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Key features

  • The Fund offers a flexible, multisector approach to fixed income investing that quickly adapts to shifting market and economic conditions
  • The Fund employs a tactical sector rotation that seeks the best positioning within the current environment with low correlation to traditional long-only fixed income and equity indices
  • The Fund can help hedge unwanted risks, is interest rate independent and offers a lower duration profile — typically less than 2 years

Q: How can I add the NVIT Strategic Income Fund to my portfolio?

A: The Fund is a Nationwide Variable Insurance Trust (NVIT) fund available within certain Nationwide® variable annuities and variable universal life products. Visit our VIT fund research tool for more details.

Q: What is the Fund’s investment objective and philosophy?

A: The investment seeks to provide above average total return over a market cycle of 3 to 5 years. Under normal circumstances, the Fund invests at least 80% of its net assets in different types of fixed-income securities, with few limitations as to credit quality, geography, maturity or sector. It may invest in U.S. government securities and foreign government bonds, as well as U.S. and foreign corporate bonds and debentures, asset-backed securities, mortgage-backed securities and convertible bonds.

Q: What is the Fund’s investment management strategy?

A: The Fund is designed to deliver high total returns through active management of sector allocation and security selection, while also managing macro factor exposures such as duration, yield curve, spread risk and overall volatility. As the Fund’s focus is alpha generation through relative value credit investing, the targeted composition of excess returns is allocated such that 75% to 90% is to be attributable to sector allocation and security selection and the remaining 10% to 25% to management of macro factor exposures. The strategy seeks a low correlation to traditional long-only fixed-income and equity indexes, and as such, is intended to be a portfolio diversifier.

Q: In what type of market(s) would you expect the Fund to outperform?

A: The Fund is designed to perform well across various market environments. However, it tends to benefit most when credit spreads are narrowing — meaning corporate and structured credit bonds are gaining value relative to Treasurys. The team has strong expertise in evaluating corporate and structured credit risks, which often leads to a focus on these areas. Due to its flexibility, the Fund can invest in both investment-grade and high-yield bonds, allowing it to take advantage of opportunities when spreads are stable or tightening. This adaptability also supports both aggressive and defensive positioning, helping the Fund navigate changing market conditions while maintaining broad diversification.

Q: What is the Fund’s process for stock selection?

A: In constructing a portfolio, the investment manager considers diversification across sectors, generally consisting of 5 to 15 themes at any given time. The investment team considers domestic and global allocations to higher-yielding investment opportunities within the corporate credit (U.S. and non-U.S.; investment grade and high yield), securitized credit (ABS, CMBS, RMBS, CLO, CRT; IG and below IG), structured credit (agency MBS, mortgage derivatives, prepayment trades), sovereign credit (DM and EM) and bank loan markets.

Q: What is the Fund’s risk management process?

A: In managing the Fund, the investment manager evaluates fundamental market factors such as yield and credit quality differences among bonds, as well as demand and supply trends. The investment decisions are based on technical factors such as price momentum, market sentiment and supply or demand imbalances. Interest rate risk is managed to a shorter duration profile (between 1 and 3 years), with a net spread duration ranging between 3 to 8 years, depending on the relative attractiveness and strength of the credit environment. Furthermore, the strategy invests across the universe of investment-grade and high-yield spread products with average credit qualities ranging between BBB and B. The Fund may engage in frequent and active trading of portfolio securities.
If you have questions about the NVIT Strategic Income Fund or want to review other VIT funds, call 1-800-321-6064 or visit our fund research tool.

This material is not a recommendation to buy or sell a financial product or to adopt an investment strategy. Investors should discuss their specific situation with their financial professional.

Variable products are sold by prospectus. Both the product and underlying fund prospectuses can be obtained by visiting Nationwide.com/prospectus or by calling 1-800-848-6331. Before investing, carefully read and consider the fund’s investment objectives, risks, charges, expenses, and other important information contained in this and the underlying funds’ prospectuses.

NVIT Funds are not sold to individual investors. These investment options are underlying subaccounts and cannot be purchased directly by the public. They are available only through variable products issued by life insurance companies. There is no assurance that the investment objective of any fund (or that of any underlying fund) will be achieved or that a diversified portfolio will produce better results than a nondiversified portfolio. Diversification does not guarantee returns or insulate an investor from potential losses, including the possible loss of principal. When evaluating the purchase of a variable annuity product, your clients should be aware that variable annuity products are long-term investment vehicles designed for retirement purposes and will fluctuate in value; and investing involves market risk, including possible loss of principal.

KEY RISKS: The Fund is subject to the risks of investing in fixed-income securities (including high-yield bonds), including default risk and interest rate risk. Funds that invest in high-yield securities are subject to greater default risk, liquidity risk, and price fluctuations than funds that invest in higher-quality securities. The prices of high-yield bonds tend to be more sensitive to adverse economic and business conditions than are higher-rated corporate bonds. Increased volatility may reduce the market value of high-yield bonds. They are also subject to the claims-paying ability of the issuing company. The Fund may invest in more-aggressive investments such as derivatives (which create investment leverage and are highly volatile). The Fund also is subject to the risks of investing in foreign securities (which may be more volatile, harder to price and less liquid than U.S. securities). The Fund may invest in sovereign debt (a governmental entity may delay or refuse to pay interest or repay principal). The Fund may concentrate on specific countries, subjecting it to greater volatility than that of other mutual funds. Please refer to the most recent prospectus for more detailed information.

Bloomberg US Aggregate Bond Index: An unmanaged, market value-weighted index of U.S. dollar-denominated, investment-grade, fixed-rate, taxable debt issues, which includes Treasuries, government-related and corporate securities, mortgage -backed securities (agency fixed-rate and hybrid adjustable -rate mortgage pass-throughs), asset-backed securities and commercial mortgage-backed securities (agency and non-agency). Bloomberg® and its indexes are service marks of Bloomberg Finance L.P. and its affiliates including Bloomberg Index Services Limited, the administrator of the index, and have been licensed for use for certain purposes by Nationwide. Bloomberg is not affiliated with Nationwide, and Bloomberg does not approve, endorse, review or recommend this product. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any date or information relating to this product.

Variable annuities are issued by Nationwide Life Insurance Company, Columbus, Ohio. The general distributor for variable products is Nationwide Investment Services Corporation (NISC), member FINRA, Columbus, Ohio. NVIT Funds distributed by Nationwide Fund Distributors LLC (NFD), member FINRA, Columbus, Ohio. NISC and NFD are not affiliated with any subadviser contracted by Nationwide Fund Advisors, with the exception of Nationwide Asset Management, LLC, and are not affiliated with Morningstar, Inc.

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