Understanding the Types of Mutual Funds

Your investment professional can help you select funds that align with your specific circumstances, goals, time frame and risk tolerance. The information below will help you understand the various kinds of mutual funds Nationwide offers.

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

Target Destination funds invest in a professionally selected mix of asset classes tailored for investors with a time-driven investment goal for those who expect to retire on a certain date and begin withdrawing from the fund.

More about Nationwide Target Destination funds

Alternatives Allocation Fund

This fund provides an alternative to more traditional asset classes, along with different risks and returns. This professionally selected 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

These funds are named for their level of risk, from conservative to aggressive. 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, such as the S&P 500, 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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Understanding the Types of Mutual Funds

Nationwide Target Destination Funds

Alternatives Allocation Fund

Nationwide Investor Destinations Funds

Equity funds

Fixed-income funds

Index funds

Leave Money to a Charity

Individual Retirement Accounts

Find an Investment Professional

Work With an Investment Professional

Retirement Planning Guide