset class allocations and its allocation strategy. In addition, each fund's underlying funds may be subject to specific investment risks such as those associated with: bonds and short-term instruments, small companies, mid-sized companies, international securities, real estate investment trusts (REITs) and initial public offerings (IPOs).
Because a fund’s allocation may not match a particular investor’s retirement goal and an investor may have different retirement needs than anticipated, there is no guarantee that an investor will have the desired level of retirement assets available. Also, an investor may have different retirement needs than the allocation model anticipates.
An alternative allocation fund is typically nondiversified, which means that a relatively high percentage of the fund's assets may be invested in a limited number of issuers.
Alternatives strategies and asset classes are not suitable for all
investors. Many alternative strategies use sophisticated and aggressive
investment techniques such as leveraging, short selling and derivatives.
Leveraging creates an opportunity for greater total return, but creates
special risks. Leveraging may exaggerate changes in performance, either
positively or negatively. The use of short selling involves increased
risks and costs, including paying more for a security than received from
its sale. Stocks sold short have the risk of unlimited losses. The use of
derivatives such as futures, options and swap agreements may expose an
investment to additional risks than investing directly in the securities
underlying those derivatives. Additionally, certain alternative
strategies tied to hard assets such as commodities, currencies and real
estate, may be subject to greater volatility as they may be affected by
overall market movements, changes in interest rates or factors affecting
a particular industry, commodity or currency, such as weather, disease,
embargoes, acts of war or terrorism, and international economic,
political and regulatory developments. No investment strategy can
guarantee a return. Additionally, an investor could lose all or a
substantial amount of their investment.
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