The current events unfolding in the financial markets and political arena have unsettled many of us. While the current level of market volatility is unnerving, the fear that has gripped individuals and has led many to re-think and even abandon their savings and investing plans is equally troubling. Long-term investment decisions based on short-term market events and emotions may be destructive to investment portfolios and threaten your financial goals.

We remain committed to long-term investment solutions and are confident of their ability to meet financial goals through most market cycles. Proper asset allocation, diversification of asset classes, experienced managers and a long-term commitment may help weather the storms of volatility.

Money Market Funds Stability. Much has been reported about the current risks to money market mutual funds and the U.S. Treasury Department's new guarantee program for these funds. The details of the U.S. Treasury's program were announced on Monday, September 29th. On October 3, 2008, the Nationwide Funds^® Board of Trustees approved participation in this program by the Nationwide Money Market Fund and two funds within the Nationwide Variable Insurance Trust: NVIT Money Market Fund and NVIT Money Market Fund II. (click here for details.)

We have great conviction and focus on the following fundamental investment principles:

Diversification. Portfolios that are balanced and diversified may weather market volatility more effectively. Allocating your investments across different asset classes based on a variety of industries in different geographical locations as well as different investing styles can be an effective tool to mitigate risk in pursuit of return.

Long-term commitment to a financial plan. Creating a long-term plan that takes your specific needs, risk tolerance and time horizon into consideration is a key component of investing. It is important that you know and understand that market risk, inflation risk and longevity risk, to name a few, may have a potential impact on your financial goals and should be considered. Also, focusing on your long-term financial goals may help minimize the impact of day-to-day price fluctuations.

A consistent investment approach. At Nationwide Funds Group, we partner with a select group of investment professionals, each with a clearly articulated, consistent investment approach. As a manager-of-managers, we select experienced money managers that have shown the ability to deliver performance results through many different market conditions. Nationwide Fund Advisors, the investment advisor to the Nationwide Funds, closely monitors the operations and performance of the Funds and the Funds' subadvisers. This monitoring process is ongoing and we have been in continuous contact with our managers throughout this crisis.

Markets are cyclical. Experience teaches investors that most financial and economic markets are cyclical. We live in an environment of constant news and overwrought analysis. Many market watchers and pundits may be inclined to speculate that the current volatility, albeit painful, is ushering in a “new era” and that “things are different this time.” This is seldom the case. As a matter of fact, this type of rationalization may lead to ill-timed investment decisions that may derail an investment plan. Experience has shown that you may be rewarded in the long-term for your perseverance in sticking with a sound investment strategy. If you do not have a financial plan, now may be the time to seek a professional's help. Find an advisor who thinks broadly about all of your financial needs and will speak candidly about both your current obligations and your long-term goals.

Our parent company, Nationwide Financial Services, Inc., remains financially sound. No matter what the market brings, we will continue to provide you with a high level of integrity and stewardship. Nationwide Funds Group remains disciplined in its approach and does not succumb to an emotional assessment of the current financial crisis. We thank you for your continued support and will work diligently to keep your trust.

If you have questions about your funds, please contact us by calling 1-800-848-0920 or writing us at:

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

Sincerely,

Michael S. Spangler
President
Nationwide Funds Group

Except as stated above, an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the money market.

There is no assurance that a diversified portfolio will produce better results than a nondiversified portfolio. Asset allocation does not ensure a profit nor protect against losses.

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.

The Nationwide Variable Insurance Trust Funds (NVIT) are not publicly traded mutual funds and are not available directly for purchase by the general public. They are only available through variable product policies issued by life insurance companies.

Variable annuity and variable life insurance 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, member FINRA. In MI only: Nationwide Investment Svcs. Corporation.