October 27, 2008

As the financial market crisis continues, investors have been expressing concerns. I want to address some of these concerns and to let you know what we at Nationwide Funds Group^SM (NFG) are doing to weather this storm.

First, it is important to remember that extreme fluctuations in the financial markets are not unprecedented. In fact, I suggest that what we are seeing is a return of the time-honored principle that risk and return are linked. During recent years, amid a long period of steady growth and low volatility, many investors seem to have forgotten that truism. Market volatility, at times severe, has always been part of the complete investment picture. Over time, markets eventually recover and maintaining a measured, diversified approach is a prudent investment strategy to follow.

Second, in looking at investor behavior, I am struck by the risks incurred by acting impulsively. We at NFG strongly believe that now, more than ever, is the time to consider carefully your long-term investment plan. I do not mean to minimize investors‘ concerns and fears — especially those that investors nearing retirement are experiencing. However, it is important for all shareholders to consider the adverse consequences of precipitously withdrawing their funds from the market, thus permanently locking in the losses they have recently suffered.

Now is the time to consider reviewing and evaluating your investment objectives, your tolerance for risk and your time horizon. If you are unsure about whether to maintain your assets in their current investments or to change course, I encourage you to seek the advice of a professional financial advisor to help you make these decisions and plan for the long term. If you do not have an advisor, I encourage you to find one. Ask trusted friends or colleagues if they know someone they could recommend. Ask for a referral at your bank, contact the Financial Planning Association (www.fpanet.org) to obtain a planner, or go to www.nationwide.com, which will help you to locate a Nationwide^® investment professional within your area that may be able to counsel you.

We at NFG are regularly and rigorously monitoring the subadvisers who manage assets on behalf of Nationwide Funds^® and our shareholders. We always work closely with our subadvisers and during the past several weeks we have intensified our level of involvement. We will continue to conduct this added level of dialogue during the market crisis as we strive to make certain that our subadvisers are managing risk in a manner appropriate to their investment mandates.

In the coming weeks and months, I will continue to present NFG‘s perspective on market events and provide you with information that I believe will be helpful to you. If you have specific questions, please call Shareholder Services 1-800-848-0920, or contact us at:

Nationwide Funds
P.O. Box 182205
Columbus, OH 43218-2205

My colleagues and I thank you for your business and your continued confidence in NFG.

Sincerely,

Michael S. Spangler
President
Nationwide Funds Group

Nationwide Funds Group (NFG) is the mutual fund arm of Nationwide Financial Services, Inc. (NYSE: NFS). Based in Conshohocken, Pa., a suburb of Philadelphia, NFG comprises Nationwide Fund Advisors, Nationwide Fund Distributors LLC and Nationwide Fund Management LLC. Together they provide advisory, distribution and administration services, respectively, to the Nationwide Funds. Nationwide Life Insurance Company is an affiliate of NFS. NFS is an affiliate of Nationwide Mutual Insurance Company.

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