Fund Semi-Annual Report
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Semiannual Report June 30, 2019 (Unaudited) NVIT S&P 500 Index Fund Contents Message to Investors 1 Fund Overview 3 Financial Statements 13 Notes to Financial Statements 19 Supplemental Information 33 Management Information 36 Market Index Definitions 41 SAR-SPX 8/19 Nationwide Funds® Commentary in this report is provided by the portfolio manager(s) of each Fund as of the date of this report and is subject to change at any time based on market or other conditions. Third-party information has been obtained from sources that Nationwide Fund Advisors (NFA), the investment adviser to the Funds, deems reliable. Portfolio composition is accurate as of the date of this report and is subject to change at any time and without notice. NFA, one of its affiliated advisers or its employees may hold a position in the securities named in this report. This report and the holdings provided are for informational purposes only and are not intended to be relied on as investment advice. Investors should work with their financial professional to discuss their specific situation. Statement Regarding Availability of Quarterly Portfolio Holdings The Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT. Additionally, the Trust files a schedule of portfolio holdings monthly for the NVIT Government Money Market Fund on Form N-MFP. Forms N-PORT and Forms N-MFP are available on the SEC’s website at sec.gov. Forms N-PORT and Forms N-MFP may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. The Trust also makes this information available to investors on nationwide.com/mutualfunds or upon request without charge. Statement Regarding Availability of Proxy Voting Record Information regarding how the Funds voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 800-848-0920, and on the SEC’s website at sec.gov. Before purchasing a variable annuity, you should carefully consider the investment objectives, risks, charges and expenses of the annuity and its underlying investment options. The product prospectus and underlying fund prospectuses contain this and other important information. Underlying fund prospectuses can be obtained from your investment professional or by contacting Nationwide at 800-848-6331. Read the prospectus carefully before you make a purchase. NVIT Funds are not sold to individual investors. These investment options are underlying subaccounts and cannot be purchased directly by the public. They are only available through variable products issued by life insurance companies. Nationwide Funds Group (NFG) comprises Nationwide Fund Advisors, Nationwide Fund Distributors LLC and Nationwide Fund Management LLC. Together they provide advisory, distribution and administration services, respectively, to Nationwide Funds. Nationwide Fund Advisors (NFA) is the investment adviser to Nationwide Funds. Variable products are issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation (NISC), member FINRA. Nationwide 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 (NFA), with the exception of Nationwide Asset Management, LLC (NWAM). Nationwide, the Nationwide N and Eagle, and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. ©2019 Message to Investors Dear Investor, for federal funds rate hikes faded. Global markets also participated in the rally, as the MSCI EAFE® In the first half of this year we experienced the Index (MSCI EAFE) returned 14.0% for the largest equity market increases since 1998. reporting period, while the MSCI Emerging Although the U.S. market faced significant Markets® Index returned 10.6%. volatility at the end of 2018, producing a negative return for the first time since the global financial U.S. economic activity remains relatively crisis in 2008, the U.S. market has rallied sharply, supportive for equity market returns. reaching all-time highs while generating strong results. Economic growth as measured by U.S. gross The economic expansion is the longest on record, domestic product (GDP) continued in the current but progress has been muted. Although key cycle despite gathering headwinds, with the first indicators of economic health have weakened, the quarter of 2019 at 3.1% and consensus estimates probability of a recession occurring this year is for the second quarter at 1.8%. Corporate profit likely to remain low. This ongoing relative growth decelerated from the 21% growth rate of strength in the U.S. economy is likely to sustain 2018, with growth in the first quarter of 2019 the equity bull market despite rising risks. coming in flat due to contracting profit margins and sluggish global revenues. For the full year of The impact of higher tariffs on select companies 2019, earnings are expected to grow at 3% on and sectors is likely to prove challenging as the revenue growth of 5% before rebounding to United States and China continue to hammer out double-digit earnings growth next year. All a potential trade deal. In addition, Brexit still factors considered, the economic and earnings haunts the geopolitical landscape, and the yield environments are positioned to provide a healthy curve* remains extremely flat. backdrop for equity returns. These risks combined with slowing growth In mid-2019, the Fed reversed course after having indicate that we may be closer to the end of the followed a steady path of hikes to the federal expansion; however, opportunities for funds rate. At the December 2018 meeting, the appreciation and returns likely still exist for Federal Open Market Committee (FOMC) hiked prudent investors. therateforafourthtimeandprovidedguidance for two additional hikes for 2019. By the June 2019 Economic Review meeting, however, the committee changed During the semiannual reporting period ended guidance to an easing bias due to uncertain June 30, 2019, equity markets were sharply economic data and low inflation. This incremental higher amid a volatile period, as investors were dovishness led to a dramatic drop in interest rates encouraged by an incrementally dovish U.S. across the yield curve, with the 10-year yield falling Federal Reserve, which drove markets to all-time from 2.68% to 2.00% during the reporting period, highs. Markets entered the period in an uncertain and the 2-year yield dropping from 2.50% to 1.73%. condition, with the S&P 500® Index (S&P 500) registering -13.7% for the fourth quarter of 2018, Risk assets were universally higher during the the worst quarter in seven years. Conditions six-month reporting period, led by strength in the improved immediately in 2019, with a 13.5% S&P equity market. Markets declined briefly in May on 500 return in the first calendar quarter, the best growing concerns over a trade war with China, quarterly performance since the financial crisis in then recovered in June to all-time highs. Growth 2008. The 18.5% S&P 500 return for the stocks substantially outperformed value, while semiannual reporting period marked the best first large-capitalization stocks beat small-cap stocks. half of a year since 1997. Fixed-income returns Leading sectors for the period included were broadly higher on falling interest rates and Information Technology, Consumer Discretionary tightening credit spreads as demand for yield and Communication Services, while Energy, assets continued to be strong and expectations Health Care and Materials lagged. 1 Message to Investors (cont.) International stocks rallied during the first half of strategy. We urge investors to seek investments 2019. based on a sound asset allocation strategy, a long-term perspective and regular conversations International stocks rallied sharply during the with a financial advisor. reporting period, reversing a trend for most of 2018, when developed and emerging market At Nationwide, we continue to take a steady indexes steadily underperformed the S&P 500. approach to seeking long-term growth. We Investors initially were concerned that the remain confident in our ability to help investors synchronized global growth story was cracking navigate the markets for years to come. Thank due to disappointing economic growth and the you for investing with us. We deeply value your prospect for trade tariffs. Markets recovered on trust. stabilizing economic data and accommodative monetary policy by central banks across the Sincerely, globe. The performance of fixed-income markets was broadly higher for the reporting period as falling interest rates and tightening credit spreads drove performance. The yield curve was quite flat by Michael S. Spangler historic standards, with the spread between the President & CEO 10-year and 2-year yields at 0.27% at period end. Nationwide Variable Insurance Trust The improving backdrop led to a substantial tightening of credit spreads, led by high yield. * A yield curve is a plotted graph line showing the interest rates of bonds, at a set point in time, that have Semiannual Total Return equal credit quality but different maturity dates. Index (as of June 30,