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File No. 333-
As filed September 22, 2003
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 x
Pre-Effective Amendment No. ¨
Post-Effective Amendment No. ¨
(Check appropriate box or boxes)
Gartmore Mutual Funds
(Exact Name of Registrant as Specified in Charter)
(484) 530-1300
(Area Code and Telephone Number)
1200 River Road
Conshohocken, Pennsylvania 19428
Address of Principal Executive Offices:
(Number, Street, City, State, Zip Code)
Elizabeth A. Davin, Esq.
One Nationwide Plaza
Columbus, Ohio 43215
Name and Address of Agent for Service:
(Number and Street) (City) (State) (Zip Code)
Copies to:
Kristin H. Ives, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement becomes effective
under the Securities Act of 1933, as amended.
It is proposed that this filing will become effective on October 22, 2003, pursuant to Rule 488.
Title of the securities being registered: Class A, Class B, Class C and Institutional Service Class shares of beneficial interest, without par value, of the Gartmore Growth Fund. No filing fee is due because the Registrant is relying on Section 24(f) of the Investment Company Act of 1940, as amended.
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IMPORTANT NOTICE: PLEASE COMPLETE THE ENCLOSED PROXY CARD/VOTING INSTRUCTION FORM AND RETURN IT AS SOON AS POSSIBLE.
GARTMORE MUTUAL FUNDS
NATIONWIDE LARGE CAP GROWTH FUND
GARTMORE GROWTH FUND
1200 RIVER ROAD
CONSHOHOCKEN, PENNSYLVANIA 19428
October 22, 2003
Dear Valued Shareholder:
Enclosed is a Notice of a Special Meeting of Shareholders (the “Meeting”) of the Nationwide Large Cap Growth Fund and the Gartmore Growth Fund (each a “Fund,” and, collectively, the “Funds”) series of Gartmore Mutual Funds, an Ohio business trust (the “Trust”). The Meeting is scheduled for December 12, 2003, at 9:00 a.m., Eastern time, at 1200 River Road, Conshohocken, Pennsylvania 19428. The accompanying materials describe an important proposal that may affect the future of your Fund(s), and also contain a Prospectus/Proxy Statement and proxy card/voting instruction form. When you provide us with your completed proxy card/voting instruction form, it tells us how you wish to vote on the important issue being presented for your consideration at the Meeting. If you complete and sign the proxy card/voting instruction form, we will vote your shares exactly as you tell us. If you simply sign the proxy/voting instruction form, and do not provide us with voting instructions, your shares will be voted “FOR” the proposed Plan of Reorganization (described below). In addition, the persons designated as proxies will be authorized to vote in their discretion on any other matters that may properly come before the Meeting. We ask that you review this document and vote using the enclosed proxy card/voting instruction form. If shareholders return their proxy cards/voting instruction forms promptly, we may be able to avoid making additional mailings.
PLEASE TAKE A MOMENT TO FILL OUT, SIGN AND RETURN THE
ENCLOSED PROXY CARD/VOTING INSTRUCTION FORM
The Board of Trustees of the Trust unanimously recommends that you approve a Plan of Reorganization that would result in the various classes of shares of the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund”), one series of the Trust, in effect, being exchanged for the corresponding classes of shares of the Gartmore Growth Fund (the “Growth Fund”), another series of the Trust. If the shareholders of both the Large Cap Growth Fund and the Growth Fund approve the proposal, shareholders of the Large Cap Growth Fund will receive shares of the corresponding class of the Growth Fund equal in aggregate value to the shares they own in that class of the Large Cap Growth Fund immediately prior to the reorganization. After the reorganization, those shareholders will no longer be shareholders of the Large Cap Growth Fund, and instead will be shareholders of the Growth Fund.
The Board of Trustees is recommending that you approve the Plan of Reorganization and resulting transaction for the following reasons:
· | For both Funds, shareholders should benefit from the greater efficiencies that can result from an investment in a larger fund, including potentially lower expense ratios and greater portfolio management efficiencies and specifically for the Large Cap Growth Fund shareholders, there should be a benefit from the lower expense ratios of the Growth Fund relative to the Large Cap Growth Fund; |
· | The Funds have identical investment objectives and are managed similarly (as described below), and the Board of Trustees and the Funds’ investment adviser do not believe that it is desirable or in the best interests of shareholders to maintain two funds that are so similar; |
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· | For the Large Cap Growth Fund shareholders, significant recent efforts by the Growth Fund’s investment adviser to improve that Fund’s performance have begun to materialize and shareholders of the Large Cap Growth Fund would likely benefit from those efforts if they became shareholders of the Growth Fund; |
· | For both Funds, as described more fully in the attached Prospectus/Proxy Statement, the transactions contemplated by the Plan of Reorganization are expected to be tax-free for federal income tax purposes, which means that shareholders of the Large Cap Growth Fund would not have a taxable gain or loss on the exchange of their shares and there will be no tax consequences to the Growth Fund shareholders; and |
· | For both Funds, the expenses resulting from the transactions contemplated by the Plan of Reorganization, including the costs of soliciting proxies, will be paid by the Funds’ investment adviser or one of its affiliates. |
Both Funds are managed by Gartmore Mutual Fund Capital Trust, and the Large Cap Growth Fund is subadvised by Goldman Sachs Investment Management, L.P. The Growth Fund’s investment objective, policies, strategies and portfolio management will not be affected if shareholders approve the Plan of Reorganization.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS
THAT YOU VOTE IN FAVOR OF THIS PROPOSAL.
· | To ensure that your vote is counted, indicate your position on the enclosed proxy card/voting instruction form. |
· | Sign and return your card/form promptly. |
· | If you determine at a later date that you wish to attend the Meeting, you may revoke your proxy/voting instructions and vote in person. |
If you have any account specific questions, please call the Trust at 1-800-848-0920. If you have any questions relating to the accompanying Prospectus/Proxy Statement or need assistance voting your shares, please call our proxy solicitor, DF King & Co. Inc. at 1-800-714-3305. Thank you for your prompt attention to this matter.
Sincerely,
Paul J. Hondros
Chairman
Gartmore Mutual Funds
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GARTMORE MUTUAL FUNDS
NATIONWIDE LARGE CAP GROWTH FUND
GARTMORE GROWTH FUND
1200 RIVER ROAD
CONSHOHOCKEN, PENNSYLVANIA 19428
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Scheduled for December 12, 2003
To the Shareholders of the Nationwide Large Cap Growth Fund and the Gartmore Growth Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the “Meeting”) of the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund”) and the Gartmore Growth Fund (the “Growth Fund”), each a series of Gartmore Mutual Funds, an Ohio business trust (the “Trust”), will be held at 1200 River Road, Conshohocken, Pennsylvania 19428 on Friday, December 12, 2003 at 9:00 a.m., Eastern time. The Meeting is being called for the following purposes:
1. | To approve or disapprove a Plan of Reorganization with respect to the Large Cap Growth Fund and the Growth Fund that provides for the acquisition by the Growth Fund of substantially all of the assets, subject to liabilities, of the Large Cap Growth Fund in exchange solely for Class A shares, Class B shares, Class C shares and Institutional Service Class shares of the Growth Fund, followed by the distribution pro rata of such shares to the shareholders of the Large Cap Growth Fund holding the corresponding class of shares of the Large Cap Growth Fund in complete liquidation, and the dissolution of the Large Cap Growth Fund. |
2. | To transact such other business as may properly come before the Meeting or any adjournment thereof. |
The attached Prospectus/Proxy Statement provides more information about the transaction contemplated by the Plan of Reorganization. A copy of the Plan of Reorganization is attached as Exhibit A to the Prospectus/Proxy Statement.
Shares of the Funds may be purchased by certain separate accounts of Nationwide Life Insurance Company, Nationwide Life and Annuity Insurance Company or one of their affiliated insurance companies (collectively, “Nationwide”) to fund benefits payable under certain variable annuity contracts and variable life insurance policies (“variable contracts”). Nationwide hereby solicits and agrees to vote at the Meeting, to the extent required, shares of the Funds which are held in these separate accounts in accordance with instructions timely received from owners of the variable contracts. With respect to all other shareholders, the Trustees of the Trust are soliciting your votes.
If you are a shareholder of record at the close of business on October 1, 2003, you have the right to direct the persons listed on the enclosed proxy card on how your shares in the Fund(s) should be voted. If you are a variable contract owner of record at the close of business on October 1, 2003, you have the right to instruct Nationwide on how the Fund shares attributable to your variable contract should be voted. To assist you, a proxy card or a voting instruction form is enclosed.
By Order of the Board of Trustees
/s/ ERIC E. MILLER
Eric E. Miller, Secretary
Gartmore Mutual Funds
October 22, 2003
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TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF FURTHER MAILINGS, THE BOARD OF TRUSTEES URGES YOU TO COMPLETE, DATE, SIGN, AND RETURN THE ENCLOSED PROXY CARD OR VOTING INSTRUCTION FORM IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE. IT IS IMPORTANT THAT YOU RETURN YOUR SIGNED PROXY CARD OR VOTING INSTRUCTION FORM PROMPTLY SO THAT A QUORUM MAY BE ENSURED.
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES
YOU OWNED ON THE RECORD DATE.
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PROSPECTUS/PROXY STATEMENT
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PROSPECTUS/PROXY STATEMENT
Dated October 22, 2003
Acquisition of All of the Assets, Subject to
Liabilities, of the
NATIONWIDE LARGE CAP GROWTH FUND,
a series of
GARTMORE MUTUAL FUNDS
By and in exchange for
Class A shares, Class B shares, Class C shares and Institutional
Service Class shares of the
GARTMORE GROWTH FUND,
also a series of
GARTMORE MUTUAL FUNDS
1200 River Road
Conshohocken, Pennsylvania 19428
1-800-848-0920
This Prospectus/Proxy Statement solicits proxies to be voted at a Special Meeting of Shareholders (the “Meeting”) of the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund”) and the Gartmore Growth Fund (the “Growth Fund”), each a series of Gartmore Mutual Funds (the “Trust”). The shareholders of each of the Large Cap Growth Fund and the Growth Fund (together, the “Funds”) are being asked to approve a Plan of Reorganization (the “Plan”). If shareholders of both Funds vote to approve the Plan, all of the assets of the Large Cap Growth Fund, subject to liabilities of the Large Cap Growth Fund, will be acquired by the Growth Fund in exchange for Class A shares of the Growth Fund (“Growth Fund Class A Shares”), Class B shares of the Growth Fund (“Growth Fund Class B Shares”), Class C shares of the Growth Fund (“Growth Fund Class C shares”) and Institutional Service Class shares of the Growth Fund (“Growth Fund ISC Shares”). (The Growth Fund Class A Shares, Growth Fund Class B Shares, Growth Fund Class C Shares and Growth Fund ISC Shares are referred to collectively as the “Growth Fund Shares.”)
The Meeting will be held at 1200 River Road, Conshohocken, Pennsylvania 19428, on Friday, December 12, 2003, at 9:00 a.m., Eastern time. This Prospectus/Proxy Statement is being furnished in connection with the solicitation (1) of proxies from shareholders of record of the Funds on October 1, 2003 (the “Record Date”), by the Board of Trustees on behalf of the Funds, and (2) of voting instructions by Nationwide Life Insurance Company, Nationwide Life and Annuity Insurance Company and their affiliated insurance companies (collectively, “Nationwide”) from owners of certain variable annuity contracts and variable insurance policies (collectively, “variable contracts”) having contract values on the Record Date allocated to a subaccount of a Nationwide separate account invested in shares of the Funds. This Prospectus/Proxy Statement and forms of proxy card or proxy card/voting instructions will be first sent to shareholders of the Funds on or about November [1], 2003.
If shareholders of both Funds vote to approve the Plan, shareholders of the Large Cap Growth Fund will receive Growth Fund Shares as follows:
Current Shares | New Shares | |
Large Cap Growth Fund Class A shares | Growth Fund Class A Shares | |
Large Cap Growth Fund Class B shares | Growth Fund Class B Shares | |
Large Cap Growth Fund Class C shares | Growth Fund Class C Shares | |
Large Cap Growth Fund Institutional Service | Growth Fund ISC Shares |
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(The Large Cap Growth Fund Class A shares, Large Cap Growth Fund Class B shares, Large Cap Growth Fund Class C shares and Large Cap Growth Fund Institutional Service Class shares are referred to collectively as the “Large Cap Growth Fund Shares.”) The Growth Fund Shares that shareholders of the Large Cap Growth Fund will receive will be equal in value to the Large Cap Growth Fund Shares they hold immediately prior to the reorganization described in this Prospectus/Proxy Statement. In the event that shareholders of both Funds vote to approve the Plan, it is currently anticipated that the reorganization of the Large Cap Growth Fund with and into the Growth Fund as described in the Plan will occur on or about December 22, 2003. Pursuant to the Plan, the Large Cap Growth Fund will then be liquidated and dissolved.
The investment objectives of the Large Cap Growth Fund and the Growth Fund are identical—long-term capital appreciation. Also, the Funds have substantially similar investment strategies and identical fundamental investment restrictions. The main differences between the two Funds are that (1) the Growth Fund has had a significantly higher portfolio turnover rate during the past three years, and (2) while the Growth Fund is managed directly by Gartmore Mutual Fund Capital Trust, the Funds’ investment adviser (“Gartmore”), the Large Cap Growth Fund is managed in a “manager of managers” style where one or more subadvisers are selected by Gartmore to manage all or a portion of the Large Cap Growth Fund’s assets. Currently, the Large Cap Growth Fund is subadvised by Goldman Sachs Investment Management, L.P.
This Prospectus/Proxy Statement contains the information about the proposed reorganization contemplated by the Plan and about the Growth Fund Shares that will be issued if the Plan is implemented, which holders of the Large Cap Growth Fund Shares should know before approving the Plan and thereby investing in the Growth Fund Shares. Once you have reviewed this Prospectus/Proxy Statement, you should retain it for future reference. Statements of additional information for the Funds, dated October 1, 2003 (relating to the prospectuses of the Growth Fund and the Large Cap Growth Fund dated March 1, 2003, as supplemented from time to time [the “Gartmore Prospectuses”]), as it may be amended or supplemented from time to time (the “Gartmore SAI”), and October 22, 2003 (relating to this Prospectus/Proxy Statement), each containing additional information, have been filed with the U.S. Securities and Exchange Commission (the “SEC”) (File Nos. 333-40455, 333- , 811-08495). The statement of additional information (“SAI”) relating to this Prospectus/Proxy Statement is incorporated herein by reference. The Annual Reports to Shareholders of the Funds for the fiscal year ended October 31, 2002 (the “Annual Reports”) and Semi-Annual Reports to Shareholders of the Funds for the six month period ended April 30, 2003, relating to the Funds (the “Semi-Annual Reports”) have also been filed with the SEC. You may request copies of the Gartmore Prospectuses, the Gartmore SAI, the SAI relating to this Prospectus/Proxy Statement, the Annual Reports or the Semi-Annual Reports without charge by calling 1-800-848-0920 or by writing to the Trust at P.O. Box 182205, Columbus, Ohio 43218-2205.
THE SEC HAS NOT APPROVED OR DISAPPROVED THE GROWTH FUND SHARES OR DETERMINED WHETHER THIS PROSPECTUS/PROXY STATEMENT IS COMPLETE OR ACCURATE. TO STATE OTHERWISE IS A CRIME.
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This Introduction and the section “COMPARISON OF SOME IMPORTANT FEATURES” provide only a summary of certain information contained in this Prospectus/Proxy Statement. You should read the more complete information in the rest of this Prospectus/Proxy Statement, including the Plan (which is attached as Exhibit A) and the SAI relating to this Prospectus/Proxy Statement.
You are being asked to consider and approve the Plan that will have the effect of combining the Large Cap Growth Fund with the Growth Fund. At a meeting held on September 18, 2003, the Board of Trustees of the Trust, on behalf of the Funds, approved the Plan and determined to recommend that shareholders of the Large Cap Growth Fund and the Growth Fund vote to approve the Plan. If shareholders of both Funds vote to approve the Plan, all of the assets, subject to liabilities, of the Large Cap Growth Fund will be transferred to the Growth Fund in exchange for Growth Fund Shares of equal value. The Growth Fund Shares will then be distributed pro rata to the holders of the Large Cap Growth Fund Shares, and the Large Cap Growth Fund will be liquidated and dissolved. (The proposed reorganization contemplated by the Plan is referred to in this Prospectus/Proxy Statement as the “Reorganization.”) As a result of the Reorganization, shareholders of the Large Cap Growth Fund will become shareholders of the Growth Fund. If you are a shareholder of the Large Cap Growth Fund, this means that, upon completion of the Reorganization, your shares of the Large Cap Growth Fund will, in effect, be exchanged for Growth Fund Shares of the corresponding class of equal value as of the time of the Reorganization. If you were a shareholder of the Growth Fund prior to the Reorganization, neither the number of shares you own in the Growth Fund nor the Growth Fund’s investment objective, policies, strategies or portfolio management will be affected by the Reorganization.
For the reasons set forth in the “Reasons for the Reorganization” section, the Board of Trustees of the Trust has determined that the Reorganization is in the best interests of the Funds and their respective shareholders. The Board of Trustees of the Trust also concluded that no dilution in value would result to the shareholders of either Fund as a result of the Reorganization.
THE BOARD OF TRUSTEES RECOMMENDS
THAT YOU VOTE TO APPROVE THE PLAN
How will the shareholder voting be handled?
Shareholders who own shares of the Funds at the close of business on the Record Date (October 1, 2003), will be entitled to notice of and to vote at the Meeting, and will be entitled to one vote for each full share and a fractional vote for each fractional share of the Funds that they hold. The persons named as proxies on the enclosed proxy card(s) will vote shares of the Funds at the Meeting in accordance with the timely instructions received from shareholders. If a duly executed and dated proxy card is received that does not specify a choice (for, against or abstain), the persons named as proxies will consider its timely receipt as an instruction to vote “FOR” the Reorganization. Shareholders may revoke previously submitted proxies at any time prior to the Meeting by: (i) submitting to the Trust a subsequently dated proxy card; (ii) delivering to the Trust a written notice of revocation; or (iii) otherwise giving notice of revocation at the Meeting. In all cases, any action to revoke a proxy must be taken before the authority granted in the proxy card is exercised.
With respect to shares of the Funds held through Nationwide separate accounts as of the Record Date, Nationwide will vote those shares at the Meeting in accordance with instructions timely received from persons entitled to give voting instructions under the variable contracts. To the extent required, Nationwide will vote shares attributable to variable contracts as to which no voting instructions are received in proportion (for, against or abstain) to those for which instructions are timely received. If a duly executed and dated voting instruction form is received that does not specify a choice, Nationwide will consider its timely receipt as an instruction to
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vote “FOR” the Reorganization. Variable contract owners may revoke previously submitted voting instructions given to Nationwide at any time prior to the Meeting by: (i) submitting to Nationwide subsequently dated voting instructions; (ii) delivering to Nationwide a written notice of revocation; or (iii) otherwise giving notice of revocation at the Meeting. In all cases, any action to revoke voting instructions must be taken before the authority granted in the voting instruction form is exercised.
To approve the Plan, a majority of the outstanding Large Cap Growth Fund Shares and a majority of the outstanding shares of the Growth Fund must be voted in favor of it.
Please vote as soon as you receive this Prospectus/Proxy Statement. You may place your vote by completing and signing the enclosed proxy card/voting instruction form or voting by telephone through DF King & Co. Inc. (“DF King”) by calling 1-800-714-3305. If you vote by either method, your votes will be officially cast at the Meeting by the persons appointed as proxies or by Nationwide, as appropriate.
When will the Reorganization become effective?
The Reorganization is currently anticipated to occur on or about December 22, 2003, assuming shareholder approval is obtained from the shareholders of both Funds. Shortly after the Reorganization is completed, shareholders of the Large Cap Growth Fund will receive new account information relating to their new ownership of Growth Fund Shares.
What will happen to accounts of the Large Cap Growth Fund shareholders after the Reorganization?
Upon approval and closing of the Reorganization, the accounts of shareholders of the Large Cap Growth Fund will automatically be transferred to the Growth Fund. After the Reorganization, shareholders of the Large Cap Growth Fund will be assigned a new account at the Growth Fund, and the Large Cap Growth Fund shareholder accounts will be closed. This process will occur automatically, with no action required by shareholders of the Large Cap Growth Fund.
Various types of account servicing features currently available to Large Cap Growth Fund shareholders, such as systematic purchase and withdrawal plans, will transfer automatically to the new Growth Fund shareholder accounts. Following the Reorganization, shareholders of the Large Cap Growth Fund will enjoy the same array of account options as they do presently as shareholders of the Large Cap Growth Fund. Growth Fund Shares delivered to the holders of Large Cap Growth Fund Shares that are subject to a contingent deferred sales charge (“CDSC”) will be given credit for the amount of time the Large Cap Growth Fund Shares were held by the shareholder for the purposes of determining the applicable CDSC.
What are the general tax consequences of the Reorganization?
It is expected that shareholders of the Large Cap Growth Fund will not recognize any gain or loss, for federal income tax purposes, as a result of the exchange of their Large Cap Growth Fund Shares for Growth Fund Shares. It is also expected that shareholders of the Growth Fund will not recognize any gain or loss, for federal income tax purposes, as a result of the Reorganization. If you are a Large Cap Growth Fund shareholder, however, you should consult your tax adviser regarding the effect, if any, of the Reorganization in light of your individual circumstances. You also should consult your tax adviser about state and local tax consequences. For more information about the tax consequences of the Reorganization, please see the section “INFORMATION ABOUT THE REORGANIZATION—What are the tax consequences of the Reorganization?”
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COMPARISON OF SOME IMPORTANT FEATURES
How do the investment objectives, principal strategies and risks of the Funds compare?
This section contains a table comparing the investment objective, strategies and principal risks of investing in each Fund. The discussion of the differences between the Funds is reflected in italics. For a more complete discussion of the principal risks of investing in the Funds, please see “What are the principal risks associated with investments in the Funds?” below.
The investment objective of each Fund is “non-fundamental.” This means that the investment objectives for a Fund may be changed by the Board of Trustees of the Trust without shareholder approval. One notable difference in how the Funds are managed that is not reflected in the following table is that the Large Cap Growth Fund utilizes a “manager of managers” strategy whereby Gartmore Mutual Fund Capital Trust, as the Funds’ investment adviser (“Gartmore”), selects one or more subadvisers to manage all or a certain portion of that Fund. For the Large Cap Growth Fund, Gartmore selected Goldman Sachs Asset Management, L.P. (“GSAM”) to manage that Fund on a day-to-day basis. However, Gartmore manages the Growth Fund directly.
In addition to the strategies set forth below, each Fund is also subject to certain additional investment policies and limitations, which are described in the Gartmore SAI. The Gartmore SAI, which is available upon request, sets forth additional information about the investment policies, strategies and limitations of each Fund.
Large Cap Growth Fund | Growth Fund | |
Investment Objective:
Long-term capital appreciation.
The investment objectives of the Funds are identical. | Investment Objective:
Long-term capital appreciation. | |
Principal Investments:
Under normal conditions, the Large Cap Growth Fund invests at least 80% of its net assets in equity securities issued by large capitalization companies. Specifically, the Large Cap Growth Fund invests primarily in equity securities of U.S. large capitalization companies that are expected to have better prospects for earnings growth than the growth rate of the general domestic economy. Dividend income is a secondary consideration. | Principal Investments:
The Growth Fund primarily invests in common stocks of large capitalization companies. Under normal conditions, the Growth Fund primarily invests in common stocks and generally intends to be fully invested in these securities. The Growth Fund looks for companies whose earnings are expected to consistently growth faster than other companies in the market. | |
The Large Cap Growth Fund considers large capitalization companies to be those with market capitalizations similar to the companies in the Russell 1000® Growth Index.(1) As of June 30, 2003, the market capitalizations of companies in the Russell 1000® Growth Index ranged from $286.8 million to $1.2 billion. Due to market fluctuations and the index’s annual reconstitution, the market capitalization of the companies within the Russell 1000® Growth Index may, at any given time, be higher or lower.
The Funds’ principal investment strategies are substantially the same. Both Funds invest primarily in equity securities of large capitalization companies that are expected to have earnings that consistently grow |
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Large Cap Growth Fund | Growth Fund | |
faster than other companies in the market. However, the two differ in that the Large Cap Growth Fund has an explicit policy to invest at least 80% of its assets in large capitalization companies, which it defines as companies that have market capitalizations similar to the companies in the Russell 1000® Growth Index, while the Growth Fund has only committed to investing primarily in large capitalization companies and does not qualify what it considers to be large capitalization companies. However, for performance purposes, the Growth Fund uses the Russell 1000® Growth Index as its benchmark. Also, the Large Cap Growth Fund’s strategy includes equity securities without limitation as to the type of equity securities, while the Growth Fund’s principal strategy only includes common stocks. However, both Funds historically have had almost all of their assets invested in common stocks of large capitalization companies as defined for the Large Cap Growth Fund. | ||
Investment Style and Strategies:
The Large Cap Growth Fund emphasizes a company’s growth prospects in analyzing equity securities to be purchased by the Large Cap Growth Fund. The Large Cap Growth Fund’s investments are selected using both a variety of quantitative techniques and fundamental research in seeking to maximize the Large Cap Growth Fund’s expected return while maintaining risk, style, and capitalization and industry characteristics similar to the Russell 1000® Growth Index. The Large Cap Growth Fund seeks a portfolio comprised of companies with above average capitalizations and earnings growth expectations and below average dividend yields.
There are two building blocks in the subadviser’s active management of the Large Cap Growth Fund. Under normal conditions, the subadviser generally buys and sells securities based on whether securities fit within this model:
1. Stock Selection The Large Cap Growth Fund uses the subadviser’s proprietary multifactor model, a rigorous computerized rating system, to forecast the returns of securities in the Large Cap Growth Fund’s portfolio. This model incorporates common variables covering measures of:
· Research (What do fundamental analysts think about the company and its prospects?) | Investment Style and Strategies:
Through research, the portfolio manager and analysts gather, check and analyze information about industries and companies to determine if they are well positioned for long-term growth. The Growth Fund seeks companies that have favorable long-term growth potential and the financial resources to capitalize on growth opportunities.
The portfolio manager will consider, among other things, a company’s financial strength, competitive position in its industry, projected future earnings, cash flows, and dividends when deciding whether to buy or sell securities. The Growth Fund looks for companies whose earnings are expected to consistently grow faster than other companies in the market. It generally will sell securities if:
· The price of the security is overvalued. · The outlook of a company’s earnings growth becomes less attractive. · More favorable opportunities are identified.
The portfolio manager generally has a buy and hold strategy. However, the Growth Fund has engaged in more frequent portfolio securities trading in order to take advantage of recent volatile markets. Frequent portfolio transactions will lead to higher transaction costs for the Growth Fund and may cause additional tax consequences for shareholders.
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Large Cap Growth Fund | Growth Fund | |
· Value (How is the company priced relative to fundamental accounting measures?) · Momentum (What are medium-term price trends? How has the price responded to new information?) · Profitability (What is the company’s margin on sales? How efficient are its operations?) · Earnings Quality (Were earnings derived from sustainable (cash-based) sources?)
Each of these factors is carefully evaluated in the multifactor model because each has demonstrated a significant impact on the performance of the securities and markets they are designed to forecast. In this process, the subadviser manages risk by attempting to limit deviations from the benchmarks, running size and sector neutral portfolios.
2. Portfolio Construction A proprietary computer optimizer calculates many security combinations (at each possible weighting) to construct the most efficient risk/return portfolio given the Large Cap Growth Fund’s benchmark.
The Funds have investment styles and strategies that are similar. Both Funds focus on research and take into account value, cash flows and dividends. However, the investment style and strategies of the two differ in certain respects. The Large Cap Growth Fund makes use of quantitative modeling techniques, in addition to research. When picking portfolio securities each Fund may focus on certain factors that the other Fund does not focus on. The Large Cap Growth Fund factors in a company’s momentum, profitability and earnings quality (as described above) while the Growth Fund factors in a company’s cash flows, projected future earnings, financial strength and competitive position in its industry. | ||
Principal Risks:
The Large Cap Growth Fund is subject to the following principal risks:
· Stock market risk · Market trends risk
The Growth Fund may have higher transaction costs and volatility than the Large Cap Growth Fund because the Growth Fund may engage in more active and frequent trading. | Principal Risks:
The Growth Fund is subject to the following principal risk:
· Stock market risk · Market trends risk · Portfolio turnover risk | |
(1) The Russell 1000® Growth Index is a registered service mark of The Frank Russell Company which does not sponsor and is in no way affiliated with the Funds. |
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What are the principal risks of investments in the Funds?
Investments in the Large Cap Growth Fund and the Growth Fund involve risks common to most mutual funds—the net asset value and total return of each of the Funds will depend upon changes in the value of their portfolio securities. There is no guarantee against losses (including the loss of principal) resulting from an investment in the Large Cap Growth Fund or the Growth Fund, and no guarantee that either the Large Cap Growth Fund or the Growth Fund will achieve its investment objective. The Large Cap Growth Fund and the Growth Fund are each subject to the risk that the Fund’s investment adviser/subadviser may make poor investment decisions, either regarding market movements or specific securities issuers. An investment in the Large Cap Growth Fund or the Growth Fund is not, by itself, a complete or balanced investment program.
The Large Cap Growth Fund and the Growth Fund are also subject to the risks presented by investing in equity securities. For example, both Funds are subject to stock market risk and market trends (i.e., the risk that from time to time the market may not favor growth-oriented stocks).
For more information about the risks of the Funds, see “What are the principal risks associated with an investment in the Funds?” under the heading “COMPARISON OF INVESTMENT OBJECTIVES, STRATEGIES, POLICIES AND RISKS” in this Prospectus/Proxy Statement.
Who manages the Funds and what are their fees?
The management of the business and affairs of the Funds is the responsibility of the Board of Trustees of the Trust. The Board of Trustees formulates and reviews the general policies regarding the operation of the Trust, and directs the officers to perform the daily functions on behalf of the Funds. The Board of Trustees meets periodically to review the performance, investment activity and investment practices of the Funds.
The Trust was organized as an Ohio business trust on October 30, 1997, and it is registered with the SEC. The Trust is authorized to issue an unlimited number of shares of beneficial interest. Presently, there are forty-four separate series of the Trust, including the Funds. The Funds are diversified, open-end, registered management investment company series, commonly referred to as “mutual funds.”
Gartmore, located at 1200 River Road, Conshohocken, Pennsylvania 19428, is the investment adviser for each Fund, and, as such, manages the investment of the Funds’ assets and supervises the daily business affairs of each of the Funds. Subject to the supervision and direction of the Board of Trustees of the Trust, Gartmore allocates the Large Cap Growth Fund’s assets among one or more subadvisers and evaluates and monitors the performance of such subadviser(s). As of June 30, 2003, Gartmore had assets under management of approximately $35.2 billion. Currently, GSAM serves as the subadviser for the Large Cap Growth Fund.
Gartmore, a Delaware statutory trust organized in 1999, is a wholly owned subsidiary of Gartmore Global Investments, Inc., a holding company which is an indirect, majority owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is wholly owned by Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.3%) and Nationwide Mutual Fire Insurance Company (4.7%), each of which is a mutual company owned by its policyholders.
GSAM, an affiliated registered investment adviser of Goldman Sachs & Co. (“Goldman Sachs”), serves as subadviser to the Large Cap Growth Fund. As of March 31, 2003, GSAM, along with other units of the Investment Management Division of Goldman Sachs, had assets under management of approximately $322.8 billion. GSAM is located at 32 Old Slip, 24th Floor, New York, New York 10005.
In performing its investment advisory services, GSAM, although responsible for the management of the Large Cap Growth Fund, is able to draw upon the research and expertise of its asset management affiliates for portfolio decisions and management with respect to certain portfolio securities. In addition, GSAM has access to
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the research of Goldman Sachs, as well as certain proprietary technical models developed by Goldman Sachs and may apply quantitative and qualitative analysis in determining the appropriate allocations among the categories of issuers and types of securities.
The Growth Fund’s portfolio manager is Christopher Baggini. As portfolio manager, Mr. Baggini is responsible for the day-to-day management of the Growth Fund and the selection of the Growth Fund’s investments. Mr. Baggini joined Gartmore in March 2000. Prior to joining Gartmore, Mr. Baggini was a portfolio manager for Allied Investment Advisors from November 1996 to March 2000.
The Large Cap Growth Fund’s portfolio managers are Robert C. Jones, Managing Director, Victor H. Pinter, Vice President, and Melissa Brown, Managing Director. Mr. Jones joined GSAM’s predecessor as a portfolio manager in 1989. Mr. Pinter joined GSAM’s predecessor as a research analyst in 1989 and became a portfolio manager in 1992. Ms. Brown joined GSAM’s predecessor as a portfolio manager in 1998. From 1984 to 1998, she was the director of Quantitative Equity Research and served on the Investment Policy Committee at Prudential Securities.
For the services provided under the Investment Advisory Agreement between the Trust and Gartmore, Gartmore receives an annual fee, paid monthly, based on the average daily net assets of the Funds, according to the following fee schedule:
Fund | Assets of such Fund | Investment Advisory Fee | |||
Growth Fund | $0 up to $250 million | 0.60 | % | ||
$250 million up to $1 billion | 0.575 | % | |||
$1 billion up to $2 billion | 0.55 | % | |||
$2 billion up to $5 billion | 0.525 | % | |||
$5 billion and more | 0.50 | % | |||
Large Cap Growth Fund | $0 up to $150 million | 0.80 | % | ||
$150 million and more | 0.70 | % |
For the fiscal year ended October 31, 2002, the total management fees paid to Gartmore by the Growth Fund, as a percentage of the Growth Fund’s average daily net assets, was 0.59%. The total management fees paid by the Large Cap Growth Fund to Gartmore for its advisory services for the fiscal year ended October 31, 2002, expressed as a percentage of the Large Cap Growth Fund’s average daily net assets, was 0.80% (before any waivers and reimbursements). For the fiscal year ended October 31, 2002, Gartmore voluntarily waived a portion of its fees and reimbursed certain expenses (in the amount of $69,286) in order to limit the annual fund operating expenses (exclusive of certain fees and expenses, including Rule 12b-1 and administrative services fees) of the Large Cap Growth Fund Shares to 1.05%.
Out of its management fee, Gartmore paid GSAM, a division of Goldman Sachs and the Large Cap Growth Fund’s prior subadviser, an annual subadvisory fee for the fiscal year ended October 31, 2002, based on the Large Cap Growth Fund’s average daily net assets, of 0.40%.
What are the fees and expenses of each Fund and what might they be after the Reorganization?
Fees and Expenses—The following tables describe the fees and expenses that you may pay if you buy and hold shares of the Funds, as well as the pro forma fees and expenses of the Growth Fund after the Reorganization.
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FEE TABLES FOR
THE LARGE CAP GROWTH FUND AND THE GROWTH FUND
A. Class A Shares
Actual | Pro forma Growth Fund— Class A After Reorganization | ||||||||
Large Cap Growth Fund— Class A | Growth Fund— Class A | ||||||||
Shareholder Fees(1) (paid directly from your investment) | |||||||||
Maximum Sales Charge (Load) | |||||||||
Imposed on Purchases (as a percentage of offering price) | 5.75 | %(2) | 5.75 | %(2) | 5.75 | %(2) | |||
Maximum Deferred Sales Charge (Load) | |||||||||
Imposed on redemptions (as a percentage of original purchase price or sale proceeds, as applicable) | None | (3) | None | (3) | None | (3) | |||
Annual Fund Operating Expenses | |||||||||
(deducted from Fund assets) | |||||||||
Management Fees | 0.80 | % | 0.59 | % | (0.59 | )% | |||
Distribution and/or Service (12b-1) Fees | 0.25 | % | 0.25 | % | 0.25 | % | |||
Other Expenses | 0.46 | %(4) | 0.31 | %(4) | 0.29 | % | |||
Total Annual Fund Operating Expenses | 1.51 | % | 1.15 | % | 1.13 | % | |||
Amount of Fee Waiver/Expense Reimbursement | 0.07 | %(5) | — | — | |||||
Total Annual Fund Operating Expenses (After Waivers/Expense Limitations) | 1.44 | % | 1.15 | % | 1.13 | % | |||
B. Class B Shares
Actual | Pro forma Growth Fund— Class B After Reorganization | ||||||||
Large Cap Growth Fund— Class B | Growth Fund— Class B | ||||||||
Shareholder Fees(1) | |||||||||
(paid directly from your investment) | |||||||||
Maximum Sales Charge (Load) | |||||||||
Imposed on Purchases (as a percentage of offering price) | None | None | None | ||||||
Maximum Deferred Sales Charge (Load) | |||||||||
Imposed on redemptions (as a percentage of original purchase price or sale proceeds, as applicable) | 5.00 | %(6) | 5.00 | %(6) | 5.00 | %(6) | |||
Annual Fund Operating Expenses | |||||||||
(deducted from Fund assets) | |||||||||
Management Fees | 0.80 | % | 0.59 | % | 0.59 | % | |||
Distribution and/or Service (12b-1) Fees | 1.00 | % | 1.00 | % | 1.00 | % | |||
Other Expenses | 0.32 | %(4) | 0.29 | %(4) | 0.27 | % | |||
Total Annual Fund Operating Expenses | 2.12 | % | 1.88 | % | 1.86 | % | |||
Amount of Fee Waiver/Expense Reimbursement | 0.07 | %(5) | — | — | |||||
Total Annual Fund Operating Expenses (After Waivers and Expense Limitations) | 2.05 | % | 1.88 | % | 1.86 | % | |||
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C. Class C Shares | |||||||||
Actual | Pro forma Growth Fund— Class C After Reorganization | ||||||||
Large Cap Growth Fund— Class C | Growth Fund— Class C | ||||||||
Shareholder Fees(1) | |||||||||
(paid directly from your investment) | |||||||||
Maximum Sales Charge (Load) | |||||||||
Imposed on Purchases (as a percentage of offering price) | 1.00 | % | 1.00 | % | 1.00 | % | |||
Maximum Deferred Sales Charge (Load) | |||||||||
Imposed on redemptions (as a percentage of original purchase price or sale proceeds, as applicable) | 1.00 | %(7) | 1.00 | %(7) | 1.00 | %(7) | |||
Annual Fund Operating Expenses (deducted from Fund assets) | |||||||||
Management Fees | 0.80 | % | 0.59 | % | 0.59 | % | |||
Distribution and/or Service (12b-1) Fees | 1.00 | % | 1.00 | % | 1.00 | % | |||
Other Expenses | 0.32 | %(4) | 0.29 | %(4) | 0.27 | % | |||
Total Annual Fund Operating Expenses | 2.12 | % | 1.88 | % | 1.86 | % | |||
Amount of Fee Waiver/Expense Reimbursement | 0.07 | %(5) | — | — | |||||
Total Annual Fund Operating Expenses (After Waivers/Expense Limitations) | 2.05 | % | 1.88 | % | 1.86 | % | |||
D. ISC Shares | |||||||||
Actual | Pro forma Growth Fund— | ||||||||
Large Cap Growth Fund— ISC Shares | Growth Fund— ISC Shares | ||||||||
Shareholder Fees(1) | |||||||||
(paid directly from your investment) | |||||||||
Maximum Sales Charge (Load) | |||||||||
Imposed on Purchases (as a percentage of offering price) | None | None | None | ||||||
Maximum Deferred Sales Charge (Load) | |||||||||
Imposed on redemptions (as a percentage of original purchase price or sale proceeds, as applicable) | None | None | None | ||||||
Annual Fund Operating Expenses (deducted from Fund assets) | |||||||||
Management Fees | 0.80 | % | 0.59 | % | 0.59 | % | |||
Distribution and/or Service (12b-1) Fees | None | None | None | ||||||
Other Expenses | 0.57 | %(4) | 0.29 | %(4) | 0.27 | % | |||
Total Annual Fund Operating Expenses | 1.37 | % | 0.88 | % | 0.86 | % | |||
Amount of Fee Waiver/Expense Reimbursement | 0.07 | % | — | — | |||||
Total Annual Fund Operating Expenses | 1.30 | % | 0.88 | % | 0.86 | % | |||
(1) | If you buy and sell shares through a broker or other financial intermediary, such broker or financial intermediary may also charge you a transaction fee. |
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(2) | As the amount of your investment increases, the sales charge imposed on the purchase of Class A shares decreases. For more information, refer to “Buying, Selling and Exchanging Fund Shares—Buying Shares—Front-End Sales Charges” in the Gartmore Prospectuses, which accompany this Prospectus/Proxy Statement. |
(3) | A CDSC of up to 0.50% may be imposed on certain redemptions of Class A shares purchased without a sales charge. |
(4) | “Other Expenses” have been restated to reflect revised fees under the Fund’s fund administration, transfer agency and custody agreements and other fee changes implemented for the current fiscal year. |
(5) | Through at least February 29, 2004, Gartmore contractually agreed to limit operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, Rule 12b-1 fees and administrative services fees) from exceeding 1.05% for Class A, Class B, Class C and Institutional Service Class shares of the Large Cap Growth Fund. The Large Cap Growth Fund is authorized to reimburse Gartmore for management fees previously waived and/or for the costs of Other Expenses paid by Gartmore provided that any such reimbursement will not cause the Large Cap Growth Fund to exceed the expense limitations then in effect. The Large Cap Growth Fund’s ability to reimburse Gartmore in this manner only applies to fees paid or reimbursements made by Gartmore at some time within the first five years from the time the Large Cap Growth Fund commenced operations. |
(6) | A CDSC ranging from 5% to 1% is charged when you sell Class B shares within the first six years of purchase. Class B shares are converted to Class A shares after you have held them for seven years. See “Buying, Selling and Exchanging Fund Shares—Selling Shares—Contingent Deferred Sales Charge (CDSC) on Class A, Class B and Class C Shares,” in the Gartmore Prospectuses, which accompany this Prospectus/Proxy Statement. |
(7) | A CDSC of 1% is charged when you sell Class C shares within the first year after purchase. See “Buying, Selling and Exchanging Fund Shares—Selling Shares—Contingent deferred sales charge (CDSC) on Class A, Class B and Class C shares” in the Gartmore Prospectuses, which accompany this Prospectus/Proxy Statement. |
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Examples
These examples show what you could pay in expenses over time. This example can help you compare the costs of investing in Large Cap Growth Fund Shares with the cost of investing in Growth Fund Shares of the comparable class, both before and after the Reorganization. You can also use these examples to compare the costs of the Funds with other mutual funds. The examples assume that you invest $10,000 in the Large Cap Growth Fund and the Growth Fund for the time periods indicated and then sell all of your shares at the end of those periods. The examples assume a 5% return each year, the expense limitation for the Large Cap Growth Fund, as described above, is in place for only one year, and no changes in expenses. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Class A Shares | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||
Large Cap Growth Fund | $ | 713 | (1) | $ | 1,018 | $ | 1,345 | $ | 2,267 | ||||
Growth Fund | $ | 685 | $ | 919 | $ | 1,172 | $ | 1,892 | |||||
Pro forma Growth Fund (after the Reorganization) | $ | 684 | $ | 913 | $ | 1,161 | $ | 1,871 | |||||
Class B Shares | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||
Large Cap Growth Fund | $ | 708 | $ | 957 | $ | 1,333 | $ | 2,215 | |||||
Growth Fund | $ | 691 | $ | 891 | $ | 1,216 | $ | 1,919 | |||||
Pro forma Growth Fund (after the Reorganization) | $ | 689 | $ | 885 | $ | 1,206 | $ | 1,903 | |||||
Class C Shares | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||
Large Cap Growth Fund | $ | 408 | $ | 751 | $ | 1,221 | $ | 2,522 | |||||
Growth Fund | $ | 391 | $ | 685 | $ | 1,106 | $ | 2,279 | |||||
Pro forma Growth Fund (after the Reorganization) | $ | 389 | $ | 679 | $ | 1,096 | $ | 2,258 | |||||
ISC Class Shares | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||
Large Cap Growth Fund | $ | 132 | $ | 427 | $ | 743 | $ | 1,640 | |||||
Growth Fund | $ | 90 | $ | 281 | $ | 488 | $ | 1,084 | |||||
Pro forma Growth Fund (after the Reorganization) | $ | 88 | $ | 274 | $ | 477 | $ | 1,061 |
(1) | Assumes CDSC will not apply. |
You would pay the following expenses on the same investment if you did not sell your shares:
Class B Shares | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||
Large Cap Growth Fund | $ | 208 | $ | 657 | $ | 1,133 | $ | 2,215 | ||||
Growth Fund | $ | 191 | $ | 591 | $ | 1,016 | $ | 1,919 | ||||
Pro forma Growth Fund (after the Reorganization) | $ | 189 | $ | 585 | $ | 1,006 | $ | 1,900 | ||||
Class C Shares | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||
Large Cap Growth Fund | $ | 306 | $ | 751 | $ | 1,221 | $ | 2,522 | ||||
Growth Fund | $ | 289 | $ | 685 | $ | 1,106 | $ | 2,279 | ||||
Pro forma Growth Fund (after the Reorganization) | $ | 287 | $ | 679 | $ | 1,096 | $ | 2,258 |
These are just examples. They do not represent past or future expenses or returns. Each of the Large Cap Growth Fund and the Growth Fund pays its operating expenses. The effects of these expenses are reflected in the net asset value and are not directly charged to your account.
The expenses of each of the Large Cap Growth Fund and the Growth Fund are comprised of expenses attributable to each Fund, respectively, as well as expenses not attributable to any particular series of the Trust that are allocated among the various series of the Trust.
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How do the performance records of the Funds compare?
The performance of the Funds as of July 31, 2003, is shown below:
Total Returns
Inception Date(1) | Cumulative Total Returns | Average Annual Total Returns | |||||||||||||||
3 month | YTD | 1 Year | 2 Year | 3 Year | |||||||||||||
Large Cap Growth Fund—Class A | 11/2/98 | 10.01 | % | 15.46 | % | 10.34 | % | (10.90 | %) | (19.94 | %) | ||||||
Growth Fund—Class A | 5/11/98 | 10.93 | % | 18.36 | % | 10.04 | % | (9.63 | %) | (22.55 | %) | ||||||
Large Cap Growth Fund—Class B | 11/2/98 | 9.97 | % | 15.09 | % | 9.80 | % | (11.62 | %) | (20.71 | %) | ||||||
Growth Fund—Class B | 5/11/98 | 10.63 | % | 17.78 | % | 9.21 | % | (10.52 | %) | (23.75 | %) | ||||||
Large Cap Growth Fund—Class C(2) | 3/1/01 | 9.97 | % | 15.09 | % | 9.63 | % | (11.62 | %) | (20.71 | %) | ||||||
Growth Fund—Class C(1) | 3/1/01 | 10.63 | % | 17.78 | % | 8.97 | % | (10.59 | %) | (23.18 | %) | ||||||
Large Cap Growth Fund—ISC | 11/2/98 | 9.93 | % | 15.49 | % | 10.41 | % | (10.83 | %) | (19.80 | %) | ||||||
Growth Fund—ISC(1) | 1/2/02 | 11.00 | % | 18.59 | % | 10.12 | % | (9.39 | %) | (22.28 | %) |
(1) | These returns through March 1, 2001 for Class C shares and through January 2, 2002 for ISC shares, include performance based on the Growth Fund’s Class D shares and the Growth Fund’s predecessor Fund, which was achieved prior to the creation of Class C and Institutional Service Class shares, and which is the same as the performance of the Growth Fund’s Class D shares (which shares will not be issued in connection with the Reorganization). Excluding the effect of any fee waivers or expense reimbursements, Class D shares’ average annual total returns are similar to what Class C and ISC shares would have produced because Class C and ISC shares invest in the same portfolio as Class D shares. These returns do not reflect the additional fees applicable to these classes of shares; if these fees were reflected, the annual returns for these classes would have been lower. |
(2) | These returns for the Large Cap Growth Fund Class C Shares include performance based on Class B shares, which was achieved prior to the creation of Class C shares. These returns have not been restated for fees applicable to Class C shares. Had Class C shares been in existence for the time periods presented, the performance of Class C shares would have been similar assuming similar expenses. |
Where can I find more financial and performance information about the Funds?
For the Large Cap Growth Fund and the Growth Fund, selected per share financial information for the past five fiscal years (or since inception if the Fund has been operating for less than five years) and for the six month period ended April 30, 2003, is included in Exhibit B to this Prospectus/Proxy Statement. The Annual Reports and the Semi-Annual Reports also contain more financial information about the Large Cap Growth Fund and the Growth Fund, and have been incorporated by reference to, and accompany the SAI relating to this Prospectus/Proxy Statement and are available upon request.
Additional performance information as of the most recent calendar year end, including after tax return information and Management’s discussion of the Funds’ performance for the fiscal year ended October 31, 2002, is included in Exhibit C to this Prospectus/Proxy Statement.
What are other key features of the Funds?
The Funds use the same service providers for the following services:
Fund Administration Services
Gartmore SA Capital Trust (“GSA”), a wholly owned subsidiary of Gartmore Global Investments, Inc., serves as the administrator for the Funds and provides various administrative and accounting services, including
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daily valuation of the Funds’ shares, preparation of financial statements, tax returns, and regulatory reports, and presentation of quarterly reports to the Board of Trustees. GSA is located at 1200 River Road, Conshohocken, Pennsylvania 19428. BISYS Fund Services Ohio, Inc. (“BISYS”), in its capacity as sub-administrator, provides the various administrative and accounting services, including daily valuation of the Funds’ shares, preparation of financial statements, tax returns, and regulatory reports, and presentation of quarterly reports to the Trust’s Board of Trustees.
Transfer Agency and Custody Services
Gartmore Investors Services, Inc. (“GISI”), 1200 River Road, Conshohocken, Pennsylvania 19428, serves as the transfer agent and dividend disbursing agent for each Fund. GISI is a wholly-owned subsidiary of GSA. BISYS, 3435 Stelzer Road, Columbus, Ohio 43219, as the sub-transfer agent, provides certain transfer agent services for the Funds. JPMorgan Chase Bank, 4 Chase MetroTech Center, Brooklyn, New York 11245, is the custodian for both Funds and makes all receipts and disbursements for the Funds.
Distribution Services
Gartmore Distribution Services, Inc., also located at 1200 River Road, Conshohocken, Pennsylvania 19428 (“GDSI”), serves as underwriter for each Fund in the continuous distribution of its shares. In its capacity as distributor for each Fund’s shares, GDSI solicits orders for the sale of shares, advertises and pays the costs of advertising, office space and the personnel involved in such activities. GDSI receives no compensation under its Underwriting Agreement with the Trust. GDSI is an indirect, wholly-owned subsidiary of GSA.
Distribution and Service Fees
The Funds have adopted a Distribution Plan (the “12b-1 Plan”) under Rule 12b-1 of the 1940 Act, which permits the Funds to compensate GDSI, as the Funds’ distributor, for expenses associated with distributing the Funds’ shares and providing shareholder services. Although actual distribution expenses may be more or less, under the 12b-1 Plan, Class A shares of the Funds pay GDSI amounts not exceeding 0.25% of the average daily net assets of such Class A shares (for distribution and/or shareholder services), and Class B shares and Class C shares of the Funds each pay GDSI amounts not exceeding 1.00% of the average daily net assets of such Class of shares (0.25% is for shareholder services).
Distribution expenses paid by GDSI may include the costs of marketing, printing and mailing prospectuses and sales literature to prospective investors, advertising, and compensation to sales personnel and broker-dealers as well as payments to broker-dealers for shareholder services. For more information regarding the 12b-1 Plan, please see “Distribution Plan” in the Gartmore SAI.
Administrative Services
The Funds have also adopted an Administrative Services Plan pursuant to which each Fund may pay fees of up to 0.25% of the Class A and the Institutional Service Class shares’ average daily net assets to servicing organizations, such as broker-dealers and financial institutions, who agree to provide certain administrative support services to holders of Class A and Institutional Service Class shares.
Purchases and Redemptions
The Funds are subject to identical sales charge schedules. The maximum front-end sales charge imposed on purchases of Class A shares of the Funds is 5.75%, with reduced sales charges for purchases of $50,000 or more, and no front-end sales charge imposed on purchases of $1 million or more of the Class A shares of the Funds. Although purchases of Class A shares of $1 million or more are sold without a sales charge, unless you are
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otherwise eligible to purchase Class A Shares without a sales charge, you will be charged a contingent deferred sales charge (“CDSC”) if such Class A shares are redeemed within 18 months after purchase. The CDSC on Class A shares is up to 0.50%.
The maximum CDSC imposed on Class B shares of the Funds is 5.00%. This CDSC is reduced, depending on the number of years that you have owned the Class B shares. Class B shares are automatically converted to Class A shares after you have held them for seven years, and the Growth Fund Class B Shares to be delivered to the Large Cap Growth Fund shareholders in the Reorganization will convert to Growth Fund Class A Shares on the same schedule as conversions would have occurred in the absence of the Reorganization. Class C shares of the Funds are subject to both a 1.00% front-end sales charge and a 1% CDSC (if you sell your Class C shares within one year after you purchase them). Institutional Service Class shares are not subject to either a front-end sales charge or a CDSC. Shareholders of the Large Cap Growth Fund will not be charged either a front-end sales charge or a CDSC in connection with the Reorganization.
Each Fund generally requires a minimum initial investment of $2,000 for Class A shares, Class B shares and Class C shares, and subsequent investments must generally be in amounts of at least $100. For Institutional Service Class shares, each Fund requires a minimum initial investment of $50,000 with no minimum for subsequent investments.
You may sell (redeem) your shares in either Fund at any time. You may generally exchange your shares of either Fund for shares of the same class of any other series of the Trust. Because an exchange is technically a sale and purchase of shares, an exchange is a taxable transaction.
Shares of each Fund may be redeemed at their respective net asset value per share (less any applicable CDSC). CDSCs that would normally be applicable upon the redemption of Large Cap Growth Fund Shares will be waived on redemptions of Large Cap Growth Fund Shares made between September 23, 2003 and 4 p.m. Eastern time on the business day immediately preceding the date the Reorganization is completed. Additional information and specific instructions explaining how to buy, sell, and exchange shares of each Fund is contained below under “Buying, Selling and Exchanging Fund Shares”.
Distributions and Taxes
The following information is provided to help you understand the income and capital gains you can earn when owning Fund shares, as well as the federal income taxes you may have to pay on income and gains. The amount of any distributions will vary, and there is no guarantee that either Fund will pay either income dividends or a capital gain distribution. For tax advice regarding your personal tax situation, please speak with your tax adviser.
Each quarter, each Fund distributes any available income dividends to shareholders. Income dividends are taxable at either ordinary income or capital gains tax rates, unless you hold your shares in a qualified tax-deferred plan or account, or are otherwise not subject to federal income tax. The amount and type of income dividends paid to you will be reported on Form 1099, which we will send to you during the tax season each year (unless you hold your shares in a qualified tax-deferred plan or account or are otherwise not subject to federal income tax). For individuals, a portion of the income dividends paid to you may be qualified dividends eligible for taxation at long-term capital gain rates. For corporate shareholders, a portion of each year’s distributions may be eligible for the corporate dividend-received deduction.
Capital gains, if any, realized by each Fund (meaning the excess of gains from sales of portfolio securities over any losses from such sales) will generally be distributed to shareholders annually. You must pay federal income taxes on any capital gains distributed to you, unless you hold your shares in a qualified tax-deferred plan or account or are otherwise not subject to federal income tax. Short-term capital gains are taxable to you as ordinary income. Long-term capital gains are taxable as long-term capital gain no matter how long you have owned your Fund shares. Currently, for individuals, long-term capital gains realized after May 5, 2003 are taxed
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at a maximum rate of 15% (5% for individuals in the 10% and 15% federal income tax rate brackets). The tax status of capital gains distributed to you during the year will be reported on a Form 1099. For more information regarding capital gains tax rates, please speak with your tax adviser.
If you invest in a Fund shortly before it makes a capital gain distribution, you may receive some of your investment back in the form of a taxable distribution.
All income and capital gains distributions will be reinvested in shares of the applicable Fund. If you are a taxable investor, you will be subject to tax on reinvested distributions. You may request in writing a payment in cash if distributions are in excess of $5. If distribution checks (1) are returned and marked as “undeliverable” or (2) remain uncashed for six months, your account will be changed automatically so that all future distributions are reinvested in your account. No interest is paid during the time the check is outstanding.
If you want to change your distribution option, you must notify us by the record date for a dividend or distribution in order for it to be effective for that dividend or distribution.
You may be subject to backup withholding on a portion of your taxable distributions and redemption proceeds unless you provide your correct social security or taxpayer identification number and certify that (1) this number is correct, (2) you are not subject to backup withholding, and (3) you are a U.S. person (including a U.S. resident alien). You may also be subject to withholding if the Internal Revenue Service instructs a Fund to withhold a portion of such distributions and proceeds. When withholding is required, the amount will be 28% of any distributions or proceeds paid.
When you sell your shares in a Fund, you may realize a capital gain or loss, which is subject to federal income tax. For tax purposes, an exchange of your Fund shares for shares of a different Gartmore fund is the same as a sale. For individuals, any long-term capital gains you realize from the sale of Fund shares after May 5, 2003 will be taxed at a maximum rate of 15% (5% for individuals in the 10% and 15% federal income tax rate brackets). Short-term capital gains are taxed as ordinary income. You or your tax adviser should keep track of your purchases, tax basis, sales and any resulting gain or loss. If you do sell Fund shares for a loss, you may be able to use this capital loss to offset any other capital gains you may have.
Distributions declared in December but paid in January are taxable as if they were paid in December. Distributions may be subject to state and local taxes, even if not subject to federal income taxes. State and local tax laws vary; please consult your tax adviser. Non-U.S. investors may be subject to U.S. withholding or estate tax, and are subject to special U.S. tax certification requirements.
REASONS FOR THE REORGANIZATION
Gartmore, as investment adviser to the Trust, evaluates on an on-going basis the manner in which each series of the Trust, including the Funds, is managed and determines whether certain series are meeting the needs of their investors and whether such series should continue to be offered. As a result, Gartmore recently recommended to the Trust’s Board of Trustees, and the Board of Trustees agreed, that because (1) of the size, expense ratio and lack of growth potential of the Large Cap Growth Fund, (2) of the recent efforts to strengthen the portfolio management of the Growth Fund, and (3) the portfolio management of the two Funds is very similar, the Large Cap Growth Fund should be combined with the Growth Fund. As part of its analysis, the Board of Trustees recognized that a larger fund may be able to realize certain potential cost savings that could benefit the shareholders of the Funds if the Reorganization is completed. The Reorganization was also recommended to provide shareholders of the Large Cap Growth Fund with the opportunity to participate in a much larger fund with a substantially lower expense ratio and a strengthened investment management approach that may continue to improve performance.
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The Plan was presented to the Board of Trustees of the Trust at a meeting held on September 18, 2003. At the meeting, the Board of Trustees reviewed the expense ratios of both Funds and the projected expenses of the combined Funds; the comparative investment performance of the Funds; the efforts undertaken by Gartmore over the past year to strengthen the portfolio management processes for the Growth Fund; the compatibility of the investment objectives, policies, restrictions and investments of the Funds; and the tax consequences of the Reorganization. During the course of its deliberations, the Board of Trustees noted that the expenses of the Reorganization will be borne by Gartmore.
The Board of Trustees concluded that the Reorganization is in the best interests of the shareholders of the Large Cap Growth Fund and the Growth Fund, and that no dilution in value would result to the shareholders of either Fund from the Reorganization. The Board of Trustees, including those Trustees who are not “interested persons” (as defined in the 1940 Act), voting separately, unanimously approved the Plan and recommended that shareholders of the Large Cap Growth Fund and the Growth Fund vote to approve the Reorganization.
FOR THE REASONS DISCUSSED ABOVE, THE BOARD OF TRUSTEES OF THE TRUST, ON BEHALF OF EACH FUND, UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PLAN.
If shareholders of either the Large Cap Growth Fund or the Growth Fund do not approve the Plan (that is, if shareholders of both Funds do not approve the Plan), the Reorganization will not take place, and the Board of Trustees will consider other possible courses of action for the Large Cap Growth Fund.
INFORMATION ABOUT THE REORGANIZATION
This is only a summary of the Plan. You should read the actual Plan, which is attached as Exhibit A to this Prospectus/Proxy Statement.
How will the Reorganization be carried out?
If shareholders of the Large Cap Growth Fund and the Growth Fund approve the Plan, the Reorganization will be consummated if certain conditions set out in the Plan are satisfied. These conditions include: the declaration of a distribution by the Large Cap Growth Fund, prior to the Valuation Time (described below), and receipt of an opinion, in form and substance reasonably satisfactory to the Trust, to the effect that the Reorganization is expected to constitute a tax-free reorganization for federal income tax purposes, as described under “What are the tax consequences of the Reorganization?” in this Prospectus/Proxy Statement.
Assuming proper shareholder approval, the Trust will designate a specific time and date for the actual Reorganization to take place. This time and date is referred to as the closing (the “Closing”), which will take place the next business day immediately following the Valuation Time, the time at which the relative value of the Funds and their shares will be measured to determine the number of Growth Fund Shares each Large Cap Growth Fund shareholder is entitled to receive in the Reorganization.
If shareholders of the Large Cap Growth Fund and the Growth Fund approve the Plan at the Meeting, shares of the Large Cap Growth Fund will continue to be offered for sale up to the Valuation Time.
If the shareholders of the Large Cap Growth Fund and the Growth Fund approve the Plan, the Large Cap Growth Fund will deliver to the Growth Fund all of its assets, subject to its liabilities, at the Closing, and shareholders of the Large Cap Growth Fund will receive Growth Fund Shares of the corresponding class.
The stock transfer books of the Large Cap Growth Fund will be permanently closed as of the Valuation Time. The Large Cap Growth Fund will only accept requests for redemption received in proper form before the Valuation Time. Requests received after that time will be considered requests to redeem Growth Fund Shares.
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To the extent permitted by law, the Trust may amend the Plan without shareholder approval. The Trust may also terminate and abandon the Reorganization at any time before or, to the extent permitted by law, after the approval of the Reorganization by shareholders of the Large Cap Growth Fund and the Growth Fund.
Who will pay the expenses of the Reorganization?
The expenses resulting from the Reorganization, including the costs of the solicitation of proxies, will be paid by Gartmore or one of its affiliates.
What are the tax consequences of the Reorganization?
The Reorganization is intended to qualify as a tax-free reorganization for federal income tax purposes under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”). Based on certain assumptions and representations received from the Trust, it is the opinion of Stradley, Ronon, Stevens & Young, LLP, counsel to the Trust, that shareholders of the Large Cap Growth Fund will not recognize any gain or loss for federal income tax purposes as a result of the exchange of their Large Cap Growth Fund Shares for Growth Fund Shares, and that neither the Growth Fund nor its shareholders will recognize any gain or loss upon receipt of the assets, subject to liabilities, of the Large Cap Growth Fund.
One requirement for a tax-free reorganization is that the Growth Fund continue either the Large Cap Growth Fund’s historic business (the business continuity test) or use a significant portion of the Large Cap Growth Fund’s historic business assets in a business (the asset continuity test). In general, the Internal Revenue Service has permitted the sale of up to two-thirds of the securities acquired as part of a reorganization without violating the asset continuity test for tax purposes. Thus, while the Growth Fund currently expects to retain a significant portion of the securities it acquires in connection with the Reorganization and does not currently anticipate that sales involving significant amounts of securities will have to be made before or after the Reorganization to effect a realignment with its principal investment strategies and style, depending upon future market conditions, the Growth Fund reserves the right to sell up to two-thirds of the Large Cap Fund’s portfolio securities. If the Growth Fund exercises such right, the Growth Fund will be subject to the additional costs associated with any such sales, including brokerage commissions that it might not otherwise have incurred.
After the Reorganization, the capital loss carryovers (together with any current year loss and net unrealized depreciation in the value of the assets) of the Large Cap Growth Fund will be subject to an annual limitation for federal income tax purposes. This limitation will result in a significant portion of the capital loss carryovers of the Large Cap Growth Fund, which might otherwise have been utilized to offset future capital gains, to expire unutilized. At October 31, 2002, the Large Cap Growth Fund had the following tax basis capital losses that expire as follows: $10,691,738 (2009); $11,447,752 (2010).
You should recognize that an opinion of counsel is not binding on the Internal Revenue Service (“IRS”) or any court. The Trust will not seek to obtain a ruling from the IRS regarding the tax consequences of the Reorganization. Accordingly, if the IRS sought to challenge the tax treatment of the Reorganization and was successful, neither of which is anticipated, the Reorganization could be treated, in whole or in part, as a taxable sale of assets of the Large Cap Growth Fund, followed by the taxable liquidation of that Fund.
Shareholders will continue to be responsible for tracking the purchase cost and holding period of their shares, and should consult their tax advisers regarding the effect, if any, of the Reorganization in light of their individual circumstances. Shareholders should also consult their tax advisers as to the state and local tax consequences of the Reorganization.
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What should I know about the shares of Growth Fund?
Shareholders of the Large Cap Growth Fund will receive Growth Fund Shares of the corresponding class as follows.
These Growth Fund Shares: | Will be distributed pro rata to the holders of: | |
Growth Fund Class A Shares | Large Cap Growth Fund Class A Shares | |
Growth Fund Class B Shares | Large Cap Growth Fund Class B Shares | |
Growth Fund Class C Shares | Large Cap Growth Fund Class C Shares | |
Growth Fund ISC Shares | Large Cap Growth Fund ISC Shares |
When issued, each Growth Fund Share, like each Large Cap Growth Fund Share, will be fully paid and nonassessable. No personal liability attaches to the ownership of the Growth Fund Shares or the Large Cap Growth Fund Shares. Shares of the Growth Fund will have no preemptive rights and will be transferable upon the books of the Trust. Each share of the Growth Fund, other than the Growth Fund Class B Shares (like the Large Cap Growth Fund Class B Shares), will have no conversion rights. The Growth Fund Shares will be recorded electronically in each shareholder’s account. The Trust will then send a confirmation to each shareholder. The Trust does not issue share certificates.
What is the capitalization of the Funds and what might the capitalization be after the Reorganization?
The following table sets forth, as of April 30, 2003, the capitalization of the Class A Shares, the Class B Shares, the Class C Shares and the ISC Shares of the Large Cap Growth Fund and the Growth Fund. The table also shows the projected capitalization of the Growth Fund Class A Shares, Growth Fund Class B Shares, Growth Fund Class C Shares and Growth Fund ISC Shares as adjusted to give effect to the proposed Reorganization. The capitalization of the Growth Fund and its classes will be different when the Reorganization is consummated.
Large Cap Growth Fund | Growth Fund | Growth Fund— Pro forma | |||||||||
(unaudited) | (unaudited) | (unaudited) (1) | |||||||||
Net assets (millions) (all classes) | $ | 34,996,530 | $ | 274,526,759 | (2) | $ | 309,529,638 | (2) | |||
Total shares outstanding (all classes) | 5,159,523 | 55,026,364 | (2) | 62,122,019 | (2) | ||||||
Class A net assets | $ | 26,634,118 | $ | 5,341,581 | $ | 31,976,355 | |||||
Class A shares outstanding | 3,925,263 | 1,081,691 | 6,475,204 | ||||||||
Class A net asset value per share | $ | 6.79 | $ | 4.94 | $ | 4.94 | |||||
Class B net assets | $ | 1,717,705 | $ | 3,319,699 | $ | 5,037,507 | |||||
Class B shares outstanding | 263,328 | 720,604 | 1,093,465 | ||||||||
Class B net asset value per share | $ | 6.52 | $ | 4.61 | $ | 4.61 | |||||
Class C net assets | $ | 46,916 | $ | 76,857 | $ | 123,776 | |||||
Class C shares outstanding | 7,191 | 16,670 | 26,846 | ||||||||
Class C net asset value per share | $ | 6.52 | $ | 4.61 | $ | 4.61 | |||||
ISC net assets | $ | 6,597,791 | $ | 62,389,612 | $ | 68,988,818 | |||||
ISC shares outstanding | 963,741 | 12,473,640 | 13,792,745 | ||||||||
ISC net asset value per share | $ | 6.85 | $ | 5.00 | $ | 5.00 |
(1) | The pro forma asset balances include adjustments for anticipated expense arrangements, after the Reorganization. The pro forma share balances include adjustments to maintain the net asset value of the Growth Fund, after the Reorganization. |
(2) | These numbers also include net assets and number of shares outstanding attributable to Class D shares of the Growth Fund which are not separately identified in this table. |
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COMPARISON OF INVESTMENT OBJECTIVES, STRATEGIES, POLICIES AND RISKS
This section describes the investment objective and key investment strategies, policies and risks of the Large Cap Growth Fund and the Growth Fund. For more information regarding the Funds’ investment policies and risks, you should read the SAI which relates to this Prospectus/Proxy Statement, is incorporated herein by reference, and includes the Gartmore SAI.
Are there any significant differences between the investment objectives and strategies of the Funds?
The investment objectives of the Large Cap Growth Fund and Growth Fund are identical. Both Funds seek long-term capital appreciation. The investment objective of each Fund is non-fundamental, and thus, may be changed by the Board of Trustees without shareholder approval. Each Fund attempts to achieve its investment objective by investing primarily in securities of large capitalization companies that are expected to have better prospects for earnings growth than other companies in the market. The Large Cap Growth Fund will invest at least 80% of its net assets in equity securities of large capitalization companies while the Growth Fund will primarily invest in common stocks and convertibles of such companies.
How do the types of securities the Funds buy and the principal investment policies of the Funds compare?
The types of securities that may be purchased by the Funds are substantially the same. The Funds invest primarily in equity securities of large capitalization companies that are expected to have better prospects for earnings growth than other companies in the market. Generally each of the Funds is fully invested in accordance with its investment objective and strategies. However, pending investment of cash balances, or if a Fund’s investment adviser or subadviser believes that business, economic, political or financial conditions warrant, a Fund may invest without limit in cash or money market cash equivalents, including: (1) short-term U.S. Government securities; (2) certificates of deposit, bankers’ acceptances, and interest-bearing savings deposits of commercial banks; (3) prime quality commercial paper; (4) repurchase agreements covering any of the securities in which the Fund may invest directly; and (5) subject to regulatory limits, shares of other investment companies that invest in securities in which the Fund may invest. Should this occur, a Fund will not be pursuing its investment objective and may miss potential market upswings.
Each of the Funds is “diversified,” and, as such, 75% of each Fund’s total assets may not be invested in more than 5% of a single issuer’s securities, or be used to purchase 10% or more of the outstanding voting securities of a single issuer.
What are the principal risks associated with an investment in the Funds?
Because the value of an investment in either Fund will fluctuate, there is the risk that you will lose money. Your investment will decline in value if the value of the Fund’s investments decreases. The value of your shares will also be impacted in part by the portfolio manager’s ability to assess economic conditions and investment opportunities.
The risks of investing in the Funds are comparable to the risks presented by investments in growth oriented equity securities, which are:
Stock market risk. The Large Cap Growth Fund and Growth Fund are each subject to the risk that the Fund could lose value if the individual stocks in which the Fund has invested or the overall stock markets in which they trade go down. Individual stocks and the overall stock markets may experience short-term volatility as well as extended periods of decline or little growth.
Individual stocks are affected by factors such as corporate earnings, production, management and sales. Individual stocks may also be affected by the demand for a particular type of stock, such as growth stocks or the stocks of companies with a particular market capitalization or within a particular industry. Stock markets are affected by numerous factors, including interest rates, the outlook for corporate profits, the health of the national
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and world economies, national and world social and political events, and the fluctuations of other stock markets around the world.
Market trends risk. The Large Cap Growth Fund and Growth Fund are both subject to the risk that different types of stocks tend to shift into and out of favor with stock market investors depending on market and economic conditions. For instance, from time to time the stock market may not favor growth-oriented stocks. Rather, the market could favor value stocks or may not favor equity securities at all. Accordingly, because each Fund focuses on growth-style stocks, performance may at times be better or worse than the performance of stock funds that focus on other types of stocks, or that have a broader investment style.
Portfolio turnover risk. The Growth Fund may engage in active and frequent trading of securities if the portfolio manager believes that doing so is in the best interest of the Growth Fund. A higher portfolio turnover rate may result in higher transaction costs for the Growth Fund and increase volatility of the Growth Fund. In addition, a higher portfolio turnover rate may cause a shareholder to have additional tax consequences as a result of owning the Growth Fund.
How do the fundamental investment restrictions of the Funds compare?
The Funds have adopted identical investment restrictions as fundamental policies, which cannot be changed without the approval of the majority of the outstanding voting securities of each Fund. In addition, the Funds are subject to identical, non-fundamental operating investment policies. While these non-fundamental operating policies may be changed by the Board of Trustees without shareholder approval, shareholders would be notified about the implementation of any material changes in the non-fundamental operating policies.
For more information regarding the Funds’ fundamental investment restrictions and non-fundamental operating policies, please refer to the Gartmore SAI, which is incorporated by reference into the SAI relating to this Prospectus/Proxy Statement.
BUYING, SELLING AND EXCHANGING FUND SHARES
What are the differences between the share classes of the Funds?
The Funds offer different share classes to give investors different price and cost options. Class A, Class B and Class C shares of the Funds are available to all investors; ISC shares are available to a limited group of investors. The Growth Fund also offers Class D shares; however, such shares will not be issued in connection with the Reorganization and are therefore not described in this Prospectus/Proxy Statement.
The following sales charges will generally apply:
Front-end Sales Charges when you purchase:
· | Class A shares |
· | Class C shares |
Contingent Deferred Sales Charges (CDSC)(1):
· | Class B shares if you sell your shares within six years of purchase |
· | Class C shares if you sell your shares within one year of purchase |
No Sales Charges on ISC shares.
Sales charges are paid to the Funds’ distributor, GDSI, which either retains them or pays them to a selling representative.
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When choosing a share class, consider the following:
Class A shares | Class B shares | Class C shares | ||
Front-end sales charge means that a portion of your initial investment goes toward the sales charge, and is not invested | No front-end sales charge, so your full investment immediately goes toward buying shares | Front-end sales charge means that a portion of your initial investment goes toward the sales charge and is not invested. Front-end Sales Charge on Class C is lower than Class A Shares | ||
Reductions and waivers of the sales charge available | No reductions of the CDSC available, but waivers available | Like Class B shares, no reductions of the CDSC are available, but waivers are available | ||
Lower expenses than Class B and Class C shares mean higher dividends per share | Higher distribution and service fees than Class A shares mean higher fund expenses and lower dividends per share | Higher distribution and service fees than Class A shares mean higher fund expenses and lower dividends per share | ||
Conversion features are not applicable | After seven years, Class B shares convert into Class A shares, which reduces your future fund expenses | Unlike Class B shares, Class C shares do not automatically convert into another class | ||
No sales charge when shares are sold back to a Fund(1) | CDSC if shares are sold within six years: 5% in the first year, 4% in the second, 3% in the third and fourth years, 2% in the fifth, and 1% in the sixth year | CDSC of 1% is applicable if shares are sold in the first year after purchase | ||
No maximum investment limit | Investments of $250,000 or more may be rejected(2) | Investments of $1,000,000 or more may be rejected(3) |
(1) | A CDSC of up to 0.50% may be charged on certain redemptions of Class A shares purchased without a sales charge and for which a finder’s fee was paid. |
(2) | This limit was calculated based on a seven year holding period. |
(3) | This limit was calculated based on a one year holding period. |
If you want lower annual fund expenses, Class A shares (and ISC shares if you are eligible to purchase them) may be right for you, particularly if you qualify for a reduction or waiver of sales charges. If you do not want to pay a front-end sales charge, and you anticipate holding your shares for the long term, Class B shares may be more appropriate. If you wish to pay a lower front-end sales charge than you would for Class A shares and are uncertain as to how long you may hold your shares, Class C shares may be right for you. The Funds reserve the right to reject an order of $250,000 or more for Class B shares or $1,000,000 or more for Class C shares and an order for Class B shares for Individual Retirement Accounts (IRA accounts) for shareholders 70 1/2 years old and older.
For investors who are eligible to purchase ISC shares, the purchase of such shares will be preferable to purchasing Class A, Class B or Class C shares.
Who can buy ISC shares
ISC shares are available for purchase only by the following:
· | retirement plans introduced by persons not associated with brokers or dealers that are primarily engaged in the retail securities business and rollover individual retirement accounts from such plans |
· | tax-exempt employee benefit plans for which third party administrators provide recordkeeping services and are compensated by the Funds for such services |
· | a bank, trust company or similar financial institution investing for its own account or for the account of its trust customers for whom such financial institution is exercising investment discretion in purchasing ISC shares, where the investment is part of a program that collects an administrative service fee |
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· | registered investment advisers investing on behalf of institutions and high net-worth individuals where the adviser is compensated by the Fund for services it provides |
· | life insurance separate accounts to fund the benefits of variable annuity contracts issued to governmental entities as an investment option under their deferred compensation plans as defined under Section 457 of the Code or qualified plans adopted pursuant to Section 401(a) of the Code. |
How do I buy shares of the Funds?
Purchase price. The purchase or “offering” price of each share of the Funds is its net asset value next determined after the order is received, plus any applicable sales charge. A separate net asset value is calculated for each class of the Funds. Generally, net asset value is based on the market value of the securities owned by a Fund less its liabilities. The net asset value for a class is determined by dividing the total market value of the securities owned by a Fund, allocable to such class, less the liabilities allocated to that class, by the total number of that class’ outstanding shares. Net asset value is determined at the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern Time) on each day the Exchange is open for trading.
The Funds do not calculate net asset value on the following days:
· | New Year’s Day |
· | Martin Luther King, Jr. Day |
· | Presidents’ Day |
· | Good Friday |
· | Memorial Day |
· | Independence Day |
· | Labor Day |
· | Thanksgiving Day |
· | Christmas Day |
· | Other days when the New York Stock Exchange is not open. |
Each Fund reserves the right not to determine net asset value when:
· | It has not received any orders to purchase, sell or exchange shares. |
· | Changes in the value of a Fund’s portfolio do not affect the net asset value. |
If current prices are not available for a security, or if GSA, as the Funds’ administrator, or their agent, determines a price does not represent fair value, each Fund’s investments may be valued at fair value in accordance with procedures adopted by the Board of Trustees. To the extent that a Fund’s investments are traded in markets that are open when the New York Stock Exchange is closed, the value of the Fund’s investments may change on days when shares cannot be purchased or redeemed.
In-kind purchases. The Funds reserve the right to accept payment for shares in the form of securities that are permissible investments for the Funds.
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Minimum Investment—
Class A, B, & C Shares
To open an account (per Fund) | $ | 2,000 | |
To open an IRA account (per Fund) | $ | 1,000 | |
Additional investments (per Fund) | $ | 100 | |
To start an Automatic Asset | |||
Accumulation Plan | $ | 1,000 | |
Additional Automatic Asset | |||
Accumulation Plan Transaction | $ | 50 |
Minimum Investment—
ISC Shares
To open an account (per Fund) | $ | 50,000 | |
Additional investments | None |
If you purchase shares through an account at a broker, different minimum account requirements may apply. These minimum investment requirements do not apply to certain retirement plans or omnibus accounts. Call 1-800-848-0920 for more information.
Front-end Sales Charges
Class A shares
The chart below shows the applicable Class A front-end sales charges, which decrease as the amount of your investment increases.
Sales Charge as a percentage of | Dealer Commission as a percentage of Offering Price | ||||||||
Amount of Purchase | Offering Price | Amount Invested | |||||||
Less than $50,000 | 5.75 | % | 6.10 | % | 5.00 | % | |||
$50,000 to $99,999 | 4.75 | 4.99 | 4.00 | ||||||
$100,000 to $249,999 | 3.50 | 3.63 | 3.00 | ||||||
$250,000 to $499,999 | 2.50 | 2.56 | 2.00 | ||||||
$500,000 to $999,999 | 2.00 | 2.04 | 1.75 | ||||||
$1 million or more | None | None | None |
Class C shares
Sales of Class C shares will be charged a front-end sales charge of 1.00% of the offering price (1.01% of the amount invested).
Class A Purchases not Subject to a Sales Charge
There are no front-end sales charges for purchases of Class A shares of the Funds of $1 million or more. However, unless you are otherwise eligible to purchase Class A shares without a sales charge, you will pay a CDSC of up to 0.50% if you redeem any Class A shares within 18 months of the date of purchase. (See “Contingent deferred sales charge (CDSC) on Class A, Class B and Class C shares” below.) With respect to such purchases, GDSI may pay dealers a finder’s fee of up to 0.50% on investments made in Class A shares with no initial sales charge. The CDSC covers the finder’s fee paid by GDSI to the selling dealer.
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Reduction of Class A sales charges
Shareholders can reduce or eliminate Class A shares’ initial sales charge through one or more of the discounts described below:
· | An increase in the amount of your investment. The above tables show how the sales charge decreases as the amount of your investment increases. |
· | Family Member Discount. Members of your family who live at the same address can combine investments in the funds of Gartmore Mutual Funds and Gartmore Mutual Funds II (the “Gartmore Funds”), possibly reducing the sales charge. |
· | Lifetime Additional Discount. You can add the value of any of the Gartmore Funds’ Class A shares of funds of the Trust you already own with the value of the shares you are purchasing, which may reduce the applicable sales charge. |
· | Insurance Proceeds or Benefits Discount Privilege. If you use the proceeds of an insurance policy issued by any member of Nationwide Insurance to purchase Class A shares, you will pay one-half of the published sales charge if you make your investment 60 days after receiving the proceeds. |
· | No sales charge on a repurchase. If you sell Fund shares from your account, we allow you a one-time privilege to reinvest some or all of the proceeds in shares of the same class. You will not pay a sales charge on Class A shares that you buy within 30 days of selling Class A shares of an equal or lesser amount if you have already paid a sales charge. Remember, if you realize a gain or a loss on your sale of shares, the transaction is taxable and reinvestment will not affect the amount of capital gains tax that is due. If you realize a loss on your sale and you reinvest, some or all of the loss may not be allowed as a tax deduction depending on the amount you reinvest. |
· | Letter of Intent Discount. State in writing that during a 13-month period you or a group of family members who live at the same address will purchase or hold at least $50,000 in Class A shares and your sales charge will be based on the total amount you intend to invest. The letter may be backdated up to 90 days to include previous purchases for determining your sales charge. Your Letter of Intent is not a binding obligation to buy shares of a Fund; it is merely a statement of intent. Call 1-800-848-0920 for more information. |
Waiver of Class A sales charges
The Class A sales charges will be waived for the following purchasers:
· | Any person purchasing through an account with an unaffiliated brokerage firm that has an agreement with GDSI to waive sales charges for those persons. |
· | Directors, officers, full-time employees, sales representatives and their employees or any investment advisory clients of a broker-dealer having a dealer/selling agreement with GDSI. |
· | Any person who pays for the shares with the proceeds of one of the following sales: |
· | Sales of non-Gartmore Fund shares |
· | Sales of Class D shares of a Gartmore Fund if the new fund purchased does not have Class D shares and Class A shares are purchased instead |
· | Employer-sponsored retirement plans, including pension, profit sharing or deferred compensation plans which are qualified under sections 401(a), 403(b) or 457 of the Code. |
· | Trustees and retired Trustees of the Trust (including its predecessor trusts) and Directors and retired Directors of Gartmore Mutual Funds II |
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· | Directors, officers, full-time employees, sales representatives and their employees, and retired directors, officers, employees, and sales representatives, their spouses, children or immediate relatives (including mother, father, brothers, sisters, grandparents and grand-children) and immediate relatives of deceased employees of any member ofNationwide, or any investment advisory clients of GMF, GSA and their affiliates. |
· | Directors, officers, full-time employees, their spouses, children or immediate relatives and immediate relatives of deceased employees of any sponsor group which may be affiliated with Nationwide from time to time (including, but not limited to, Farmland Industries, Inc., Maryland Farm Bureau, Inc., Ohio Farm Bureau Federation, Inc., Pennsylvania Farm Bureau, California Farm Bureau Federation, CHS Cooperatives and Southern States Cooperative, Inc.). |
Additional investors eligible for sales charge waivers may be found in the Gartmore SAI.
Waiver of Class C sales charges
Both the front-end sales charge and the CDSC applicable to Class C shares will be waived for sales to retirement plans offered by Nationwide. In addition, the front-end sales charge applicable to Class C shares will be waived for any person purchasing through an account with an unaffiliated brokerage firm that has an agreement with the Distributor to waive the front-end sales charges for those persons.
Conversion of Class B shares
After you have held your Class B shares for seven years, we will automatically convert them into Class A shares (without charge), which carry the lower 12b-1 fee. We will also convert any Class B shares that you purchased with reinvested dividends and other distributions for those shares at that time. Remember, because the net asset value of Class A shares is usually higher than the net asset value of Class B shares, you may receive fewer Class A shares than the number of Class B shares converted, but the total dollar value will be the same. We do the conversion on the first business day of the month following the seventh anniversary of the date of your purchase.
How to place your purchase order
If you wish to purchase Class A, Class B or Class C shares, you may purchase them using one of the methods described below. When buying shares, be sure to specify the class of shares you wish to purchase. Eligible entities wishing to purchase ISC shares should contact Customer Service at 1-800-848-0920 for more information regarding such purchases.
By mail. Complete and mail the application with a personal check made payable to: Gartmore Funds, P.O. Box 182205, Columbus, Ohio 43218-2205. Payment must be made in U.S. dollars only and drawn on a U.S. bank. The Fund will not accept third-party checks or money orders.
By wire. You can request that your bank transmit funds (federal funds) by wire to the Funds’ custodian bank. In order to use this method, you must call Customer Service at 1-800-848-0920 by 4 p.m. Eastern Time, and the wire must be received by the custodian bank by the close of business on the day you placed your order or your order will be cancelled. You may be liable for any loss to the Fund resulting from the cancellation. Please note that your bank may charge a fee to wire funds. If you choose this method to open your account, you must call our toll-free number before you wire your investment, and you must then complete and fax the application.
By telephone. Call 1-800-848-0920, our automated voice-response system, 24 hours a day, seven days a week, for easy access to mutual fund information. You can choose from a menu of choices to conduct transactions and hear Fund price information, mailing and wiring instructions and other mutual fund information.
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You must complete the appropriate section of the application to use the voice response system to make purchases.
Through an authorized broker. GDSI has relationships with certain brokers and other financial intermediaries who are authorized to accept, or designate intermediaries to accept, purchase and redemption orders for the Fund. If you purchase through such a broker, your order will be priced at the net asset value next determined after your broker or its designated intermediary accepts it. Contact your broker to determine whether it has an established relationship with GDSI.
On-line. Log on to our website www.gartmorefunds.com 24 hours a day, seven days a week, for easy access to your mutual fund accounts. Once you have reached the website, you will be instructed on how to select a password and perform transactions. You can download the Gartmore Prospectuses or receive information on all of our funds as well as your own personal accounts. You may also perform transactions, such as purchases, redemptions and exchanges. The Funds may terminate the ability to buy Fund shares on this website at any time, in which case you may continue to buy shares by mail, wire, telephone or through an authorized broker as described in this Prospectus/Proxy Statement.
Additional shareholder services
Shareholders are entitled to a wide variety of services by contacting:
Gartmore Funds 1-800-848-0920
Our customized voice-response system, available 24 hours a day, seven days a week. Customer Service Representatives are available to answer questions between 8 a.m. and 9 p.m. Eastern Time (Monday through Friday).
To reduce the volume of mail you receive, only one copy of financial reports, prospectuses, other regulatory materials and other communications will be mailed to your household (if you share the same last name and address). You can call us at 1-800-848-0920, or write to us at Gartmore Funds, P.O. Box 182205, Columbus, Ohio 43218-2205, to request (1) additional copies free of charge, or (2) that we discontinue our practice of householding regulatory materials.
For additional information on buying shares and shareholder services, call Customer Service or contact your sales representative.
How do I sell shares of the Funds?
You can sell or, in other words, redeem your shares of the Funds at any time, subject to certain restrictions described below. The price you will receive when you sell your shares will be the net asset value (less any applicable sales charges) next determined after the Funds receive your properly completed order to sell in its offices in Columbus, Ohio. Of course, the value of the shares you sell may be worth more or less than their original purchase price depending upon the market value of the Funds’ investments at the time of the sale. Payment for shares you recently purchased may be delayed up to 10 business days from the date of purchase to allow time for the check to clear.
Generally, we will pay you for the shares that you sell within three days after receiving your order to sell.
The Funds may delay forwarding redemption proceeds for up to seven days if the investor redeeming shares is engaged in excessive trading, or if the amount of the redemption request otherwise would be disruptive to efficient portfolio management, or would adversely affect the Funds.
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Under extraordinary circumstances the Funds may elect to honor your redemption request by transferring some of the securities held by the Funds directly to you. For more information about the Funds’ ability to make such a redemption in kind, see the SAI.
Properly completed orders contain all necessary paperwork to authorize and complete the transaction. The Funds may require all account holder signatures, updated account registration and bank account information and, depending on circumstances, a signature guarantee.
Restrictions on sales
You may not be able to sell your shares of the Funds or the Funds may delay paying you the proceeds from a redemption when the New York Stock Exchange is closed (other than customary weekend and holiday closings) or if trading is restricted or if an emergency exists.
Signature Guarantee—Class A, Class B and Class C shares
A signature guarantee is required under the following circumstances:
· | if your account address has changed within the last 10 business days, or |
· | if the redemption check is made payable to anyone other than the registered shareholder, or |
· | if the proceeds are sent to a bank account not previously designated or changed within the past 10 business days, or |
· | if the proceeds are mailed to any address other than the address of record, or |
· | if the redemption proceeds are being wired to a bank for which instructions are currently not on your account. |
GDSI reserves the right to require a signature guarantee in other circumstances, without notice.
CDSC on Class A, Class B and Class C shares
You must pay a CDSC if you sell Class B shares within six years of purchase, unless you are entitled to a waiver. The sales charge applies if your sale causes the value of Class B shares in your account to fall below the total amount of all purchases of Class B shares you made during the preceding six years. The amount of the sales charge will decrease as illustrated in the following chart:
Sale within | 1 year | 2 years | 3 years | 4 years | 5 years | 6 years | 7 years or more | ||||||||||||||
Sales charge | 5% | 4% | 3% | 3% | 2% | 1% | 0% |
Although you normally pay no CDSC when you redeem Class A shares, you may pay a CDSC at the following rates if you purchase $1,000,000 or more of Class A shares (and therefore pay no initial sales charge) and then redeem all or part of the shares within 18 months after your initial purchase of those shares:
Amount of Purchase | $1 million to $24,999,999 | $25 million or more | ||
Amount of CDSC | 0.50% | 0.25% |
The amount of the CDSC on Class A shares will be determined based on the particular combination of Gartmore Funds purchased. The CDSC for the Funds is described above, but the applicable CDSC for other Gartmore Funds are described in those funds’ prospectus. The applicable CDSC will be determined on a pro rata
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basis according to the amount of the redemption from each particular Gartmore Fund. The Class A CDSC will not exceed the aggregate amount of the finder’s fee GDSI paid to the selling dealer on all purchases of Class A shares of all Gartmore Funds you made that were subject to the Class A CDSC.
With respect to Class C shares, you must pay a CDSC of 1% if you sell your shares within the first year after you purchased the shares.
With respect to the CDSC for all three classes of shares, the CDSC is applied to your original purchase price, or the current market value of the shares being sold, whichever is less. To keep your CDSC as low as possible, each time you place a request to sell shares GDSI will first sell any shares in your account not subject to a CDSC. All purchases during the month are grouped together and will be treated as if made on the last day of the preceding month.
We do not impose a CDSC on Class A, Class B or Class C shares purchased through reinvested dividends and distributions. If you sell your Class B or Class C shares and reinvest the proceeds in Class B or Class C shares within 30 days, the Funds will deposit an amount equal to any CDSC on Class B or Class C shares you paid into your account. We will also waive the CDSC on Class B or Class C if you sell shares following the death or disability of a shareholder, provided the sale occurs within one year of the shareholder’s death or a determination of disability, and for mandatory withdrawals from IRA accounts after age 701/2years. For more information, see the Gartmore SAI.
How to place your sale order
You can request the sale of your Class A, Class B or Class C shares in any of the ways described below. A signature guarantee may be required under certain circumstances. Please refer to the section entitled “Signature Guarantee—Class A, Class B and Class C shares”. Eligible entities wishing to sell ISC shares should contact GDSI at 1-800-848-0920 for information regarding such sales.
By telephone. Calling 1-800-848-0920 connects you to our automated voice-response system, available 24 hours a day, seven days a week, for easy access to mutual fund information. Customer Service Representatives are available 8 a.m. to 9 p.m. Eastern Time, Monday through Friday. You can sell shares and have the check mailed to your address of record, unless you declined this option on your application. Only the following types of accounts can use the voice response system to sell shares: Individual, Joint, Transfer on Death, Trust, and Uniform Gift/Transfer to Minor accounts. You can call 1-800-848-0920 after 7 p.m. Eastern Time to learn the day’s closing share price.
Through our customer service line. Unless you declined the telephone redemption privilege on your application, you can call and request that a check payable to the shareholder of record be mailed to the address of record. The Funds will use procedures to confirm that telephone instructions are genuine. If the Funds act on instructions they reasonably believed were genuine, they will not be liable for any loss, injury, damage or expense that occurs as a result, and the Funds will be held harmless for any loss, claims or liability arising from their compliance with the instructions. The Funds may record telephone instructions to sell shares. The Funds reserve the right to revoke this privilege at any time, without notice to shareholders, and to request the sale in writing, signed by all shareholders on the account.
By bank wire. The Funds can wire the funds directly to your account at a commercial bank (a voided check must be attached to your application), unless you declined telephone privileges on your application. (This authorization will remain in effect until you give the appropriate Fund written notice of its termination.) Your proceeds will be wired to your bank on the next business day after your order to sell shares has been processed. We will deduct a $20 fee from the proceeds of your sale for this service. Your financial institution may also charge you a fee for receiving the wire. Funds sent outside the U.S. may be subject to a higher fee.
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By Automated Clearing House (ACH). Your funds can be sent to your bank via ACH on the second business day after your order to sell has been received by the appropriate Fund (a voided check must be attached to your application). Funds sent through ACH should reach your bank in two business days. There is no fee for this service. (This authorization will remain in effect until you give the appropriate Fund written notice of its termination.)
By mail or fax. Write a letter to Gartmore Funds, P.O. Box 182205, Columbus, Ohio 43218-2205 or fax it to 614-428-3278. Please be sure your letter is signed by all account owners. Be sure to include your account number and the Gartmore Fund from which you wish to make a redemption. For a distribution from an IRA, you must complete an IRA Distribution Form. This form can be obtained by calling 1-800-848-0920 or on our website, www.gartmorefunds.com. Your sale of shares will be processed on the date the Fund receives your signed letter or fax. If your fax is received after 4 p.m. Eastern Time, it will be processed the next business day. The Funds reserve the right to require the original document if you fax your letter.
Through an authorized broker. GDSI has relationships with certain brokers and other financial intermediaries who are authorized to accept, or designate intermediaries to accept, purchase and redemption orders for the Fund. If you have an account with such a broker, your redemption order will be priced at the net asset value next determined after your order has been accepted by your broker or its designated intermediary. Your broker or financial intermediary may charge a fee for this service.
On-line. Log on to our website www.gartmorefunds.com, 24 hours a day, seven days a week, for easy access to your mutual fund accounts. Once you have reached the website, you will be instructed on how to select a password and perform transactions. You can receive information on all of our funds by downloading a prospectus or using other methods as well as information concerning your own personal accounts on-line. You may also perform transactions, such as purchases, redemptions and exchanges. The Fund may terminate the ability to redeem Fund shares on this website at any time, in which case you may continue to sell shares by mail, wire, telephone or through an authorized broker as described in this Prospectus/Proxy Statement.
Accounts with low balances—Class A, Class B and Class C shares
If the value of your Class A, B or C shares of the Fund falls below $2,000 ($1,000 for IRA accounts), we reserve the right to charge a $5 quarterly fee, which is deposited into the Fund to offset the expenses of small accounts. We will sell shares from your account quarterly to cover the fee.
We reserve the right to sell the rest of your shares and close your account if you make a sale that reduces the value of your account to less than $2,000 ($1,000 for IRA accounts). Before the account is closed, we will give you notice and allow you 60 days to purchase additional shares to avoid this action. We do this because of the high cost of maintaining small accounts.
For additional information on selling your shares, call our Customer Service line at 1-800-848-0920 or contact your sales representative.
How do I exchange shares of the Funds into other funds of the Trust?
You can exchange the shares you own for shares of another Gartmore Fund (except the Gartmore Morley Capital Accumulation Fund or any other Gartmore Fund not currently accepting purchase orders) so long as they are the same class of shares, both accounts have the same owner, and your first purchase in the new fund meets the fund’s minimum investment requirement. For example, you can exchange Class A shares of the Funds for Class A shares of any other Gartmore Fund, but you cannot exchange Class A shares for Class B or Class C shares of another fund.
Generally, there is no sales charge for exchanges of Class B, Class C or ISC shares. However, if your exchange involves certain Class A shares, you may have to pay the difference between the sales charges if a
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higher sales charge applies to the fund into which you are exchanging. If you exchange your Class A shares of a Fund that are subject to a CDSC into another Gartmore fund and then redeem those Class A shares within 18 months of the original purchase, the applicable CDSC will be the CDSC for the original Fund. Exchanges into the Prime Shares of the Gartmore Money Market Fund are only permitted from Class A, Class B, Class C and ISC shares of the Funds. If you exchange Class B or Class C shares (or certain Class A shares subject to a CDSC) for Prime Shares of the Gartmore Money Market Fund, the time you hold the shares in the Gartmore Money Market Fund will not be counted for purposes of calculating any CDSC. As a result, if you then sell your Prime Shares of the Gartmore Money Market Fund, you will pay the sales charge that would have been charged if the initial Class B or Class C (or certain Class A) shares had been sold at the time they were originally exchanged into the Gartmore Money Market Fund. If you exchange your Prime Shares of the Gartmore Money Market Fund back into Class B or Class C (or certain Class A) shares, the time you held Class B or Class C (or Class A) shares prior to the exchange to the Gartmore Money Market Fund will be counted for purposes of calculating the CDSC.
How to place your exchange order
You can request an exchange of shares in writing, by fax, by phone, or by on-line access (see “Buying Shares—How to place your purchase order,” above). If you make your request in writing, please be sure all account holders sign the letter. Your exchange will be processed on the date the Funds receive your signed letter or fax. If your fax is received after 4 p.m. Eastern Time, it will be processed the next day. If you fax your request, we reserve the right to ask for the original. You can automatically request an exchange 24 hours a day, seven days a week, by calling our automated voice-response system at 1-800-898-0920, or by logging on to our website at www.gartmorefunds.com. You will have automatic exchange privileges unless you decline this option on your application. The Trust reserves the right to amend or discontinue these exchange privileges upon 60 days’ written notice to shareholders.
Excessive Exchange Activity
The Trust reserves the right to reject any exchange request it believes will increase transaction costs, or otherwise adversely affect other shareholders. Exchanges out of the Funds may be limited to 12 exchanges within a one year period or 1% of a Fund’s net asset value. In addition, certain Gartmore Funds may assess a fee of up to 2.00% on the total value of shares that are redeemed from one of these funds or exchanged out of one of these funds into another Gartmore Fund if the shares of the fund with the exchange fee were held for less than a certain number of days.
The exchange fee is paid directly to the applicable fund and is designed to offset brokerage commissions, market impact and other costs associated with short-term trading of fund shares. For purposes of determining whether the exchange fee applies, the shares that were held the longest will be redeemed first. The exchange fee may not apply in certain circumstances, such as exchanges of shares held in certain omnibus accounts or retirement plans that cannot implement the exchange fee. The fee does not apply to shares purchased through reinvested dividends or capital gains. For more information regarding exchange fees of a specific Gartmore Fund, please review the prospectus of that fund.
How many votes are necessary to approve the Plan?
The affirmative vote of the shareholders holding a majority of the outstanding shares of each of the Large Cap Growth Fund and the Growth Fund is necessary to approve the Plan. A quorum for a Fund at the Meeting is necessary in order to conduct business. A quorum for a Fund will exist at the Meeting if a majority of the
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outstanding shares of beneficial interest outstanding as of the Record Date of that Fund is represented at the Meeting in person or by proxy. Each shareholder will be entitled to one vote for each full share, and a fractional vote for each fractional share, of the Large Cap Growth Fund and the Growth Fund held at the close of business on the Record Date. If sufficient votes to approve the Plan on behalf of either the Large Cap Growth Fund or the Growth Fund, or on behalf of both Funds, are not received by the date of the Meeting, the Meeting may be adjourned to permit further solicitations of proxies of the Large Cap Growth Fund and/or the Growth Fund, as necessary.
Under relevant state law and the Trust’s governing documents, abstentions shall be treated as votes present for purposes of determining whether a quorum exists. Broker non-votes will not be treated as votes present for purposes of determining whether a quorum exists. Broker non-votes are shares for which a broker holding such shares for a beneficial owner has not received instructions from the beneficial owner and may not exercise discretionary voting power with respect thereto, although such broker may have been able to vote such shares on other matters at the Meeting, if any, for which it has discretionary authority or instructions from the beneficial owner. As a result, broker non-votes will have the same effect as a vote against the Plan.
How do I ensure my vote is accurately recorded?
You can vote in any one of the following ways:
· | By mail, with the enclosed proxy card. |
· | In person at the Meeting. |
· | Through DF King, a proxy solicitor, by calling toll-free 1-800-714-3305. |
A proxy card is, in essence, a ballot. If you simply sign and date the proxy but give no voting instructions, your shares will be voted “FOR” the Plan and in accordance with the views of management upon any other matters that may come before the Meeting or adjournment of the Meeting.
Can I revoke my proxy/voting instructions?
You may revoke your proxy at any time before it is voted by sending a written notice to the Trust expressly revoking your proxy, by signing and forwarding to the Trust a later-dated proxy, or by attending the Meeting and voting in person.
Variable contract owners may revoke previously submitted voting instructions given to Nationwide at any time prior to the Meeting by: (i) submitting to Nationwide subsequently dated voting instructions; (ii) delivering to Nationwide a written notice of revocation; or (iii) otherwise giving notice of revocation at the Meeting. In all cases, any action to revoke voting instructions must be taken before the authority granted in the voting instruction form is exercised.
What other matters will be voted upon at the Meeting?
The Board of Trustees does not intend to bring any matters before the Meeting other than those described in this Prospectus/Proxy Statement. The Board is not aware of any other matters to be brought before the Meeting. If any other matter legally comes before the Meeting, proxies which have granted the designated persons discretion will be voted in accordance with the views of management.
Shareholders of record on the Record Date are entitled to one vote for each share and a proportionate fractional vote for any fraction of a share as to each issue on which such shareholders are entitled to vote. The
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following table sets forth the number of shares of beneficial interest of each class of the Funds that were outstanding as of the Record Date and are therefore entitled to vote at the Meeting:
Fund | Shares Outstanding | |
Large Cap Growth Fund | ||
Class A | ||
Class B | ||
Class C | ||
ISC | ||
Growth Fund | ||
Class A | ||
Class B | ||
Class C | ||
Class D | ||
ISC |
What other solicitations will be made?
The Trust will request broker-dealer firms, custodians, nominees and fiduciaries to forward proxy material to the beneficial owners of the shares of record. The Trust may reimburse broker-dealer firms, custodians, nominees and fiduciaries for their reasonable expenses incurred in connection with such proxy solicitation. In addition to solicitations by mail, officers and employees of the Trust, without extra pay, may conduct additional solicitations by telephone, personal interviews and other means. The Trust, on behalf of the Large Cap Growth Fund and the Growth Fund, may engage DF King to assist in soliciting proxies/voting instructions by telephone or other means. It is anticipated that the cost of engaging DF King will be between $3,000 and $14,000, which will be paid by Gartmore or one of its affiliates.
Neither shareholders of the Large Cap Growth Fund nor shareholders of the Growth Fund will be entitled to any “dissenters’ rights,” because the proposed Reorganization involves two series of an open-end investment company registered under the 1940 Act. Although no dissenters’ rights are available, shareholders retain the right to redeem their shares at net asset value until the Closing Date. After the Closing Date, shareholders may redeem their shares of the Growth Fund, or may exchange the shares of the Growth Fund that the shareholders received for shares of other series of the Trust, subject to the terms in the prospectus of the fund whose shares are being acquired.
MORE INFORMATION ABOUT THE TRUST
The Large Cap Growth Fund and the Growth Fund are separate series of the Trust, which is an open-end management investment company registered with the SEC under the 1940 Act. Additional information about the Trust and each Fund, as well as the other series of the Trust, is contained in the Gartmore Prospectuses, the Gartmore SAI, the Annual Reports and the Semi-Annual Reports. These documents have been filed with the SEC, and (except for the Gartmore Prospectuses) are incorporated by reference into the SAI relating to this Prospectus/Proxy Statement.
The Trust files proxy materials, reports and other information with the SEC in accordance with the informational requirements of the Securities Exchange Act of 1934 and the 1940 Act. These materials can be inspected and copied at: the SEC’s Public Reference Room at 450 Fifth Street NW, Washington, DC 20549. Also, copies of such material can be obtained from the SEC’s Public Reference Room, 450 Fifth Street, N.W., Washington, DC 20549 (duplicating fee required), or from the SEC’s Internet address at http://www.sec.gov. To
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request information regarding the Trust and the Funds, you may also send an e-mail to the SEC at publicinfo@sec.gov.
The Trust has noncumulative voting rights. This gives the holders of more than 50% of the shares voting the ability to elect 100% of the trustees. The Trust does not routinely hold shareholders’ meetings. The Trust is not required, and does not intend, to hold regular annual meetings of shareholders. The Trust may hold special or annual shareholder meetings for matters requiring shareholder approval. Shareholders wishing to submit proposals for consideration for inclusion in a proxy for the next meeting of shareholders of the Trust (if any) should send the written proposals to the Trust at 1200 River Road, Conshohocken, Pennsylvania 19428, Attn: Secretary, so that they are received within a reasonable time before such meeting.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
From time to time, the number of shares of the Large Cap Growth Fund and the Growth Fund held in the “street name” accounts of various securities dealers for the benefit of their clients or in centralized securities depositories may exceed 5% of the total shares outstanding. As of the Record Date, to the Trust’s knowledge, the following are the only other persons who had or shared voting or investment power over more than 5% of the outstanding shares of the Funds:
Fund | Name and Address of Shareholder | Number of Shares Beneficially Owned | Percentage of Class/Fund Owned | |||
Large Cap Growth Fund | ||||||
Class A | Nationwide Life Insurance Company(1) PO Box 182029 Columbus, Ohio 43218-2029 | |||||
Class B | ||||||
Class C | ||||||
Institutional Service Class | ||||||
Growth Fund | ||||||
Class A | ||||||
Class B | ||||||
Class C | ||||||
Class D | ||||||
Institutional Service Class |
(1) | Gartmore has been advised that, National Association of Counties, which owns approximately [ ]% of the shares of the Large Cap Growth Fund, intends to withdraw its investment in the Large Cap Growth Fund shortly prior to the Reorganization. |
As of the Record Date, the officers and Trustees of the Trust, as a group, owned less than 1% of the outstanding voting shares of any class of the Large Cap Growth Fund, and owned less than 1% of the outstanding voting shares of any class of the Growth Fund.
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Useful Terms and Definitions
BISYS—BISYS Fund Services, Inc., subadministrator and sub-transfer agent for the Funds.
Gartmore—Gartmore Mutual Fund Capital Trust, the Funds’ investment adviser.
Gartmore Funds—the funds or series of Gartmore Mutual Funds and Gartmore Mutual Funds II.
GDSI—Gartmore Distribution Services, Inc., the principal underwriter for the Funds and an indirect subsidiary of Gartmore Global Investments, Inc.
GGAMT—Gartmore Global Asset Management Trust, a Pennsylvania business trust and a wholly-owned subsidiary of Nationwide Corporation. GGAMT is the indirect parent company of GGI.
GGI—Gartmore Global Investments, Inc., a holding company which is the owner of Gartmore.
GISI—Gartmore Investors Services, Inc., the transfer agent and dividend disbursing agent for the Funds.
Goldman Sachs—Goldman Sachs & Co., a company with investment adviser subsidiaries, including GSAM.
GSA—Gartmore S.A. Capital Trust, the administrator for the Funds and a subsidiary of GGI.
GSAM—Goldman Sachs Asset Management, L.P., a registered investment adviser and subsidiary of Goldman Sachs and the subadviser currently selected by Gartmore to manage the Large Cap Growth Fund on a day-to-day basis.
Nationwide—Nationwide Life Insurance Company, Nationwide Life and Annuity Insurance Company and their affiliated insurance companies.
The Trust—Gartmore Mutual Funds, an Ohio business trust.
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PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION (the “Plan”), is made by Gartmore Mutual Funds, a business trust created under the laws of the State of Ohio, with its principal place of business at 1200 River Road, Conshohocken, Pennsylvania 19428 (the “Trust”), as of September 18, 2003, on behalf of two of the Trust’s series, the Gartmore Growth Fund (the “Growth Fund”) and the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund,” and together with the Growth Fund, the “Funds”).
Background Information
The reorganization of the Large Cap Growth Fund with and into the Growth Fund (the “Reorganization”) shall consist of
(i) the acquisition by the Growth Fund of all of the property, assets and goodwill, subject to the liabilities, of the Large Cap Growth Fund, in exchange solely for Class A shares of beneficial interest, without par value, of the Growth Fund (the “Growth Fund Class A Shares”), Class B shares of beneficial interest, without par value, of the Growth Fund (the “Growth Fund Class B Shares”), Class C shares of beneficial interest, without par value, of the Growth Fund (the “Growth Fund Class C Shares”), and Institutional Service Class shares of beneficial interest, without par value, of the Growth Fund (the “Growth Fund ISC Shares”) (the Growth Fund Class A Shares, the Growth Fund Class B Shares, the Growth Fund Class C Shares and the Growth Fund ISC Shares are collectively referred to as the “Growth Fund Shares”);
(ii) the distribution of (a) the Growth Fund Class A Shares to the holders of Class A shares of the Large Cap Growth Fund (the “Large Cap Growth Fund Class A Shares”), (b) the Growth Fund Class B Shares to the holders of Class B shares of the Large Cap Growth Fund (the “Large Cap Growth Fund Class B Shares”), (c) the Growth Fund Class C Shares to the holders of Class C shares of the Large Cap Growth Fund (the “Large Cap Growth Fund Class C Shares”), and (d) the Growth Fund ISC Shares to the holders of Institutional Service Class shares of the Large Cap Growth Fund (the “Large Cap Growth Fund ISC Shares”) (the Large Cap Growth Fund Class A Shares, the Large Cap Growth Fund Class B Shares, the Large Cap Growth Fund Class C Shares and the Large Cap Growth Fund ISC Shares are collectively referred to as the “Large Cap Growth Fund Shares”), according to their respective interests; and
(iii) the subsequent dissolution of the Large Cap Growth Fund, as soon as practicable after the closing (as defined in Section 3, hereinafter called the “Closing”), all upon and subject to the terms and conditions of the Plan set forth below.
Statement of Plan
The Plan shall be consummated in accordance with, and is subject to, the following terms and conditions:
Section 1. Sale and Transfer of Assets, Liquidation and Dissolution of the Large Cap Growth Fund.
(a) Subject to the terms and conditions of the Plan, the Trust, on behalf of the Large Cap Growth Fund, shall sell, convey, transfer and deliver to the Growth Fund at the Closing all of the Large Cap Growth Fund’s then existing assets (including cash, dividends or interest receivables and any deferred or prepaid expenses), subject to the liabilities (as described more fully below) of the Large Cap Growth Fund (hereinafter called the “Net Assets”). Prior to the Closing Date, the Large Cap Growth Fund will endeavor to discharge or cause to be discharged, or make provision for the payment of, all of its known liabilities and obligations. The Growth Fund shall acquire the Net Assets subject to all liabilities, expenses, costs, charges and reserves of the Large Cap Growth Fund, contingent or otherwise, including liabilities reflected in any unaudited statement of assets and liabilities of the Large Cap Value Fund as of the Valuation Time (as defined in Section 2), prepared by or on
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behalf of the Trust as of the Valuation Time in accordance with generally accepted accounting principles consistently applied from and after October 31, 2003.
(b) Subject to the terms and conditions of the Plan, the Trust, on behalf of the Growth Fund, shall, at the Closing, deliver to the Large Cap Growth Fund:
(i) the number of the Growth Fund Class A Shares, determined by dividing the net asset value per share of the Large Cap Growth Fund Class A Shares by the net asset value per share of the Growth Fund Class A Shares, and multiplying the result thereof by the number of outstanding Large Cap Growth Fund Class A Shares, all as of the Valuation Time;
(ii) the number of the Growth Fund Class B Shares, determined by dividing the net asset value per share of the Large Cap Growth Fund Class B Shares by the net asset value per share of the Growth Fund Class B Shares, and multiplying the result thereof by the number of outstanding Large Cap Growth Fund Class B Shares, all as of the Valuation Time;
(iii) the number of the Growth Fund Class C Shares, determined by dividing the net asset value per share of the Large Cap Growth Fund Class C Shares by the net asset value per share of the Growth Fund Class C Shares, and multiplying the result thereof by the number of outstanding Large Cap Growth Fund Class C Shares, all as of the Valuation Time; and
(iv) the number of the Growth Fund ISC Shares, determined by dividing the net asset value per share of the Large Cap Growth Fund ISC Shares by the net asset value per share of the Growth Fund ISC Shares, and multiplying the result thereof by the number of outstanding Large Cap Growth Fund ISC Shares, all as of the Valuation Time.
All such values shall be determined in the manner and as of the time set forth in Section 2 hereof.
(c) As soon as practicable following the Closing, the Trust shall dissolve the Large Cap Growth Fund and distribute pro rata to the shareholders of record of the Large Cap Growth Fund Shares, as of the Closing Date (as defined in Section 3), the Growth Fund Shares received by the Large Cap Growth Fund pursuant to this Section 1. Such dissolution and distribution shall be accomplished by the establishment of accounts on the share records of the Growth Fund of the type and in the amounts due shareholders of the Large Cap Growth Fund based on their respective holdings as of the Valuation Time. Fractional Growth Fund Shares shall be carried to the fourth decimal place.
Section 2. Valuation.
(a) The value of the Large Cap Growth Fund Shares’ Net Assets to be acquired by the Growth Fund hereunder shall be computed as of the earlier of (i) 4:00 p.m., Eastern time, or (ii) the close of regular trading on the New York Stock Exchange (“NYSE”), on the business day immediately preceding the Closing Date (the “Valuation Time”), using the valuation procedures set forth in the Large Cap Growth Fund’s currently effective prospectus and statement of additional information.
(b) The net asset value of each Large Cap Growth Fund Share shall be determined to the nearest [full cent] as of the Valuation Time, using the valuation procedures set forth in the Large Cap Growth Fund’s currently effective prospectus and statement of additional information.
(c) The net asset value of each Growth Fund Share shall be determined to the nearest [full cent] as of the Valuation Time, using the valuation procedures set forth in the Growth Fund’s currently effective prospectus and statement of additional information.
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Section 3. Closing and Closing Date.
The Closing Date shall be December 22, 2003, or such later date as determined by the Trust’s officers. The Closing shall take place at the principal offices of the Trust at 8:30 a.m., Eastern time, on the Closing Date. The Trust, on behalf of the Large Cap Growth Fund, shall provide for delivery as of the Closing those Net Assets of the Large Cap Growth Fund to be transferred to the account of the Growth Fund at the Trust’s custodian, JP Morgan Chase Bank, 270 Park Avenue, New York, New York 10017. Also, the Trust, on behalf of the Large Cap Growth Fund, shall have prepared and have available at the Closing a list of names and addresses of the holders of record of the Large Cap Growth Fund Shares and the number of Large Cap Growth Fund Shares, by class, owned by each such shareholder, all as of the Valuation Time, certified by the Trust’s transfer agent or by the Treasurer of the Trust to the best of its or his knowledge and belief. The Trust, on behalf of the Growth Fund, shall issue and deliver the Growth Fund Shares to be delivered pursuant to the Plan to the holders of Large Cap Growth Fund Shares on a share deposit receipt registered in the name of the Large Cap Growth Fund or shall have otherwise prepared satisfactory evidence that such Growth Fund Shares have been registered in an account on the books of the Growth Fund in such manner as the officers of the Trust, on behalf of the Large Cap Growth Fund, shall deem appropriate.
Section 4. Declarations by the Trust on behalf of the Funds.
The Trust makes the following declarations regarding and on behalf of each Fund:
(a) Each Fund is a series of the Trust, a business trust created under the laws of the State of Ohio on October 30, 1997, and that is validly existing under the laws of that State. The Trust is duly registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, management investment company; such registration is in full force and effect as of the date hereof and will be in full force and effect as of the Closing; and all of the shares of the Funds sold to date were sold pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the “1933 Act”), except for those shares sold pursuant to the private offering exemption for the purpose of raising the initial capital or for securing initial shareholder approvals.
(b) The Trust is authorized to issue an unlimited number of shares of beneficial interest of each Fund, without par value, each outstanding share of which is validly issued, fully paid, non-assessable, and freely transferable and has full voting rights. The Trust is authorized to issue five classes of shares of the Growth Fund: Class A, Class B, Class C, Class D and Institutional Service Class shares. An unlimited number of shares of beneficial interest, without par value, has been allocated and designated to each of these five classes. The Trust is authorized to issue four classes of shares of the Large Cap Growth Fund: Class A, Class B, Class C and Institutional Service Class shares. An unlimited number of shares of beneficial interest, without par value, has been allocated and designated to each of these four classes.
(c) The financial statements appearing in the Trust’s Annual Reports to Shareholders for the fiscal year ended October 31, 2002, audited by PricewaterhouseCoopers LLP, and in the Trust’s Semi-Annual Reports to Shareholders for the period ended April 30, 2003, fairly present the financial position of the Funds as of such dates and the results of their operations for the periods indicated in conformity with generally accepted accounting principles applied on a consistent basis.
(d) The books and records of the Funds accurately summarize, in all material respects, the accounting data represented and contain no material omissions with respect to the business and operations of the Funds.
(e) The Trust has the necessary power and authority to conduct the Funds’ business as such business is now being conducted.
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(f) The Trust, on behalf of the Funds, is not a party to or obligated under any provision of its Amended Declaration of Trust (the “Declaration of Trust”) or Amended By-laws (the “By-laws”), or any contract or any other commitment or obligation, and is not subject to any order or decree, that would be violated by its performance of its obligations under the Plan.
(g) The Trust has elected to treat each Fund as a regulated investment company (“RIC”) for federal income tax purposes under Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and each Fund has qualified as a RIC for each taxable year since its inception. Consummation of the transactions contemplated by the Plan shall not cause either Fund to fail to be so qualified as a RIC, and each Fund shall qualify as a RIC as of the Closing.
(h) At the Closing, each Fund shall have good and marketable title to all of its then existing securities and other assets, free and clear of all liens or encumbrances of any nature whatsoever, except such imperfections of title or encumbrances as do not materially detract from the value or use of the assets subject thereto, or materially affect title thereto, except, however, to the extent that the Net Assets of the Large Cap Growth Fund are subject to any liabilities pursuant to Section 1(a) above.
(i) Except as disclosed in the Trust’s currently effective prospectuses relating to the Funds, there are no material suits, judicial actions, or legal, administrative or other proceedings or investigations pending or threatened against either of the Funds.
(j) There are no known actual or proposed deficiency assessments with respect to any taxes payable by either of the Funds.
(k) The adoption of, and the performance of the transactions contemplated by, the Plan have been duly and validly authorized by all necessary action of the Trust’s Board of Trustees.
(l) The Trust anticipates that consummation of the transactions contemplated by the Plan shall not cause either of the Funds to fail to conform to the requirements of Subchapter M of the Code for federal income taxation as a RIC at the end of each Fund’s then current fiscal year.
Section 6. Intentions of the Trust on behalf of the Funds.
(a) The Trust intends to continue to operate each Fund’s respective business, as it is presently conducted, between the date hereof and the Closing.
(b) The Trust intends that the Large Cap Growth Fund shall not acquire the Growth Fund Shares for the purpose of making distributions thereof to anyone other than the Large Cap Growth Fund’s shareholders.
(c) The Trust, on behalf of the Large Cap Growth Fund, intends, if the transactions contemplated by the Plan are consummated, to liquidate and dissolve promptly the Large Cap Growth Fund.
(d) The Trust intends that, by the Closing Date, all of the Funds’ Federal and other tax returns and reports required by law to be filed on or before such date shall have been filed, and all Federal and other taxes shown as due on said returns shall have either been paid or adequate liability reserves shall have been provided for the payment of such taxes.
(e) The Trust intends to mail to each shareholder of record of the Funds entitled to vote at the meeting of their shareholders at which action on the Plan is to be considered, in sufficient time to comply with requirements as to notice thereof, a combined Prospectus/Proxy Statement that complies in all material respects with the applicable provisions of Section 14(a) of the Securities Exchange Act of 1934, as amended, the 1933 Act, and Section 20(a) of the 1940 Act, and the rules and regulations, respectively, thereunder.
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(f) The Trust intends to file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form N-14 under the 1933 Act relating to the Growth Fund Shares issuable hereunder (the “Registration Statement”), and shall use its best efforts to cause the Registration Statement to become effective as promptly as practicable. At the time it becomes effective, the Registration Statement shall: (i) comply in all material respects with the applicable provisions of the 1933 Act, and the rules and regulations promulgated thereunder; and (ii) not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the time the Registration Statement becomes effective, at the time of the meeting of the shareholders of the Large Cap Growth Fund and the Growth Fund, and at the Closing Date, the prospectus and statement of additional information included in the Registration Statement will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Section 7. Conditions Precedent to be Fulfilled by the Trust on Behalf of the Funds.
The consummation of the Plan hereunder shall be subject to the following conditions:
(a) (i) All the declarations contained herein shall be true and correct as of the Closing, with the same effect as though made as of and at such date; (ii) the performance of all obligations required under the Plan to be performed by the Trust on behalf of the Funds shall occur at or have occurred prior to the Closing; and (iii) the Trust shall execute a certificate signed by the Treasurer and by the Secretary or equivalent officer to the foregoing effect.
(b) The Plan shall have been adopted and approved by the appropriate action of the Board of Trustees of the Trust on behalf of each Fund.
(c) The SEC shall not have issued an unfavorable advisory report under Section 25(b) of the 1940 Act or instituted or threatened to institute any proceeding seeking to enjoin consummation of the Plan under Section 25(c) of the 1940 Act. Further, no other legal, administrative or other proceeding shall have been instituted or threatened that would materially affect the financial condition of the Large Cap Growth Fund or the Growth Fund or would prohibit the transactions contemplated hereby.
(d) The Plan shall have been adopted and approved by the appropriate action of the shareholders of the Large Cap Growth Fund and the Growth Fund at a special meeting of shareholders.
(e) A distribution or distributions shall have been declared for the Large Cap Growth Fund, prior to the Closing Date that, together with all previous distributions, shall have the effect of distributing to the shareholders of the Large Cap Growth Fund: (i) all of its net investment income and all of its net realized capital gains, if any, for the period from the close of its last fiscal year to the Valuation Time; and (ii) any undistributed net investment income and net realized capital gains from any period to the extent not otherwise declared for distribution.
(f) There shall be delivered to the Trust, on behalf of the Funds, an opinion from Stradley, Ronon, Stevens & Young, LLP, counsel to the Trust, to the effect that, provided the transactions contemplated hereby are carried out in accordance with the Plan and Ohio law, and based upon certificates of the officers of the Trust with regard to matters of fact:
(1) The acquisition by the Growth Fund of all the assets of the Large Cap Growth Fund, subject to liabilities, as provided for herein, in exchange for the Growth Fund Shares, followed by the distribution by the Large Cap Growth Fund to its shareholders of the Growth Fund Shares in complete liquidation of the Large Cap Growth Fund, will qualify as a reorganization within the meaning of Section 368(a)(1)(C) of the Code, and the Large Cap Growth Fund and the Growth Fund will each be a party to the reorganization within the meaning of Section 368(b) of the Code;
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(2) No gain or loss will be recognized by the Large Cap Growth Fund upon the transfer of all of its assets, subject to liabilities, to the Growth Fund in exchange solely for voting shares of the Growth Fund, pursuant to Sections 361(a) and 357(a) of the Code;
(3) No gain or loss will be recognized by the Growth Fund upon the receipt of all of the assets of the Large Cap Growth Fund, subject to liabilities, in exchange solely for voting shares of the Growth Fund, pursuant to Section 1032(a) of the Code;
(4) The basis of the assets of the Large Cap Growth Fund received by the Growth Fund will be the same as the basis of such assets to the Large Cap Growth Fund immediately prior to the exchange of all of the assets of the Large Cap Growth Fund, subject to liabilities, for voting shares of the Growth Fund, pursuant to Section 362(b) of the Code;
(5) The holding period of the assets of the Large Cap Growth Fund received by the Growth Fund will include the period during which such assets were held by the Large Cap Growth Fund, pursuant to Section 1223(2) of the Code;
(6) No gain or loss will be recognized to the holders of the Large Cap Growth Fund Shares upon the exchange of their shares in the Large Cap Growth Fund for voting shares of the Growth Fund, pursuant to Section 354(a) of the Code;
(7) The basis of the Growth Fund Shares received by the holders of the Large Cap Growth Fund Shares shall be the same as the basis of the Large Cap Growth Fund Shares exchanged therefor, pursuant to Section 358(a)(1) of the Code;
(8) The holding period of the Growth Fund Shares received by holders of the Large Cap Growth Fund Shares (including fractional shares to which they may be entitled) will include the holding period of the Large Cap Growth Fund Shares surrendered in exchange therefor, provided that the Large Cap Growth Fund Shares were held as a capital asset on the Closing Date of the exchange, pursuant to Section 1223(1) of the Code; and
(9) The Growth Fund will succeed to and take into account as of the date of the proposed transfer, the items of the Large Cap Growth Fund described in Section 381(c) of the Code (as defined in Section 1.381(b)-1(b) of the Income Tax Regulations), subject to the conditions and limitations specified in Sections 381(b) and (c), 382, 383 and 384 of the Code and the Income Tax Regulations thereunder.
(g) There shall be delivered to the Trust, on behalf of the Funds, an opinion in form and substance reasonably satisfactory to it from Stradley, Ronon, Stevens & Young, LLP, counsel to the Trust with respect to the Funds, to the effect that, subject in all respects to the effects of bankruptcy, insolvency, arrangement among creditors, moratorium, fraudulent transfer or conveyance, and other similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles:
(1) Each Fund is a duly designated series of the Trust, and the Trust is a validly existing business trust under the laws of the State of Ohio;
(2) The Trust is authorized to issue an unlimited number of shares of beneficial interest of the Growth Fund, without par value, and that the Growth Fund Shares to be delivered to the Large Cap Growth Fund as provided for by the Plan, are duly authorized and upon delivery will be validly issued and will be fully paid and non-assessable by the Trust and no shareholder of the Trust has any preemptive right to subscription or purchase in respect thereof;
(3) The Trust is an open-end investment company of the management type registered as such under the 1940 Act;
(4) Except as disclosed in the Funds’ currently effective prospectuses, such counsel does not know of any material suit, action, or legal or administrative proceeding pending or threatened against the Funds, the unfavorable outcome of which would materially and adversely affect the Funds;
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(5) All actions required to be taken by the Trust to authorize the Plan and to effect the transactions contemplated by the Plan have been duly authorized by all necessary action on the part of the Trust and the Funds; and
(6) To such counsel’s knowledge, the performance by the Trust of its obligations under the Plan does not violate any provision of the Declaration of Trust or By-laws, or the provisions of any agreement or other instrument known to such counsel to which the Trust is a party or by which the Trust is otherwise bound; and the Plan has been duly and validly authorized.
In giving the opinions set forth above, this counsel may state that it is relying on certificates of the officers of the Trust with regard to matters of fact, and certain certifications and written statements of governmental officials with respect to the existence of the Trust.
(h) The Trust’s Registration Statement with respect to the Growth Fund Shares to be delivered to the shareholders of the Large Cap Growth Fund in accordance with the Plan shall have become effective, and no stop order suspending the effectiveness of the Registration Statement, or any amendment or supplement thereto, shall have been issued prior to the Closing Date or shall be in effect at Closing, and no proceedings for the issuance of such an order shall be pending or threatened on that date.
(i) The Growth Fund Shares to be delivered hereunder shall be eligible for sale by the Trust in each state or jurisdiction where such eligibility is required in order to permit the Growth Fund Shares lawfully to be delivered to each holder of the Large Cap Growth Fund Shares.
Section 8. Expenses.
The expenses of entering into and carrying out the provisions of the Plan shall be borne by Gartmore Mutual Fund Capital Trust or one of its affiliates, but not by either Fund or their shareholders.
Section 9. Termination; Postponement; Waiver; Order.
(a) Anything contained in the Plan to the contrary notwithstanding, the Plan may be terminated and the transactions contemplated by the Plan abandoned at any time (whether before or after approval thereof by the shareholders of the Large Cap Growth Fund and the Growth Fund) prior to the Closing, or the Closing may be postponed by the Trust, by resolution of the Board of Trustees of the Trust, if circumstances develop that, in the opinion of the Board, make proceeding with the Plan inadvisable.
(b) If the transactions contemplated by the Plan have not been consummated by September 18, 2005, the Plan shall automatically terminate on that date, unless a later date is established by the Board of Trustees of the Trust.
(c) In the event of termination of the Plan pursuant to the provisions hereof, the same shall become void and have no further effect, and neither the Trust, the Funds nor the Trust’s trustees, officers, or agents or the shareholders of the Funds shall have any liability in respect of the Plan.
(d) At any time prior to the Closing, any of the terms or conditions of the Plan may be waived by the Board of Trustees of the Trust, if, in the judgment of the Board of Trustees, such action or waiver will not have a material adverse effect on the benefits intended under the Plan to the shareholders of either Fund.
(e) The declarations contained in Section 4 hereof shall expire with and be terminated by the consummation of the transactions contemplated by the Plan, and neither the Trust nor any of its officers, trustees, agents or shareholders nor the Funds nor any of their shareholders shall have any liability with respect to such declarations after the Closing.
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SELECTED DATA FOR EACH SHARE OF CAPITAL OUTSTANDING
The following tables are intended to help you understand each Fund’s financial performance for the past five years (or life of the Fund if shorter than five years). Certain information reflects financial results for a single Fund share. The total return in the tables represents the rate that an investor would have earned (or lost) on an investment in the particular Fund, assuming reinvestment of all dividends and distributions. This information for the periods ended October 31, has been audited by PricewaterhouseCoopers LLP, whose report, along with the Funds’ financial statements, are included in the Annual Reports, which are available upon request. The information for the six month period ended April 30, 2003 has not been audited.
Selected Data for Each Share of Capital Outstanding
Gartmore Growth Fund
Investment Activities | Distributions | |||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (loss) | Net Realized and Unrealized Gains (losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | |||||||||||||
Class A Shares | ||||||||||||||||||
Period Ended October 31, 1998 (c) | $ | 16.51 | (0.02 | ) | (0.47 | ) | (0.49 | ) | — | — | ||||||||
Year Ended October 31, 1999 | $ | 16.02 | 0.01 | 2.64 | 2.65 | (0.01 | ) | (0.31 | ) | |||||||||
Year Ended October 31, 2000 | $ | 18.35 | (0.08 | ) | (0.84 | ) | (0.92 | ) | — | (2.44 | ) | |||||||
Year Ended October 31, 2001 | $ | 14.99 | (0.05 | ) | (5.85 | ) | (5.90 | ) | — | (3.20 | ) | |||||||
Year Ended October 31, 2002 | $ | 5.89 | (0.02 | ) | (1.13 | ) | (1.15 | ) | — | — | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 4.74 | — | 0.20 | 0.20 | — | — | |||||||||||
Class B Shares | ||||||||||||||||||
Period Ended October 31, 1998 (c) | $ | 16.51 | (0.04 | ) | (0.49 | ) | (0.53 | ) | — | — | ||||||||
Year Ended October 31, 1999 | $ | 15.98 | (0.06 | ) | 2.59 | 2.53 | — | (0.31 | ) | |||||||||
Year Ended October 31, 2000 | $ | 18.20 | (0.15 | ) | (0.90 | ) | (1.05 | ) | — | (2.44 | ) | |||||||
Year Ended October 31, 2001 | $ | 14.71 | (0.10 | ) | (5.87 | ) | (5.97 | ) | — | (3.20 | ) | |||||||
Year Ended October 31, 2002 | $ | 5.54 | (0.06 | ) | (1.04 | ) | (1.10 | ) | — | — | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 4.44 | (0.02 | ) | 0.19 | 0.17 | — | — | ||||||||||
Class C Shares | ||||||||||||||||||
Period Ended October 31, 2001 (d) | $ | 7.11 | (0.03 | ) | (1.53 | ) | (1.56 | ) | — | — | ||||||||
Year Ended October 31, 2002 | $ | 5.55 | (0.06 | ) | (1.05 | ) | (1.11 | ) | — | — | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 4.44 | (0.02 | ) | 0.19 | 0.17 | — | — | ||||||||||
Class D Shares | ||||||||||||||||||
Year Ended October 31, 1998 (c) | $ | 16.32 | 0.03 | 2.32 | 2.35 | (0.04 | ) | (2.61 | ) | |||||||||
Year Ended October 31, 1999 | $ | 16.02 | 0.03 | 2.65 | 2.68 | (0.03 | ) | (0.31 | ) | |||||||||
Year Ended October 31, 2000 | $ | 18.36 | (0.05 | ) | (0.84 | ) | (0.89 | ) | — | (2.44 | ) | |||||||
Year Ended October 31, 2001 | $ | 15.03 | (0.03 | ) | (5.86 | ) | (5.89 | ) | — | (3.20 | ) | |||||||
Year Ended October 31, 2002 | $ | 5.94 | (0.01 | ) | (1.14 | ) | (1.15 | ) | — | — | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 4.79 | — | 0.20 | 0.20 | — | — | |||||||||||
Institutional Service Class Shares | ||||||||||||||||||
Period Ended October 31, 2002 (e) | $ | 6.59 | (0.01 | ) | (1.79 | ) | (1.80 | ) | — | — | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 4.79 | — | 0.21 | 0.21 | — | — |
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Distributions | Ratios/Supplemental Data | ||||||||||||||||||||
Total Distributions | Net Asset, Value, End of Period | Total Return (a) | Net Assets at End of Period (000s) | Ratio of Expenses To Average Net Assets | Ratio of Net Investment Income (loss) to Average Net Assets | Portfolio Turnover (b) | |||||||||||||||
Class A Shares | |||||||||||||||||||||
Period Ended October 31, | — | $ | 16.02 | (2.97 | %)(f) | $ | 2,830 | 1.11 | %(g) | (0.38 | %)(g) | 38.61 | % | ||||||||
Year Ended October 31, 1999 | (0.32 | ) | $ | 18.35 | 16.85 | % | $ | 7,654 | 1.04 | % | (0.02 | %) | 35.18 | % | |||||||
Year Ended October 31, 2000 | (2.44 | ) | $ | 14.99 | (6.43 | %) | $ | 9,234 | 1.04 | % | (0.52 | %) | 163.52 | % | |||||||
Year Ended October 31, 2001 | (3.20 | ) | $ | 5.89 | (47.33 | %) | $ | 5,268 | 1.33 | % | (0.60 | %) | 210.72 | % | |||||||
Year Ended October 31, 2002 | — | $ | 4.74 | (19.52 | %) | $ | 4,828 | 1.17 | % | (0.34 | %) | 241.95 | % | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | — | $ | 4.94 | 4.22 | %(f) | $ | 5,342 | 1.13 | %(g) | (0.17 | %)(g) | 130.22 | % | ||||||||
Class B Shares | |||||||||||||||||||||
Period Ended October 31, | — | $ | 15.98 | (3.21 | %)(f) | $ | 1,557 | 1.88 | %(g) | (1.16 | %)(g) | 38.61 | % | ||||||||
Year Ended October 31, 1999 | (0.31 | ) | $ | 18.20 | 16.12 | % | $ | 6,210 | 1.79 | % | (0.76 | %) | 35.18 | % | |||||||
Year Ended October 31, 2000 | (2.44 | ) | $ | 14.71 | (7.30 | %) | $ | 8,180 | 1.80 | % | (1.28 | %) | 163.52 | % | |||||||
Year Ended October 31, 2001 | (3.20 | ) | $ | 5.54 | (49.10 | %) | $ | 4,288 | 2.12 | % | (1.36 | %) | 210.72 | % | |||||||
Year Ended October 31, 2002 | — | $ | 4.44 | (19.86 | %) | $ | 3,299 | 1.90 | % | (1.08 | %) | 241.95 | % | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | — | $ | 4.61 | 3.83 | %(f) | $ | 3,320 | 1.85 | %(g) | (0.89 | %)(g) | 130.22 | % | ||||||||
Class C Shares | |||||||||||||||||||||
Period Ended October 31, | — | $ | 5.55 | (21.94 | %)(f) | $ | 58 | 2.27 | %(g) | (1.41 | %)(g) | 210.72 | % | ||||||||
Year Ended October 31, 2002 | — | $ | 4.44 | (20.00 | %) | $ | 52 | 1.90 | % | (1.08 | %) | 241.95 | % | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | — | $ | 4.61 | 3.83 | %(f) | $ | 77 | 1.85 | %(g) | (0.92 | %)(g) | 130.22 | % | ||||||||
Class D Shares | |||||||||||||||||||||
Year Ended October 31, | (2.65 | ) | $ | 16.02 | 15.94 | % | $ | 914,178 | 0.73 | % | 0.19 | % | 38.61 | % | |||||||
Year Ended October 31, 1999 | (0.34 | ) | $ | 18.36 | 17.07 | % | $ | 1,014,687 | 0.80 | % | 0.19 | % | 35.18 | % | |||||||
Year Ended October 31, 2000 | (2.44 | ) | $ | 15.03 | (6.23 | %) | $ | 834,816 | 0.83 | % | (0.30 | %) | 163.52 | % | |||||||
Year Ended October 31, 2001 | (3.20 | ) | $ | 5.94 | (47.07 | %) | $ | 385,898 | 1.10 | % | (0.38 | %) | 210.72 | % | |||||||
Year Ended October 31, 2002 | — | $ | 4.79 | (19.36 | %) | $ | 207,357 | 0.93 | % | (0.10 | %) | 241.95 | % | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | — | $ | 4.99 | 4.18 | %(f) | $ | 203,399 | 0.86 | %(g) | 0.10 | %(g) | 130.22 | % | ||||||||
Institutional Service Class Shares | |||||||||||||||||||||
Period Ended October 31, | — | $ | 4.79 | (27.31 | %)(f) | $ | 59,307 | 0.88 | %(g) | (0.11 | %)(g) | 241.95 | % | ||||||||
Six Months Ended April 30, 2003 (Unaudited) | — | $ | 5.00 | 4.38 | %(f) | $ | 62,390 | 0.85 | %(g) | 0.11 | %(g) | 130.22 | % |
(a) | Excludes sales charge. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | Shares first offered to public on May 11, 1998. Upon a trust Reorganization on May 11, 1998, the existing shares of the Fund were renamed Class D. |
(d) | For the period from March 1, 2001 (commencement of operations) through October 31, 2001. |
(e) | For the period from January 2, 2002 (commencement of operations) through October 31, 2002. |
(f) | Not annualized. |
(g) | Annualized. |
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Selected Data for Each Share of Capital Outstanding
Nationwide Large Cap Growth Fund
Investment Activities | Distributions | ||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (loss) | Net Realized and Unrealized Gains (losses) on Investments | Total from Investment Activities | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | |||||||||||||||
Class A Shares | |||||||||||||||||||||
Period Ended October 31, 1999 (d) | $ | 10.00 | (0.04 | ) | 3.62 | 3.58 | — | — | $ | 13.58 | |||||||||||
Year Ended October 31, 2000 | $ | 13.58 | (0.04 | ) | 1.03 | 0.99 | (0.20 | ) | (0.20 | ) | $ | 14.37 | |||||||||
Year Ended October 31, 2001 | $ | 14.37 | (0.04 | ) | (5.55 | ) | (5.59 | ) | (0.49 | ) | (0.49 | ) | $ | 8.29 | |||||||
Year Ended October 31, 2002 | $ | 8.29 | (0.04 | ) | (1.57 | ) | (1.61 | ) | — | — | $ | 6.68 | |||||||||
Six Months Ended April 30, 2003 | $ | 6.68 | (0.01 | ) | 0.12 | 0.11 | — | — | $ | 6.79 | |||||||||||
Class B Shares | |||||||||||||||||||||
Period Ended October 31, 1999 (d) | $ | 10.00 | (0.12 | ) | 3.62 | 3.50 | — | — | $ | 13.50 | |||||||||||
Year Ended October 31, 2000 | $ | 13.50 | (0.06 | ) | 0.94 | 0.88 | (0.20 | ) | (0.20 | ) | $ | 14.18 | |||||||||
Year Ended October 31, 2001 | $ | 14.18 | (0.11 | ) | (5.55 | ) | (5.66 | ) | (0.49 | ) | (0.49 | ) | $ | 8.03 | |||||||
Year Ended October 31, 2002 | $ | 8.03 | (0.09 | ) | (1.50 | ) | (1.59 | ) | — | — | $ | 6.44 | |||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 6.44 | (0.03 | ) | 0.11 | 0.08 | — | — | $ | 6.52 | |||||||||||
Class C Shares | |||||||||||||||||||||
Period Ended October 31, 2001 (e) | $ | 9.91 | (0.03 | ) | (1.84 | ) | (1.87 | ) | — | — | $ | 8.04 | |||||||||
Year Ended October 31, 2002 | $ | 8.04 | (0.08 | ) | (1.52 | ) | (1.60 | ) | — | — | $ | 6.44 | |||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 6.44 | (0.03 | ) | 0.11 | 0.08 | — | — | $ | 6.52 | |||||||||||
Institutional Service Class Shares | |||||||||||||||||||||
Period Ended October 31, 1999 (d) | $ | 10.00 | (0.01 | ) | 3.61 | 3.60 | — | — | $ | 13.60 | |||||||||||
Year Ended October 31, 2000 | $ | 13.60 | (0.03 | ) | 1.04 | 1.01 | (0.20 | ) | (0.20 | ) | $ | 14.41 | |||||||||
Year Ended October 31, 2001 | $ | 14.41 | (0.03 | ) | (5.55 | ) | (5.58 | ) | (0.49 | ) | (0.49 | ) | $ | 8.34 | |||||||
Year Ended October 31, 2002 | $ | 8.34 | (0.02 | ) | (1.59 | ) | (1.61 | ) | — | — | $ | 6.73 | |||||||||
Six Months Ended April 30, 2003 (Unaudited) | $ | 6.73 | — | 0.12 | 0.12 | — | — | $ | 6.85 |
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Ratios/Supplemental Data | |||||||||||||||||||||
Total Return (a) | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (loss) to Average Net Assets | Ratio of Expenses (prior to reimbursements) to Average Net Assets (b) | Ratio of Net Investment Income (loss) (prior to reimbursements) to Average Net Assets (b) | Portfolio Turnover (c) | |||||||||||||||
Class A Shares | |||||||||||||||||||||
Period Ended October 31, | 35.80 | %(f) | $ | 33,410 | 1.20 | %(g) | (0.27 | %)(g) | 1.69 | %(g) | (0.76 | %)(g) | 65.27 | % | |||||||
Year Ended October 31, 2000 | 7.26 | % | $ | 40,643 | 1.20 | % | (0.33 | %) | 1.74 | % | (0.87 | %) | 86.68 | % | |||||||
Year Ended October 31, 2001 | (39.92 | %) | $ | 33,579 | 1.20 | % | (0.47 | %) | 1.88 | % | (1.15 | %) | 78.02 | % | |||||||
Year Ended October 31, 2002 | (19.42 | %) | $ | 27,246 | 1.36 | % | (0.46 | %) | 1.52 | % | (0.62 | %) | 114.21 | % | |||||||
Six Months Ended April 30, 2003 (Unaudited) | 1.65 | %(f) | $ | 26,634 | 1.44 | %(g) | (0.28 | %)(g) | 1.53 | %(g) | (0.37 | %)(g) | 42.81 | % | |||||||
Class B Shares | |||||||||||||||||||||
Period Ended October 31, | 35.00 | %(f) | $ | 1,179 | 1.95 | %(g) | (0.97 | %)(g) | 5.26 | %(g) | (4.28 | %)(g) | 65.27 | % | |||||||
Year Ended October 31, 2000 | 6.48 | % | $ | 3,234 | 1.95 | % | (1.06 | %) | 3.33 | % | (2.44 | %) | 86.68 | % | |||||||
Year Ended October 31, 2001 | (40.98 | %) | $ | 225 | 1.95 | % | (1.21 | %) | 3.70 | % | (2.96 | %) | 78.02 | % | |||||||
Year Ended October 31, 2002 | (19.80 | %) | $ | 1,773 | 2.02 | % | (1.13 | %) | 2.25 | % | (1.36 | %) | 114.21 | % | |||||||
Six Months Ended April 30, 2003 (Unaudited) | 1.24 | %(f) | $ | 1,718 | 2.05 | %(g) | (0.89 | %)(g) | 2.14 | %(g) | (0.98 | %)(g) | 42.81 | % | |||||||
Class C Shares | |||||||||||||||||||||
Period Ended October 31, | (18.87 | %)(f) | $ | 35 | 1.95 | %(g) | (1.20 | %)(g) | 4.51 | %(g) | (3.76 | %)(g) | 78.02 | % | |||||||
Year Ended October 31, 2002 | (19.90 | %) | $ | 37 | 2.02 | % | (1.13 | %) | 2.22 | % | (1.33 | %) | 114.21 | % | |||||||
Six Months Ended April 30, 2003 (Unaudited) | 1.24 | %(f) | $ | 47 | 2.05 | %(g) | (0.91 | %)(g) | 2.14 | %(g) | (1.00 | %)(g) | 42.81 | % | |||||||
Institutional Service Class Shares | |||||||||||||||||||||
Period Ended October 31, | 36.00 | %(f) | $ | 4,594 | 1.05 | %(g) | (0.09 | %)(g) | 3.46 | %(g) | (2.50 | %)(g) | 65.27 | % | |||||||
Year Ended October 31, 2000 | 7.40 | % | $ | 9,904 | 1.05 | % | (0.17 | %) | 1.54 | % | (0.66 | %) | 86.68 | % | |||||||
Year Ended October 31, 2001 | (39.73 | %) | $ | 7,505 | 1.05 | % | (0.33 | %) | 1.62 | % | (0.90 | %) | 78.02 | % | |||||||
Year Ended October 31, 2002 | (19.30 | %) | $ | 6,082 | 1.21 | % | (0.32 | %) | 1.38 | % | (0.49 | %) | 114.21 | % | |||||||
Six Months Ended April 30, 2003 (Unaudited) | 1.78 | %(f) | $ | 6,598 | 1.30 | %(g) | (0.15 | %)(g) | 1.39 | %(g) | (0.24 | %)(g) | 42.81 | % |
(a) | Excludes sales charge. |
(b) | During the period certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(c) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(d) | For the period from November 2, 1998 (commencement of operations) through October 31, 1999. |
(e) | For the period from March 1, 2001 (commencement of operations) through October 31, 2001. |
(f) | Not annualized. |
(g) | Annualized. |
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PERFORMANCE HISTORY AND
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE
Gartmore Growth Fund
The following bar chart and table show two aspects of the Growth Fund: volatility and performance. The bar chart shows the volatility—or variability—of the Growth Fund’s annual total returns over time, and shows that fund performance can change from year to year. These returns are shown on a before-tax basis and without sales charges. The table shows the Growth Fund’s average annual total returns on a before-tax basis (and on an after-tax basis for Class D shares) for certain time periods compared to the returns of a broad-based securities index. The bar chart and table provide some indication of the risks of investing in the Growth Fund. Remember, however, that past performance does not guarantee similar results in the future.
After-tax returns are shown for Class D shares only. After-tax returns for other classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold Growth Fund shares through tax-deferred arrangements, such as qualified retirement plans.
Annual Returns—Growth Fund—Class D Shares(1) (years ended December 31)
Year-to-Date Return as of June 30, 2003 = 14.99%
Best Quarter: 18.27% | 2nd qtr. of 1997 |
Worst Quarter: | -28.00% 1st qtr. of 2001 |
(1) | These annual returns do not include sales charges and do not reflect the effect of taxes. If the sales charges were included, the annual returns would be lower than those shown. |
Average annual returns—Growth Fund—as of December 31, 2002(1) | 1 Year | 5 Years | 10 Years | |||
Class A shares—Before Taxes(2) | -32.80% | -13.51% | 0.36% | |||
Class B shares—Before Taxes(2) | -32.68% | -13.70% | 0.37% | |||
Class C shares—Before Taxes(3) | -30.64% | -12.96% | 0.68% | |||
ISC shares—Before Taxes(4) | -28.55% | -12.28% | 1.07% | |||
Class D shares—Before Taxes | -31.92% | -13.12% | 0.58% | |||
Class D shares—After Taxes on Distributions | -31.92% | -14.69% | -1.39% | |||
Class D shares—After Taxes on Distributions and Sale of Shares(5) | -19.60% | -8.63% | 1.18% | |||
Russell 1000® Growth Index(6) | -27.88% | -3.84% | 6.70% |
(1) | These returns reflect performance after sales charges and expenses are deducted, and include the performance of its predecessor fund prior to May 11, 1998. |
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(2) | These returns through May 11, 1998 are based on the performance of the Fund’s predecessor fund, which was achieved prior to the creation of the Class A and Class B shares, and which is the same as the performance shown for Class D shares. Excluding the effect of any fee waivers or reimbursements, Class D shares average annual total returns are similar to what Class A and Class B shares would have produced because Class A and Class B shares invest in the same portfolio of securities as Class D shares. The returns for Class A and Class B shares have been restated for sales charges but do not reflect the additional fees applicable to such shares; if these fees were reflected, the annual returns for Class A and Class B shares would have been lower. |
(3) | These returns through May 11, 1998 are based on the performance of the Fund’s predecessor fund, which was achieved prior to the creation of the Class C shares, and which is the same as the performance shown for Class D shares. In addition, the performance of Class C shares for the period of May 11, 1998 through March 1, 2001, when Class C shares were implemented, is based on the performance of Class D shares. Excluding the effect of any fee waivers or reimbursements, Class D shares average annual total returns are similar to what Class C shares would have produced because Class C shares invest in the same portfolio of securities as Class D shares. The returns for Class C shares have been restated for sales charges but do not reflect the additional fees applicable to such shares; if these fees were reflected, the annual returns for Class C shares would have been lower. |
(4) | These returns through May 11, 1998 are based on the performance of the Fund’s predecessor fund, which was achieved prior to the creation of the Class, and which is the same as the performance shown for Class D shares. In addition, the performance of ISC shares for the period of May 11, 1998 through January 2, 2002, when ISC shares were implemented, is based on the performance of Class D shares. Excluding the effect of any fee waivers or reimbursements, ISC shares average annual total returns are similar to what Class D shares would have produced because ISC shares invest in the same portfolio of securities as Class D shares. These returns do not reflect the additional fees applicable to such shares; if these fees were reflected, the annual returns for ISC shares would have been lower. |
(5) | The performance for “Class D Shares—After Taxes on Distributions and Sale of Shares” is better than the performance for the same class before taxes because the calculations were made assuming that the taxes that would have been paid on distributions and other income of the shareholder could be offset by the taxes generated if the shares had been sold. |
(6) | The Russell 1000® Growth Index is an unmanaged index of growth securities of large U.S. companies included in the Russell 1000® Index (the largest 1000 companies in the U.S.). These returns do not include the effect of any sales charges or expenses. If sales charges and expenses were deducted, the actual return of this Index would be lower. |
The following is management’s discussion and analysis of the performance of the Growth Fund for the year ended October 31, 2002. This discussion provides an overview of the economy and how the economy affected the Growth Fund during the year ended October 31, 2002. This discussion also provides a look into the then-current investment techniques and strategies of, and the outlook for, the Growth Fund. The outlook foreseen by the portfolio manager at that time may not be realized.
MANAGEMENT’S DISCUSSION OF THE GROWTH FUND’S PERFORMANCE
How did the Growth Fund Perform?
The Growth Fund returned -19.52%* versus -19.62% for its benchmark, the Russell 1000 Growth Index.
For broader comparison, the S&P 500 Index returned -15.11% for the period.
* | Performance of Class A shares without sales charge and assuming all distributions are reinvested. |
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What Market/Economic Factors Influenced the Portfolio’s Performance?
The equity markets staged a brief rally immediately after the terrorist attacks of Sept. 11, 2001. However, positive investor sentiment faded after a number of issues dragged down stock market performance.
A stretch of downbeat economic news prompted fears of a “double-dip” recession, and a series of high-profile cases involving corporate accounting and management scandals intensified skepticism about the clarity and credibility of many companies’ earnings. Heightened concern about a possible war with Iraq also contributed to investors’ uneasiness. Combined with a persistent weakness in corporate profits, each of these factors hurt stock performance within all market sectors and capitalizations during the year.
The Growth Fund’s negative return reflected the poor performance of large-capitalization growth stocks as a whole, yet the Growth Fund did perform in line with its investment objective and benchmark.
What Sectors/Holdings Enhanced or Detracted From Performance?
Consumer spending remained strong for most of the year, despite a slowdown in the third quarter of 2002. Foreseeing the trend, the Growth Fund placed an emphasis on consumer-related stocks. This strategy paid off, as several holdings as diverse as Proctor & Gamble Co. and Harley-Davidson, Inc. performed well. Robust sales and a broad product line helped boost Proctor & Gamble’s stock. Harley-Davidson benefited from exceptionally strong demand for its motorcycles and sales of special products designed to commemorate the company’s 100th anniversary.
On the downside, Growth Fund performance was hurt by a sizable investment in the information technology sector, which is still hampered by a lack of demand stemming from businesses’ limited capital spending. For example, stocks of large semiconductor makers Fairchild Semiconductor International, Inc. and Texas Instruments Inc. each finished well into negative territory, suffering from weak product sales.
How is the Growth Fund Positioned?
Moving into the fourth quarter of 2002 and preparing for 2003, we are positioning the Growth Fund less defensively. As a result, we increased the Growth Fund’s allocation to the information technology sector. This sector has been depressed for so long that we believe opportunities will emerge that can offer more attractive investment returns.
In boosting the Growth Fund’s IT exposure, we slightly pared back our investments in consumer-staples stocks. Predictable earnings relative to the broader markets have driven price/earnings multiples to very extended levels. We believe that low interest rates and mortgage refinancings will continue to buoy discretionary consumer spending for the intermediate term.
As always, however, we will remain focused on searching for individual companies with sound fundamentals and a market positioning that can gain market share regardless of economic conditions.
PORTFOLIO MANAGER: Christopher Baggini, CFA
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PORTFOLIO MARKET VALUE: $273,977,679
OCTOBER 31, 2002
AVERAGE ANNUAL TOTAL RETURN*
(For Years Ended October 31, 2002)
1 Yr. | 5 Yr. | 10 Yr. | ||||||
Class A(1) | w/o SC(2) | -19.52% | -11.68% | 1.71% | ||||
w/SC(3) | -24.16% | -12.73% | 1.11% | |||||
Class B(1) | w/o SC(2) | -19.86% | -12.67% | 1.14% | ||||
w/SC(4) | -23.86% | -12.86% | 1.14% | |||||
Class C(1) | w/o SC(2) | -20.00% | -11.96% | 1.56% | ||||
w/SC(5) | -21.65% | -12.13% | 1.46% | |||||
Class D | w/o SC(2) | -19.36% | -11.49% | 1.83% | ||||
w/SC(6) | -22.99% | -12.30% | 1.36% | |||||
Institutional Service Class(1),(7) | -19.36% | -11.49% | 1.83% |
* | The performance of the Growth Fund excludes performance of its predecessor fund achieved prior to the reorganization of Nationwide Investing Foundation with and into the Trust on May 11, 1998. In addition, the performance of the Class A, Class B and Class C shares prior to such date has been restated for sales charges but not for fees applicable to such classes. Inception-to-date class-specific total returns can be found in the Funds’ Financial Highlights (attached as Exhibit B to the Prospectus/Proxy Statement). |
All figures showing the effect of a sales charge reflect the maximum charge possible, because it has the most dramatic effect on performance data.
(1) | These returns include performance based on Class D shares, which was achieved prior to the creation of Class A and Class B (5/11/98), Class C (3/1/01) and Institutional Service Class (1/2/02) shares. These returns have been restated for sales charges but not for fees applicable to these classes of shares, which include a 0.25% (Class A) or 1.00% (Class B and Class C) 12b-1 fee. Had Class A, Class B or Class C been in existence for the time periods presented, the performance for such classes would have been lower as a result of their additional expenses. Had Institutional Service Class been in existence for the time periods presented, the performance of such class would have been similar assuming similar expenses. |
(2) | These returns do not reflect the effects of sales charges (SC). |
(3) | A 5.75% front-end sales charge was deducted. |
(4) | A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC declines to 0% after 6 years. |
(5) | A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also deducted from the one year return because it is charged when you sell Class C shares within the first year after purchase. |
(6) | A 4.50% front-end sales charge was deducted. |
(7) | Not subject to any sales charges. |
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INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
Comparative performance of $10,000 invested in Class D shares of the Growth Fund, the Russell 1000 Growth Index (Russell 1000 Growth) (a) and the Consumer Price Index (CPI) (b) over a 10-year period ended 10/31/02. Unlike the Growth Fund, the returns for these indices do not reflect any fees, expenses, or sales charges.
(a) | The Russell 1000 Growth is an unmanaged index of the growth securities of large U.S. companies included in the Russell 1000 Index. |
(b) | The CPI represents changes in prices of a basket of goods and services purchased for consumption by urban households. |
Nationwide Large Cap Growth Fund
The following bar chart and table show two aspects of the Large Cap Growth Fund: volatility and performance. The bar chart shows the volatility—or variability—of the Large Cap Growth Fund’s annual total returns over time, and shows that fund performance can change from year to year. These returns are shown on a before-tax basis and without sales charges. The table shows the Fund’s average annual total returns on a before-tax basis (and on an after-tax basis for Class A shares) for certain time periods compared to the returns of a broad-based securities index. The bar chart and table provide some indication of the risks of investing in the Large Cap Growth Fund. Remember, however, that past performance does not guarantee similar results in the future.
After-tax returns are shown for Class A shares only. After-tax returns for other classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold Large Cap Growth Fund shares through tax-deferred arrangements, such as qualified retirement plans.
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Annual Returns—Large Cap Growth Fund—Class A Shares(1) (years ended December 31)
Year-to-date Return as of June 30, 2003 = 12.52%
Best Quarter: 22.82% | 4th qtr. of 1999 |
Worst Quarter: | -21.79% 1st qtr. of 2000 |
(1) | These annual returns do not include sales charges and do not reflect the effect of taxes. If the sales charges were included, the annual returns would be lower than those shown. |
Average annual returns—Large Cap Growth Fund—as of December 31, 2002(1) | One Year | Since Inception(2) | ||
Class A shares—Before Taxes | -32.39% | -10.04% | ||
Class A shares—After Taxes on Distributions | -32.39% | -10.45% | ||
Class A shares—After Taxes on Distributions and Sale of Shares(3) | -19.89% | -7.78% | ||
Class B shares—Before Taxes | -32.36% | -9.97% | ||
Class C shares—Before Taxes(4) | -30.23% | -9.78% | ||
ISC shares Before Taxes | -28.27% | -8.59% | ||
Russell 1000® Growth Index(5) | -27.88% | -8.35% |
(1) | These returns reflect performance after sales charges, if any, and expenses are deducted. |
(2) | The Fund began operations on November 2, 1998. |
(3) | “Class A Shares- After Taxes on Distributions and Sale of Shares” is better than the performance for the same class before taxes because the calculations were made assuming that the taxes that would have been paid on distributions and other income of the shareholder could be offset by the taxes generated if the shares had been sold. |
(4) | These returns through March 1, 2001 are based on the performance of the Fund’s Class B shares, which was achieved prior to the creation of Class C Shares. Excluding the effect of any fee waivers or reimbursements, Class B shares’ average annual total returns are similar to what Class C shares would have produced because Class C shares invest in the same portfolio of securities as Class B shares and have the same expenses after any fee waivers or reimbursements. For Class C shares, these returns have been restated for the applicable sales charges. |
(5) | The Russell 1000® Growth Index is an unmanaged index of growth securities of large U.S. companies included in the Russell 1000® Index (the largest 1000 companies in the U.S.). These returns do not include the effect of any sales charges or expenses. If sales charges and expenses were deducted, the actual return of this Index would be lower. |
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The following is management’s discussion and analysis of the performance of the Large Cap Growth Fund for the year ended October 31, 2002. This discussion provides an overview of the economy and how the economy affected the Large Cap Growth Fund during the year ended October 31, 2002. This discussion also provides a look into the then-current investment techniques and strategies of, and the outlook for, the Large Cap Growth Fund from the perspective of GSAM, the Large Cap Growth Fund’s subadviser from the perspective of the portfolio manager. The outlook foreseen by GSAM at that time may not be realized.
MANAGEMENT’S DISCUSSION OF THE LARGE CAP GROWTH FUND’S PERFORMANCE
How did the Large Cap Growth Fund Perform?
The Large Cap Growth Fund outperformed on a relative basis, returning -19.42%* versus -19.62% for its benchmark, the Russell 1000® Growth Index.
For broader comparison, the S&P 500 Index returned -15.11% for the period.
What Market/Economic Factors Influenced the Portfolio’s Performance?
The equity markets staged a brief rally after the terrorist attacks of September 11, 2001. Shortly thereafter, however, a stretch of downbeat economic news prompted fears of a “double-dip” recession. Several high-profile cases involving corporate accounting and management scandals intensified investors’ skepticism about the clarity and credibility of many companies’ reported earnings. Heightened concern about a possible war with Iraq also contributed to investors’ uneasiness.
Each of these factors, combined with a persistent weakness in corporate profits, hurt stock performance within all market sectors and capitalizations. The Large Cap Growth Fund was unable to avoid the generally negative conditions within the stock market.
What Sectors/Holdings Enhanced or Detracted From Performance?
While the Large Cap Growth Fund’s holdings in both the health-care and information technology sectors fell, they outperformed similar stocks within the benchmark. Specific stocks that contributed most to the Fund’s relative performance were overweights in foodservices company SYSCO Corp., Bank of America Corp., and Johnson & Johnson.
Conversely, stock selection in the commercial services sector detracted from performance. Among the Large Cap Growth Fund’s least-successful holdings were overweights in AOL Time Warner Inc. and Siebel Systems, Inc. (since eliminated from the portfolio). An underweight position versus the benchmark in telecommunications company QUALCOMM Inc. also detracted from the Large Cap Growth Fund’s return.
How is the Large Cap Growth Fund Positioned?
We continue to believe that cheaper stocks should outpace more expensive ones, and stocks with positive momentum should do better than those with downward momentum. In addition, we expect companies that are favored by fundamental research analysts and that have strong profit margins and sustainable earnings to outperform their peers. With that in mind, we anticipate remaining fully invested and expect that the value we add over time will be due to stock selection, as opposed to sector or size allocations.
PORTFOLIO MANAGER: Goldman Sachs Asset Management–Subadviser
* | Performance of Class A shares without sales charge and assuming all distributions are reinvested. |
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PORTFOLIO MARKET VALUE: $35,378,476
OCTOBER 31, 2002
AVERAGE ANNUAL TOTAL RETURN—LARGE CAP GROWTH FUND
(For Periods Ended October 31, 2002)
1 Yr. | Inception(1) | |||||
Class A | w/o SC(2) | -19.42% | -8.37% | |||
w/SC(3) | -24.09% | -9.72% | ||||
Class B | w/o SC(2) | -19.80% | -9.19% | |||
w/SC(4) | -23.81% | -9.84% | ||||
Class C(5) | w/o SC(2) | -19.90% | -9.19% | |||
w/SC(6) | -21.48% | -9.41% | ||||
Institutional Service Class(7) | -19.30% | -8.20% |
All figures showing the effect of a sales charge reflect the maximum charge possible, because it has the most dramatic effect on performance data.
(1) | Fund commenced operations on November 2, 1998. |
(2) | These returns do not reflect the effects of sales charges (SC). |
(3) | A 5.75% front-end sales charge was deducted. |
(4) | A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC declines to 0% after 6 years. |
(5) | These returns include performance based on Class B shares, which was achieved prior to the creation of Class C shares (3/1/01). These returns have been restated for sales charges but not for fees applicable to Class C shares. Had Class C been in existence for the time periods presented, the performance of Class C shares would have been similar assuming similar expenses. |
(6) | A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also deducted from the one year return because it is charged when you sell Class C shares within the first year after purchase. |
(7) | Not subject to any sales charges. |
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INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
Comparative performance of $10,000 invested in Class A shares of the Large Cap Growth Fund, the Russell 1000 Growth Index (Russell 1000 Growth) (a), and the Consumer Price Index (CPI) (b) since inception. Unlike the Large Cap Growth Fund, the returns for these indices do not reflect any fees, expenses, or sales charges.
(a) | The Russell 1000 Growth is comprised of the 1,000 largest U.S. companies, based upon total market capitalization, whose stocks have a greater than average growth orientation. |
(b) | The CPI represents changes in prices of a basket of goods and services purchased for consumption by urban households. |
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EVERY SHAREHOLDER’S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY!
Please fold and detach card at perforation before mailing
PROXY
SPECIAL MEETING OF SHAREHOLDERS
Gartmore Mutual Funds
Nationwide Large Cap Growth Fund
The undersigned hereby revokes all previous proxies for his or her shares and appoints William Baltrus and Mary Fran Ennis and each of them, proxies of the undersigned with full power of substitution to vote all shares of the Nationwide Large Cap Growth Fund series of Gartmore Mutual Funds (the “Trust”) that the undersigned is entitled to vote at the Special Meeting of Shareholders, including any adjournments thereof (the “Meeting”), to be held at 1200 River Road, Conshohocken, PA 19428, at 9:00 a.m., Eastern time, on Friday, December 12, 2003, upon such business as may properly be brought before the Meeting.
IMPORTANT: PLEASE SEND IN YOUR PROXY TODAY.
You are urged to date and sign this proxy and return it promptly. This will save the expense of follow-up letters to shareholders who have not responded.
Note: Please sign exactly as your name appears on the proxy. If signing for estates, trusts or corporations, title or capacity should be stated. If shares are held jointly, each holder must sign. | ||
Signature(s) | ||
Date |
IMPORTANT: PLEASE SIGN AND MAIL IN YOUR PROXY…TODAY
(Please see reverse side)
Table of Contents
EVERY SHAREHOLDER’S VOTE IS IMPORTANT
PLEASE SIGN AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE.
NO POSTAGE REQUIRED IF MAILED IN THE U.S.
Please fold and detach card at perforation before mailing
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST. IT WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE AND THIS PROXY IS SIGNED AND RETURNED, THIS PROXY SHALL BE VOTED IN FAVOR OF PROPOSAL 1, REGARDING THE REORGANIZATION OF THE FUND PURSUANT TO THE PLAN OF REORGANIZATION ADOPTED BY THE TRUST. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING ABOUT WHICH THE PROXYHOLDERS WERE NOT AWARE PRIOR TO THE TIME OF THE SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXYHOLDERS TO VOTE IN ACCORDANCE WITH THE VIEWS OF MANAGEMENT ON SUCH MATTERS. MANAGEMENT IS NOT AWARE OF ANY SUCH MATTERS.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF PROPOSAL 1
1. | To approve a Plan of Reorganization adopted by Gartmore Mutual Funds (the “Trust”), on behalf of the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund”) and the Gartmore Growth Fund (the “Growth Fund”) series of the Trust, that provides for the acquisition of all of the assets, subject to liabilities, of the Large Cap Growth Fund, in exchange for Class A, Class B, Class C and Institutional Service Class shares of the Growth Fund, the distribution of such shares to the shareholders of the Large Cap Growth Fund and the dissolution of the Large Cap Growth Fund. | FOR | AGAINST | ABSTAIN | ||||
2. | To grant the proxyholders authority to vote upon any other business that may properly come before the Meeting. | GRANT | WITHHOLD | ABSTAIN |
IMPORTANT: PLEASE SIGN AND MAIL IN YOUR PROXY…TODAY
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GARTMORE MUTUAL FUNDS
Vote this Voting Instruction Form TODAY! Your prompt response will save [your Fund] the expense of additional mailings.
PLEASE FOLD AND DETACH AT PERFORATION BEFORE MAILING
SPECIAL MEETING OF SHAREHOLDERS
Gartmore Mutual Funds
Nationwide Large Cap Growth Fund
The undersigned owner of a variable annuity or variable life insurance contract, revoking previous voting instructions, hereby instructs Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company to vote all shares of the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund”) of Gartmore Mutual Funds (the “Trust”) as indicated above attributable to his or her variable annuity or variable life insurance contact as of October 1, 2003, at the Special Meeting of Shareholders of the Fund to be held at 1200 River Road, Conshohocken, PA 19428, on Friday, December 12, 2003 at 9:00 a.m., Eastern time, and at any adjournments thereof. These voting instructions will be used to vote on the proposal described in the Proxy Statement as specified on the reverse side.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Voting Instruction Form. When the variable annuity or variable life insurance contract is held by joint tenants, both should sign. When signing in a fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, etc., please so indicate. Corporate and partnership voting instructions should be signed by an authorized person indicating the person’s title.
Date: | ||
| ||
Signature(s) (Title(s), if applicable) |
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Please refer to the Proxy Statement discussion of each of these Proposals.
IF NO SPECIFICATION IS MADE AND THIS VOTING INSTRUCTION FORM IS SIGNED AND RETURNED, THE VOTING INSTRUCTION FORM SHALL BE VOTED FOR THE PROPOSALS.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR PROPOSAL 1.
PLEASE FOLD AND DETACH AT PERFORATION BEFORE MAILING
1. | To approve a Plan of Reorganization adopted by Gartmore Mutual Funds (the “Trust”), on behalf of the Large Cap Growth Fund and the Gartmore Growth Fund (the “Growth Fund”) series of the Trust, that provides for the acquisition of all of the assets, subject to liabilities, of the Large Cap Growth Fund, in exchange for Class A, Class B, Class C and Institutional Service Class shares of the Growth Fund, the distribution of such shares to the shareholders of the Large Cap Growth Fund and the dissolution of the Large Cap Growth Fund. | FOR | AGAINST | ABSTAIN | ||||
2. | To grant the proxyholders authority to vote upon any other business that may properly come before the Meeting. | GRANT | WITHHOLD | ABSTAIN |
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EVERY SHAREHOLDER’S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY!
Please fold and detach card at perforation before mailing
PROXY
SPECIAL MEETING OF SHAREHOLDERS
Gartmore Mutual Funds
Gartmore Growth Fund
The undersigned hereby revokes all previous proxies for his or her shares and appoints William Baltrus and Mary Fran Ennis and each of them, proxies of the undersigned with full power of substitution to vote all shares of the Gartmore Growth Fund (the “Growth Fund”) series of Gartmore Mutual Funds (the “Trust”) that the undersigned is entitled to vote at the Special Meeting of Shareholders, including any adjournments thereof (the “Meeting”), to be held at 1200 River Road, Conshohocken, PA 19428 at 9:00 a.m., Eastern time, on Friday, December 12, 2003, upon such business as may properly be brought before the Meeting.
IMPORTANT: PLEASE SEND IN YOUR PROXY TODAY.
You are urged to date and sign this proxy and return it promptly. This will save the expense of follow-up letters to shareholders who have not responded.
Note: Please sign exactly as your name appears on the proxy. If signing for estates, trusts or corporations, title or capacity should be stated. If shares are held jointly, each holder must sign. | ||
Signature(s) | ||
Date |
IMPORTANT: PLEASE SIGN AND MAIL IN YOUR PROXY…TODAY
(Please see reverse side)
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EVERY SHAREHOLDER’S VOTE IS IMPORTANT
PLEASE SIGN AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE.
NO POSTAGE REQUIRED IF MAILED IN THE U.S.
Please fold and detach card at perforation before mailing
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST. IT WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE AND THIS PROXY IS SIGNED AND RETURNED, THIS PROXY SHALL BE VOTED IN FAVOR OF PROPOSAL 1, REGARDING THE REORGANIZATION OF THE NATIONWIDE LARGE CAP GROWTH FUND PURSUANT TO THE PLAN OF REORGANIZATION ADOPTED BY THE TRUST. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING ABOUT WHICH THE PROXYHOLDERS WERE NOT AWARE PRIOR TO THE TIME OF THE SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXYHOLDERS TO VOTE IN ACCORDANCE WITH THE VIEWS OF MANAGEMENT ON SUCH MATTERS. MANAGEMENT IS NOT AWARE OF ANY SUCH MATTERS.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF PROPOSAL 1
1. | To approve a Plan of Reorganization adopted by Gartmore Mutual Funds (the “Trust”), on behalf of the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund”) and the Gartmore Growth Fund (the “Growth Fund”) series of the Trust, that provides for the acquisition of all of the assets, subject to liabilities, of the Large Cap Growth Fund, in exchange for Class A, Class B, Class C and Institutional Service Class shares of the Growth Fund, the distribution of such shares to the shareholders of the Large Cap Growth Fund and the dissolution of the Large Cap Growth Fund. | FOR | AGAINST | ABSTAIN | ||||
2. | To grant the proxyholders authority to vote upon any other business that may properly come before the Meeting. | GRANT | WITHHOLD | ABSTAIN |
IMPORTANT: PLEASE SIGN AND MAIL IN YOUR PROXY…TODAY
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GARTMORE MUTUAL FUNDS
Vote this Voting Instruction Form TODAY! Your prompt response will save [your Fund] the expense of additional mailings.
PLEASE FOLD AND DETACH AT PERFORATION BEFORE MAILING
SPECIAL MEETING OF SHAREHOLDERS
Gartmore Mutual Funds
Gartmore Growth Fund
The undersigned owner of a variable annuity or variable life insurance contract, revoking previous voting instructions, hereby instructs Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company to vote all shares of the Gartmore Growth Fund (the “Growth Fund”) of Gartmore Mutual Funds (the “Trust”) as indicated above attributable to his or her variable annuity or variable life insurance contact as of October 1, 2003, at the Special Meeting of Shareholders of the Fund to be held at 1200 River Road, Conshohocken, PA 19428, on Friday, December 12, 2003 at 9:00 a.m., Eastern time, and at any adjournments thereof. These voting instructions will be used to vote on the proposal described in the Proxy Statement as specified on the reverse side.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Voting Instruction Form. When the variable annuity or variable life insurance contract is held by joint tenants, both should sign. When signing in a fiduciary capacity, such as executor, administrator, trustee, attorney, guardian, etc., please so indicate. Corporate and partnership voting instructions should be signed by an authorized person indicating the person’s title.
Date: | ||
| ||
Signature(s) (Title(s), if applicable) |
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Please refer to the Proxy Statement discussion of each of these Proposals.
IF NO SPECIFICATION IS MADE AND THIS VOTING INSTRUCTION FORM IS SIGNED AND RETURNED, THE VOTING INSTRUCTION FORM SHALL BE VOTED FOR THE PROPOSALS.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR PROPOSAL 1.
PLEASE FOLD AND DETACH AT PERFORATION BEFORE MAILING
1. | To approve a Plan of Reorganization adopted by Gartmore Mutual Funds (the “Trust”), on behalf of the Nationwide Large Cap Growth Fund (the “Large Cap Growth Fund”) and the Growth Fund series of the Trust, that provides for the acquisition of all of the assets, subject to liabilities, of the Large Cap Growth Fund, in exchange for Class A, Class B, Class C and Institutional Service Class shares of the Growth Fund, the distribution of such shares to the shareholders of the Large Cap Growth Fund and the dissolution of the Large Cap Growth Fund. | FOR | AGAINST | ABSTAIN | ||||
2. | To grant the proxyholders authority to vote upon any other business that may properly come before the Meeting. | GRANT | WITHHOLD | ABSTAIN |
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STATEMENT OF ADDITIONAL INFORMATION
FOR
GARTMORE MUTUAL FUNDS
October 22, 2003
Acquisition of all of the Assets, Subject to Liabilities, of the
NATIONWIDE LARGE CAP GROWTH FUND,
a series of
GARTMORE MUTUAL FUNDS
By and in exchange
for
Class A shares, Class B shares, Class C and Institutional Services Class shares
of the
GARTMORE GROWTH FUND,
also a series of
GARTMORE MUTUAL FUNDS
This Statement of Additional Information (“SAI”) relates specifically to the proposed delivery of all of the assets, subject to liabilities, of the Nationwide Large Cap Growth Fund for shares of beneficial interest of the Gartmore Growth Fund.
This SAI consists of this Cover Page and the following documents. Each of these documents is enclosed with and is legally considered to be a part of this SAI:
1. | Gartmore Mutual Funds Combined Statement of Additional Information, dated October 1, 2003, as the same may be amended or supplemented from time to time. |
2. | Projected (Pro Forma) after Transaction Financial Statements. |
3. | Gartmore Mutual Funds’ Annual Reports to Shareholders for the year ended October 31, 2002, with respect to the Nationwide Large Cap Growth Fund and the Gartmore Growth Fund. |
4. | Gartmore Mutual Funds’ Semi-Annual Reports to Shareholders for the period ended April 30, 2003, with respect to the Nationwide Large Cap Growth Fund and the Gartmore Growth Fund. |
This SAI is not a prospectus; you should read this SAI in conjunction with the Prospectus/Proxy Statement, dated October 22, 2003, relating to the above-referenced transaction. You can request a copy of the Prospectus/Proxy Statement by calling 1-800-848-0920 or by writing to the Trust at 1200 River Road, Conshohocken, Pennsylvania 19428.
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ATTACHMENTS TO SAI (PAGE 1 OF 4)
The Gartmore Mutual Funds Combined Statement of Additional Information, dated October 1, 2003, is part of this SAI and will be provided to all shareholders requesting this SAI. For purposes of this EDGAR filing, the above-referenced Statement of Additional Information is incorporated herein by reference to the electronic filing made on August 1, 2003, of Post-Effective Amendment No. 50 to the Trust’s Registration Statement on Form N-1A [File Nos. 333-40455, 811-08495].
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ATTACHMENTS TO SAI (PAGE 2 OF 4)
The following are unaudited projected (pro forma) financial statements that were prepared to indicate the anticipated financial information for the Growth Fund following the completion of the Reorganization. They consist of a Pro Forma Combining Statement of Assets and Liabilities; a Pro Forma Combining Statement of Operations; notes relating to the combining Statements; and a Combined Pro Forma Schedule of Portfolio Investments.
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Gartmore Growth Fund
Nationwide Large Cap Growth
Pro Forma Combining Statements of Assets and Liabilities
As of April 30, 2003
(Unaudited)
Gartmore Growth Fund | Nationwide Large Cap Growth | Pro Forma Adjustments | Pro Forma Combined (Note 1) | |||||||||||||
Assets: | ||||||||||||||||
Investment, at value (cost $259,701,604; $37,874,268 and $297,575,872, respectively) | $ | 276,473,446 | $ | 35,138,173 | $ | — | $ | 311,611,619 | ||||||||
Interest and dividends receivable | 70,850 | 17,073 | — | 87,923 | ||||||||||||
Receivable for investments sold | 2,239,090 | — | — | 2,239,090 | ||||||||||||
Receivable from Advisor | — | 3,989 | — | 3,989 | ||||||||||||
Prepaid expenses and other assets | 25,255 | 14,433 | — | 39,688 | ||||||||||||
Total Assets | 278,808,641 | 35,173,668 | — | 313,982,309 | ||||||||||||
Liabilities: | ||||||||||||||||
Payable to custodian | 2,109 | 114,846 | — | 116,955 | ||||||||||||
Payable for investments purchased | 3,927,536 | — | — | 3,927,536 | ||||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Investment advisory fees | 131,692 | 22,571 | (6,349 | )(a) | 147,914 | |||||||||||
Fund administration fees | 130,960 | 11,182 | 142,142 | |||||||||||||
Distribution fees | 3,771 | 6,784 | 10,555 | |||||||||||||
Administrative servicing fees | 2,691 | 4,209 | — | 6,900 | ||||||||||||
Other | 83,123 | 17,546 | — | 100,669 | ||||||||||||
Total Liabilities | 4,281,882 | 177,138 | (6,349 | ) | 4,452,671 | |||||||||||
Net Assets | $ | 274,526,759 | $ | 34,996,530 | $ | 6,349 | $ | 309,529,638 | ||||||||
Represented by: | ||||||||||||||||
Capital | $ | 597,325,780 | $ | 63,346,846 | $ | — | $ | 660,672,626 | ||||||||
Accumulated net investment income (loss) | 114,738 | (49,226 | ) | 6,349 | (a) | 71,861 | ||||||||||
Accumulated net realized gains (losses) from investment transactions | (339,685,601 | ) | (25,564,995 | ) | — | (365,250,596 | ) | |||||||||
Net unrealized appreciation (depreciation) on investments | 16,771,842 | (2,736,095 | ) | — | 14,035,747 | |||||||||||
Net Assets | $ | 274,526,759 | $ | 34,996,530 | $ | 6,349 | $ | 309,529,638 | ||||||||
Net Assets: | ||||||||||||||||
Class A Shares | $ | 5,341,581 | $ | 26,634,118 | $ | 656 | $ | 31,976,355 | ||||||||
Class B Shares | 3,319,699 | 1,717,705 | 103 | 5,037,507 | ||||||||||||
Class C Shares | 76,857 | 46,916 | 3 | 123,776 | ||||||||||||
Class D Shares | 203,399,010 | — | 4,172 | 203,403,182 | ||||||||||||
Institutional Services Class Shares | 62,389,612 | 6,597,791 | 1,415 | 68,988,818 | ||||||||||||
Total | $ | 274,526,759 | $ | 34,996,530 | $ | 6,349 | $ | 309,529,638 | ||||||||
Shares outstanding (unlimited number of shares authorized): | ||||||||||||||||
Class A Shares | 1,081,691 | 3,925,263 | 1,468,249.84 | (d) | 6,475,204 | |||||||||||
Class B Shares | 720,604 | 263,328 | 109,532.64 | (d) | 1,093,465 | |||||||||||
Class C Shares | 16,670 | 7,191 | 2,984.91 | (d) | 26,846 | |||||||||||
Class D Shares | 40,733,759 | — | — | (d) | 40,733,759 | |||||||||||
Institutional Services Class Shares | 12,473,640 | 963,741 | 355,364.33 | (d) | 13,792,745 | |||||||||||
Total | 55,026,364 | 5,159,523 | 1,936,132 | 62,122,019 | ||||||||||||
Net asset value and offering price per share: | ||||||||||||||||
Class A Shares | $ | 4.94 | $ | 6.79 | — | $ | 4.94 | |||||||||
Class B Shares (b) | $ | 4.61 | $ | 6.52 | — | $ | 4.61 | |||||||||
Class C Shares (c) | $ | 4.61 | $ | 6.52 | — | $ | 4.61 | |||||||||
Class D Shares | $ | 4.99 | $ | — | — | $ | 4.99 | |||||||||
Institutional Services Class Shares | $ | 5.00 | $ | 6.85 | — | $ | 5.00 | |||||||||
Maximum offering price per share (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent): | ||||||||||||||||
Class A Shares | $ | 5.24 | $ | 7.20 | $ | 5.24 | ||||||||||
Class C Shares | $ | 4.66 | $ | 6.59 | $ | 4.66 | ||||||||||
Class D Shares | $ | 5.23 | $ | — | $ | 5.23 | ||||||||||
Maximum Sales Charge—Class A Shares | 5.75 | % | 5.75 | % | 5.75 | % | ||||||||||
Maximum Sales Charge—Class C Shares | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Maximum Sales Charge—Class D Shares | 4.50 | % | N/A | 4.50 | % | |||||||||||
(a) | Change based on assumption that current advisory fee structure for the Gartmore Growth Fund would have been in place as of April 30, 2003. |
(b) | For Class B shares, the redemption price per share varies by length of time share are held. |
(c) | For Class C shares, the redemption price per share is reduced by 1.00% for shares held less than one year. |
(d) | Shares adjusted to reflect the purchase into the Gartmore Growth Fund at the corresponding classes net asset value. |
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Gartmore Growth Fund
Nationwide Large Cap Growth
Pro Forma Combining Statements of Operations
For the twelve months ended April 30, 2003
(Unaudited)
Gartmore Growth Fund | Nationwide Large Cap Growth | Pro Forma Adjustments | Pro Forma Combined (Note 1) | |||||||||||||
Investment Income: | ||||||||||||||||
Interest income | $ | 27,249 | $ | 9,534 | $ | — | $ | 36,783 | ||||||||
Dividend income | 2,621,824 | 384,633 | — | 3,006,457 | ||||||||||||
Total Income | 2,649,073 | 394,167 | — | 3,043,240 | ||||||||||||
Expenses: | ||||||||||||||||
Investment advisory fees | 1,720,532 | 287,911 | (80,927 | )(a) | 1,927,516 | |||||||||||
Fund administration and transfer agent fees | 487,090 | 65,709 | — | 552,799 | ||||||||||||
Distribution fees Class A | 12,629 | 69,832 | 82,461 | |||||||||||||
Distribution fees Class B | 34,457 | 18,150 | — | 52,607 | ||||||||||||
Distribution fees Class C | 576 | 392 | — | 968 | ||||||||||||
Administrative servicing fees Class A | 1,184 | 39,352 | — | 40,536 | ||||||||||||
Administrative servicing fees Class D | 24,630 | — | — | 24,630 | ||||||||||||
Administrative servicing fees Institutional Service Class | — | 15,570 | — | 15,570 | ||||||||||||
Professional fees | 43,581 | 749 | — | 44,330 | ||||||||||||
Registration and filing fees | 53,266 | 30,834 | (30,000 | )(b) | 54,100 | |||||||||||
Printing expenses | 116,699 | 851 | — | 117,550 | ||||||||||||
Other | 40,825 | 17,825 | — | 58,650 | ||||||||||||
Total expenses before waived or reimbursed expenses | 2,535,469 | 547,175 | (110,927 | ) | 2,971,717 | |||||||||||
Expenses waived or reimbursed | — | (25,347 | ) | 25,347 | — | |||||||||||
Total Expenses | 2,535,469 | 521,828 | (85,580 | ) | 2,971,717 | |||||||||||
Net Investment Income (Loss) | 113,604 | (127,661 | ) | 85,580 | 71,523 | |||||||||||
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS: | ||||||||||||||||
Net realized gains (losses) on investment transactions | (83,924,915 | ) | (11,285,246 | ) | — | (95,210,161 | ) | |||||||||
Net change in unrealized appreciation/depreciation on investments | 15,540,460 | 4,147,626 | — | 19,688,086 | ||||||||||||
Net realized /unrealized gains (losses) on investments | (68,384,455 | ) | (7,137,620 | ) | — | (75,522,075 | ) | |||||||||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (68,270,851 | ) | $ | (7,265,281 | ) | $ | 85,580 | $ | (75,450,552 | ) | |||||
(a) | Change based on assumption that current advisory fee structure for the Gartmore Growth Fund would have been in place during the period. |
(b) | Change based on assumption that cost would decrease due to a reduction in duplication of state registration cost. |
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Gartmore Mutual Funds
Notes to Pro Forma Financial Statements
(Unaudited)
1. Basis of Combination:
The unaudited Pro Forma Combining Statements of Assets and Liabilities, Statements of Operations, and Schedule of Portfolio Investments reflect the accounts of two investment portfolios offered by Gartmore Mutual Funds, an Ohio business trust (the “Trust”): Nationwide Large Cap Growth Fund (“Large Cap Growth Fund”) and Gartmore Growth Fund (“Growth Fund”) (individually a “Fund,” collectively the “Funds”) as if the proposed reorganization (the “Reorganization”) occurred as of and for the year ended April 30, 2003 and taking into account contractual fee changes expected to have a continuing impact on the Funds. These statements have been derived from books and records utilized in calculating daily net asset value at April 30, 2003.
The Plan of Reorganization provides that the Growth Fund would acquire all of the assets and subject to liabilities, of the Large Cap Growth Fund in exchange solely for corresponding classes of the Growth Fund’s shares. The Reorganization is anticipated to occur on or about December 22, 2003 (the “Closing Date”).
For accounting purposes, the historical basis of assets and liabilities of the Growth Fund will survive the Reorganization.
In exchange for the transfer of assets, subject to liabilities, the Growth Fund will issue to the Large Cap Growth Fund full and fractional shares of the corresponding class of the Growth Fund, and the Large Cap Growth Fund will make a liquidating distribution of such shares to its shareholders. The value of the shares of the Growth Fund so issued will be equal in value to the full and fractional shares of the Large Cap Growth Fund that are outstanding immediately prior to the Reorganization. At and after the Reorganization, all debts, liabilities and obligations of the Large Cap Growth Fund will attach to the assets so transferred to the Growth Fund and may thereafter be enforced against the Growth Fund to the extent of the assets received as if such liabilities had been incurred by it.
The following is a summary of significant accounting policies followed by each Fund in preparation of its financial statements. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Under generally accepted accounting principles, the Growth Fund’s basis, for purposes of determining net asset value, of the assets and liabilities of the Large Cap Growth Fund will be the fair market value of such assets and liabilities computed as of the close of regular trading of the New York Stock Exchange (normally 4:00 p.m. eastern time) on the business day proceeding the Closing Date. The Growth Fund will recognize no gain or loss for federal tax purposes on its issuance of shares in the Reorganization.
It is the Growth Fund’s intention to qualify as a regulated investment company under the Internal Revenue Code and to distribute all of its taxable income, including any net realized gains to shareholders. Net investment income and short-term gains are taxed as ordinary income.
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Gartmore Mutual Funds
Notes to Pro Forma Financial Statements—Continued
(Unaudited)
Accordingly, no provision for federal taxes is required in the financial statements.
The accompanying pro forma financial statements represent the Growth Fund, and reflect the combined results of operations of the Growth Fund. However, should the Reorganization be effected, the historical statements of operations of the Growth Fund will not be restated to take into account the addition of the Large Cap Growth Fund’s assets and liabilities. The Pro Forma Combining Statements of Assets and Liabilities, Statements of Operations, and Schedules of Portfolio Investments should be read in conjunction with the historical financial statements of the Funds incorporated by reference into the Statement of Additional Information.
2. Expenses:
Investment Advisory Fees:
Under the terms of an Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“Gartmore”) manages the investment of the assets and supervises the daily business affairs of the Funds. Gartmore also provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser for the Large Cap Growth Fund. Goldman Sachs Asset Management, L.P. (“GSAM”) manages all of the Large Cap Growth Fund’s investments and has the responsibility for making all of the day-to-day investment decisions for the Large Cap Growth Fund.
Under the terms of the Investment Advisory Agreement, the Funds pay Gartmore an annual investment advisory fee based on that Fund’s average daily net assets. From such fees, for the Large Cap Growth Fund, pursuant to the sub-advisory agreement, Gartmore pays fees to GSAM. Additional information regarding investment advisory fees for Gartmore and the subadvisory fee is as follows for the year ended April 30, 2003:
Fund | Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | ||||
Growth Fund | Up to $250 million On the next $750 million On the next $1 billion On the next $3 billion On $5 billion and more | 0.60% 0.575% 0.55% 0.525% 0.50% | 0.60% 0.575% 0.55% 0.525% 0.50% | N/A | ||||
Large Cap Growth Fund | Up to $150 million On $150 million and more | 0.80% 0.70% | 0.40% 0.40% | 0.40% 0.30% |
Fund Administration and Transfer Agency Fees:
Under the terms of a Fund Administration Agreement, Gartmore SA Capital Trust (“GSA”) provides various administrative and accounting services to the Funds. Gartmore Investor Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Funds. The fees for the services provided under both agreements are combined and calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then
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Gartmore Mutual Funds
Notes to Pro Forma Financial Statements—Continued
(Unaudited)
allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for its services.
Combined Fee Schedule* | ||||
Up to $1 billion | 0.25 | % | ||
$1 billion and more up to $3 billion | 0.18 | % | ||
$3 billion and more up to $4 billion | 0.14 | % | ||
$4 billion and more up to $5 billion | 0.07 | % | ||
$5 billion and more up to $10 billion | 0.04 | % | ||
$10 billion and more up to $12 billion | 0.02 | % | ||
$12 billion or more | 0.01 | % |
* | The assets of the Gartmore Investor Destinations Aggressive Fund, Gartmore Investor Destinations Moderately Aggressive Fund, Gartmore Investor Destinations Moderate Fund, Gartmore Investor Destinations Moderately Conservative Fund and Gartmore Investor Destinations Conservative Fund (together, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
Pro Forma Adjustments and Pro Forma Combined Columns:
The pro forma adjustments and pro forma combined columns of the Statements of Operations reflect the adjustments necessary to show expenses at the rates which would have been in effect if the Large Cap Growth Fund was included in the Growth Fund for the year ended April 30, 2003. The investment advisory fee in the pro forma combined column is calculated at the rate in effect for the Growth Fund based upon the combined net assets of the Large Cap Growth Fund and the Growth Fund.
The pro forma Schedule of Portfolio Investments give effect to the proposed transfer of such assets as if the Reorganization had occurred at April 30, 2003.
Reorganization Expenses:
The expenses of completing the Reorganization, including the costs of the solicitation of proxies, will be paid by Gartmore or one of its affiliates, not by either of the Funds or their shareholders.
3. Portfolio Valuation, Securities Transactions and Related Income:
Securities for which market quotations are readily available are valued at current market value as of Valuation Time. Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price, or if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Prices are taken from the primary market or exchange in which each security trades.
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Gartmore Mutual Funds
Notes to Pro Forma Financial Statements—Continued
(Unaudited)
Debt and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgement of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees.
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
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Gartmore Growth Fund / Nationwide Large Cap Growth Fund
Proforma Combined Schedule of Portfolio Investments | April 30, 2003 |
(Unaudited)
Fund 1 represents Gartmore Growth Fund. Fund 2 represents the Nationwide Large Cap Growth Fund.
Fund 1 Shares/Principal | Fund 2 Shares | Proforma Combined Shares/ Principal | Security Description | Fund 1 Market Value | Fund 2 Market Value | Proforma Combined Market Value | |||||||||
Common Stocks (100.2%) | |||||||||||||||
Aerospace / Defense (1.0%) | |||||||||||||||
60,000 | 60,000 | Lockheed Martin Corp. | $ | 3,003,000 | $ | $ | 3,003,000 | ||||||||
Agricultural Operations (0.1%) | |||||||||||||||
2,700 | 2,700 | Monsanto Co. | | 46,980 | | 46,980 | |||||||||
Airlines (0.5%) | |||||||||||||||
48,000 | 48,000 | JetBlue Airways Corp. (b) | | 1,508,640 | | 1,508,640 | |||||||||
Analytical Instruments (0.2%) | |||||||||||||||
11,700 | 11,700 | Applera Corp.—Applied Biosystems Group | 205,101 | 205,101 | |||||||||||
11,500 | 11,500 | Waters Corp. (b) | | 276,115 | | 276,115 | |||||||||
| 481,216 | | 481,216 | ||||||||||||
Automotive (1.2%) | |||||||||||||||
44,400 | 44,400 | Advance Auto Parts, Inc. (b) | 2,208,456 | 2,208,456 | |||||||||||
32,500 | 32,500 | Harley-Davidson, Inc. | | 1,444,300 | | 1,444,300 | |||||||||
| 3,652,756 | | 3,652,756 | ||||||||||||
Banks (0.6%) | |||||||||||||||
4,700 | 4,700 | Bank of America Corp. | 348,035 | 348,035 | |||||||||||
43,500 | 43,500 | North Fork Bancorp., Inc. | | 1,407,660 | | 1,407,660 | |||||||||
| 1,407,660 | | 348,035 | | 1,755,695 | ||||||||||
Batteries (0.0%) | |||||||||||||||
1 | 1 | Energizer Holdings, Inc. (b) | | 29 | | 29 | |||||||||
Biotechnology (2.3%) | |||||||||||||||
110,000 | 7,688 | 117,688 | Amgen, Inc. (b) | | 6,744,100 | | 471,351 | | 7,215,451 | ||||||
Broadcast Media / Cable Television (4.4%) | |||||||||||||||
238,700 | 238,700 | AOL Time Warner, Inc. (b) | 3,265,416 | 3,265,416 | |||||||||||
106,300 | 6,000 | 112,300 | Clear Channel Communications, Inc. (b) | 4,157,393 | 234,660 | 4,392,053 | |||||||||
59,000 | 12,400 | 71,400 | Fox Entertainment Group, Inc. (b) | 1,498,600 | 314,960 | 1,813,560 | |||||||||
2,200 | 2,200 | The McGraw-Hill Companies, Inc. | 128,458 | 128,458 | |||||||||||
86,000 | 4,770 | 90,770 | Viacom, Inc. Class B (b) | | 3,733,260 | | 207,066 | | 3,940,326 | ||||||
| 12,654,669 | | 885,144 | | 13,539,813 | ||||||||||
Business Services (2.0%) | |||||||||||||||
68,000 | 68,000 | Aramark Corp. | 1,561,280 | 1,561,280 | |||||||||||
8,300 | 8,300 | Bearingpoint, Inc. (b) | 67,811 | 67,811 | |||||||||||
72,800 | 4,600 | 77,400 | First Data Corp. | 2,855,944 | 180,458 | 3,036,402 | |||||||||
50,000 | 50,000 | Fiserv, Inc. (b) | | 1,472,000 | | 1,472,000 | |||||||||
5,889,224 | 248,269 | 6,137,493 | |||||||||||||
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Capital Goods (4.9%) | ||||||||||||
451,900 | 68,000 | 519,900 | General Electric Co. | 13,308,455 | 2,002,600 | 15,311,055 | ||||||
Chemicals (0.4%) | ||||||||||||
23,000 | 23,000 | Praxair, Inc. | 1,335,840 | 1,335,840 | ||||||||
Commercial Services (0.1%) | ||||||||||||
4,500 | 4,500 | Deluxe Corp. | 198,045 | 198,045 | ||||||||
Communication Equipment (1.1%) | ||||||||||||
15,300 | 15,300 | Motorola, Inc. | 121,023 | 121,023 | ||||||||
200,000 | 200,000 | Zimmer Holdings, Inc. (b) | 3,314,000 | 3,314,000 | ||||||||
3,314,000 | 121,023 | 3,435,023 | ||||||||||
Communications (0.0%) | ||||||||||||
900 | 900 | Comcast Corp. Class A | 28,719 | 28,719 | ||||||||
Computer Data Security (0.1%) | ||||||||||||
10,500 | 10,500 | SanDisk Corp. (b) | 254,100 | 254,100 | ||||||||
Computer Equipment (3.9%) | ||||||||||||
220,000 | 29,600 | 249,600 | Dell Computer Corp. (b) | 6,360,200 | 855,736 | 7,215,936 | ||||||
340,000 | 340,000 | EMC Corp. (b) | 3,090,600 | 3,090,600 | ||||||||
2,100 | 2,100 | Hewlett-Packard Co. | 34,230 | 34,230 | ||||||||
14,000 | 2,200 | 16,200 | International Business Machines Corp. | 1,188,600 | 186,780 | 1,375,380 | ||||||
4,000 | 4,000 | Lexmark International Group, Inc. Class A | 298,040 | 298,040 | ||||||||
10,639,400 | 1,374,786 | 12,014,186 | ||||||||||
Computer Networks (2.0%) | ||||||||||||
385,000 | 36,000 | 421,000 | Cisco Systems, Inc. (b) | 5,790,400 | 541,440 | 6,331,840 | ||||||
Computer Software & Services (10.0%) | ||||||||||||
42,000 | 42,000 | Affiliated Computer Services, Inc. Class A (b) | 2,003,400 | 2,003,400 | ||||||||
12,000 | 12,000 | BMC Software, Inc. (b) | 179,040 | 179,040 | ||||||||
72,000 | 72,000 | Cognos, Inc. (b) | 1,954,080 | 1,954,080 | ||||||||
5,000 | 5,000 | Electronic Arts, Inc. (b) | 296,350 | 296,350 | ||||||||
1,500 | 1,500 | Intuit, Inc. (b) | 58,170 | 58,170 | ||||||||
70,000 | 70,000 | Mercury Interactive Corp. | 2,375,800 | 2,375,800 | ||||||||
484,000 | 75,900 | 559,900 | Microsoft Corp. | 12,375,880 | 1,940,763 | 14,316,643 | ||||||
265,000 | 40,800 | 305,800 | Oracle Corp. (b) | 3,148,200 | 484,704 | 3,632,904 | ||||||
58,500 | 58,500 | SAP AG ADR | 1,492,335 | 1,492,335 | ||||||||
10,300 | 10,300 | SunGard Data Systems, Inc. (b) | 221,450 | 221,450 | ||||||||
82,800 | 8,600 | 91,400 | Symantec Corp. (b) | 3,639,060 | 377,970 | 4,017,030 | ||||||
3,500 | 3,500 | Unisys Corp. (b) | 36,400 | 36,400 | ||||||||
26,988,755 | 3,594,847 | 30,583,602 | ||||||||||
Conglomerates (0.4%) | ||||||||||||
10,200 | 10,200 | 3M Co. | 1,285,608 | 1,285,608 | ||||||||
Construction & Building Materials (0.1%) | ||||||||||||
5,700 | 5,700 | Sherwin-Williams Co. | 158,916 | 158,916 | ||||||||
Consumer Non-Cyclical (0.0%) | ||||||||||||
4,000 | 4,000 | Estee Lauder Co., Inc. (The) Class A | 130,000 | 130,000 | ||||||||
Consumer Products (2.2%) |
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27,100 | 27,100 | Alberto-Culver Co. Class B | 1,335,488 | 1,335,488 | ||||||||
2,500 | 2,500 | Avon Products, Inc. | 145,425 | 145,425 | ||||||||
4,300 | 4,300 | Clorox Co. (The) | 194,446 | 194,446 | ||||||||
6,500 | 6,500 | Colgate-Palmolive Co. | 371,605 | 371,605 | ||||||||
43,990 | 7,900 | 51,890 | The Procter & Gamble Co. | 3,952,502 | 709,815 | 4,662,317 | ||||||
1,800 | 1,800 | Whirlpool Corp. | 96,282 | 96,282 | ||||||||
5,287,990 | 1,517,573 | 6,805,563 | ||||||||||
Containers (0.1%) | ||||||||||||
4,100 | 4,100 | Ball Corp. | 230,256 | 230,256 | ||||||||
Credit Reporting Services (0.1%) | ||||||||||||
8,100 | 8,100 | Moody’s, Inc. | 391,149 | 391,149 | ||||||||
Crude Petroleum & Natural Gas (0.0%) | ||||||||||||
1,866 | 1,866 | XTO Energy, Inc. | 36,387 | 36,387 | ||||||||
Drugs (12.0%) | ||||||||||||
65,000 | 6,100 | 71,100 | Abbott Laboratories | 2,640,950 | 247,843 | 2,888,793 | ||||||
800 | 800 | Biogen, Inc. (b) | 30,392 | 30,392 | ||||||||
31,000 | 31,000 | Biovail Corp. (b) | 1,120,650 | 1,120,650 | ||||||||
4,400 | 4,400 | Chiron Corp. (b) | 179,652 | 179,652 | ||||||||
1,700 | 1,700 | Eli Lilly & Co. | 108,494 | 108,494 | ||||||||
600 | 600 | Forest Laboratories, Inc. Class A | 31,032 | 31,032 | ||||||||
4,100 | 4,100 | Genentech, Inc. | 155,759 | 155,759 | ||||||||
13,000 | 13,000 | Medicis Pharmaceutical Corp. (b) | 749,320 | 749,320 | ||||||||
9,600 | 9,600 | Medimmune, Inc. (b) | 338,592 | 338,592 | ||||||||
109,600 | 16,400 | 126,000 | Merck & Co., Inc. | 6,376,528 | 954,152 | 7,330,680 | ||||||
530,160 | 64,355 | 594,515 | Pfizer, Inc. | 16,302,420 | 1,978,917 | 18,281,337 | ||||||
50,000 | 50,000 | Teva Pharmaceutical Industries Ltd. | 2,335,000 | 2,335,000 | ||||||||
98,300 | 1,900 | 100,200 | Wyeth | 4,278,999 | 82,707 | 4,361,706 | ||||||
33,803,867 | 4,107,540 | 37,911,407 | ||||||||||
Drugs & Healthcare (0.2%) | ||||||||||||
4,200 | 4,200 | Aetna, Inc. | 209,160 | 209,160 | ||||||||
8,400 | 8,400 | Health Net, Inc. (b) | 219,156 | 219,156 | ||||||||
4,000 | 4,000 | Humana, Inc. (b) | 44,200 | 44,200 | ||||||||
472,516 | 472,516 | |||||||||||
Educational Services (0.0%) | ||||||||||||
1,700 | 1,700 | Apollo Group, Inc. (b) | 92,138 | 92,138 | ||||||||
Electric Services (0.0%) | ||||||||||||
5,550 | 5,550 | Vishay Intertechnology, Inc. (b) | 69,375 | 69,375 | ||||||||
Electrical Equipment (0.1%) | ||||||||||||
2,600 | 2,600 | Agilent Technologies, Inc. (b) | 41,652 | 41,652 | ||||||||
3,300 | 3,300 | Grainger (W.W.), Inc. | 152,295 | 152,295 | ||||||||
1,800 | 1,800 | Rockwell International Corp. | 41,040 | 41,040 | ||||||||
234,987 | 234,987 | |||||||||||
Electronics (0.2%) | ||||||||||||
7,300 | 7,300 | Arrow Electronics, Inc. (b) | 123,224 | 123,224 | ||||||||
14,800 | 14,800 | Avnet, Inc.(b) | 188,700 | 188,700 | ||||||||
1,800 | 1,800 | Fisher Scientific International, Inc. (b) | 51,858 | 51,858 | ||||||||
6,200 | 6,200 | Jabil Circuit, Inc. (b) | 115,940 | 115,940 |
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479,722 | 479,722 | |||||||||||
Entertainment (0.2%) | ||||||||||||
22,600 | 22,600 | Carnival Corp. | 623,534 | 623,534 | ||||||||
Financial (0.0%) | ||||||||||||
1,200 | 1,200 | Countrywide Credit Industries, Inc. | 81,120 | 81,120 | ||||||||
Financial / Banks (0.1%) | ||||||||||||
3,500 | 3,500 | Bear Stearns Cos., Inc. | 233,940 | 233,940 | ||||||||
Financial Services (8.5%) | ||||||||||||
77,100 | 8,900 | 86,000 | American Express Co. | 2,919,006 | 336,954 | 3,255,960 | ||||||
52,500 | 52,500 | Capital One Financial Corp. | 2,198,175 | 2,198,175 | ||||||||
115,000 | 9,800 | 124,800 | Citigroup, Inc. | 4,513,750 | 384,650 | 4,898,400 | ||||||
71,500 | 2,900 | 74,400 | Fannie Mae | 5,175,885 | 209,931 | 5,385,816 | ||||||
24,600 | 3,800 | 28,400 | Freddie Mac | 1,424,340 | 220,020 | 1,644,360 | ||||||
50,000 | 50,000 | Legg Mason, Inc. | 2,715,000 | 2,715,000 | ||||||||
3,700 | 3,700 | Lehman Brothers Holdings, Inc. | 232,989 | 232,989 | ||||||||
6,300 | 6,300 | Marsh & McLennan Cos., Inc. | 300,384 | 300,384 | ||||||||
77,500 | 15,250 | 92,750 | MBNA Corp. | 1,464,750 | 288,225 | 1,752,975 | ||||||
45,600 | 45,600 | Morgan Stanley | 2,040,600 | 2,040,600 | ||||||||
8,400 | 8,400 | Prudential Financial, Inc. | 268,548 | 268,548 | ||||||||
1,300 | 1,300 | SLM Corp. | 145,600 | 145,600 | ||||||||
31,650 | 31,650 | Wells Fargo & Co. | 1,527,429 | 1,527,429 | ||||||||
23,978,935 | 2,387,301 | 26,366,236 | ||||||||||
Food & Beverage (4.3%) | ||||||||||||
105,900 | 5,500 | 111,400 | Coca-Cola Co. | 4,278,360 | 222,200 | 4,500,560 | ||||||
25,000 | 25,000 | Kellogg Co. | 818,500 | 818,500 | ||||||||
9,300 | 9,300 | Kraft Foods, Inc. Class A | 287,370 | 287,370 | ||||||||
140,000 | 5,600 | 145,600 | PepsiCo, Inc. | 6,059,200 | 242,368 | 6,301,568 | ||||||
1,000 | 1,000 | Performance Food Group Co. (b) | 35,080 | 35,080 | ||||||||
34,000 | 17,700 | 51,700 | Sysco Corp. | 976,820 | 508,521 | 1,485,341 | ||||||
12,132,880 | 1,295,539 | 13,428,419 | ||||||||||
Food / Beverage & Related (0.1%) | ||||||||||||
3,100 | 3,100 | Archer-Daniels-Midland Co. | 34,348 | 34,348 | ||||||||
21,500 | 21,500 | Tyson Foods, Inc. Class | 207,045 | 207,045 | ||||||||
241,393 | 241,393 | |||||||||||
Freight Transportation (0.0%) | ||||||||||||
2,300 | 2,300 | Airborne, Inc. | 45,678 | 45,678 | ||||||||
Gold Ores (0.0%) | ||||||||||||
5,400 | 5,400 | Freeport-McMoRan Copper & Gold, Inc. | 93,474 | 93,474 | ||||||||
Health Services (0.1%) | ||||||||||||
6,200 | 6,200 | PacifiCare Health Systems, Inc. (b) | 197,408 | 197,408 | ||||||||
Healthcare (8.6%) | ||||||||||||
5,200 | 5,200 | Becton Dickinson & Co. | 184,080 | 184,080 | ||||||||
75,000 | 9,900 | 84,900 | Boston Scientific Corp. (b) | 3,228,750 | 426,195 | 3,654,945 | ||||||
20,000 | 8,618 | 28,618 | Cardinal Health, Inc. | 1,105,600 | 476,403 | 1,582,003 | ||||||
36,000 | 36,000 | Express Scripts, Inc. (b) | 2,122,560 | 2,122,560 | ||||||||
184,400 | 27,400 | 211,800 | Johnson & Johnson | 10,392,784 | 1,544,263 | 11,937,047 |
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50,000 | 3,300 | 53,300 | Medtronic, Inc. | 2,387,000 | 157,542 | 2,544,542 | ||||||
40,000 | 40,000 | St. Jude Medical, Inc. (b) | 2,098,400 | 2,098,400 | ||||||||
1,600 | 1,600 | Stryker Corp. | 107,216 | 107,216 | ||||||||
17,500 | 2,100 | 19,600 | UnitedHealth Group, Inc. | 1,612,275 | 193,473 | 1,805,748 | ||||||
8,800 | 8,800 | WellPoint Health Networks, Inc. (b) | 668,272 | 668,272 | ||||||||
23,615,641 | 3,089,172 | 26,704,813 | ||||||||||
Hospital & Medical Service Plans (0.0%) | ||||||||||||
1,000 | 1,000 | Mid Atlantic Medical Services, Inc. (b) | 43,550 | 43,550 | ||||||||
Insurance (1.6%) | ||||||||||||
84,000 | 1,600 | 85,600 | American International Group, Inc. | 4,867,800 | 92,720 | 4,960,520 | ||||||
2,700 | 2,700 | CNA Financial Corp. (b) | 64,665 | 64,665 | ||||||||
3,800 | 3,800 | MetLife, Inc. | 109,174 | 109,174 | ||||||||
4,867,800 | 266,559 | 5,134,359 | ||||||||||
Life Insurance (0.1%) | ||||||||||||
7,500 | 7,500 | Principal Financial Group | 218,250 | 218,250 | ||||||||
Manufacturing (0.7%) | ||||||||||||
29,900 | 29,900 | Danaher Corp. | 2,062,502 | 2,062,502 | ||||||||
Medical Products (1.4%) | ||||||||||||
52,500 | 2,100 | 54,600 | Genzyme Corp. (b) | 2,114,700 | 84,588 | 2,199,288 | ||||||
40,000 | 8,600 | 48,600 | Zimmer Holdings, Inc. (b) | 1,876,000 | 403,340 | 2,279,340 | ||||||
3,990,700 | 487,928 | 4,478,628 | ||||||||||
Metal Processors (0.0%) | ||||||||||||
1,800 | 1,800 | Thermo Electron Corp. (b) | 32,706 | 32,706 | ||||||||
Multimedia (0.0%) | ||||||||||||
2,900 | 2,900 | Cox Radio, Inc. (b) | 66,149 | 66,149 | ||||||||
3,600 | 3,600 | Hearst - Argyle Television, Inc. (b) | 86,724 | 86,724 | ||||||||
152,873 | 152,873 | |||||||||||
Oil & Gas (1.2%) | ||||||||||||
21,340 | 21,340 | Apache Corp. | 1,221,715 | 1,221,715 | ||||||||
55,000 | 55,000 | Murphy Oil Corp. | 2,290,750 | 2,290,750 | ||||||||
14,700 | 14,700 | Transocean Sedco Forex, Inc. | 280,035 | 280,035 | ||||||||
3,512,465 | 280,035 | 3,792,500 | ||||||||||
Oil Equipment & Services (0.1%) | ||||||||||||
8,900 | 8,900 | Halliburton Co. | 190,549 | 190,549 | ||||||||
Pharmaceuticals (0.1%) | ||||||||||||
9,300 | 9,300 | McKesson Corp. | 257,982 | 257,982 | ||||||||
4,800 | 4,800 | Millenium Pharmaceuticals, Inc. (b) | 52,800 | 52,800 | ||||||||
310,782 | 310,782 | |||||||||||
Photography (0.0%) | ||||||||||||
4,500 | 4,500 | Eastman Kodak Co. | 134,595 | 134,595 | ||||||||
Restaurants (0.9%) | ||||||||||||
40,000 | 40,000 | Applebee’s International, Inc. | 1,096,000 | 1,096,000 | ||||||||
57,200 | 57,200 | Brinker International, Inc. (b) | 1,816,100 | 1,816,100 | ||||||||
2,912,100 | 2,912,100 | |||||||||||
Table of Contents
Retail (11.8%) | ||||||||||||
48,000 | 48,000 | Abercrombie & Fitch Co. (b) | 1,578,240 | 1,578,240 | ||||||||
14,500 | 14,500 | Amazon.com, Inc. (b) | 415,715 | 415,715 | ||||||||
8,500 | 8,500 | CVS Corp. | 205,785 | 205,785 | ||||||||
2,000 | 2,000 | Dillard’s, Inc., Class A | 27,960 | 27,960 | ||||||||
142,500 | 5,400 | 147,900 | Home Depot, Inc. | 4,008,525 | 151,902 | 4,160,427 | ||||||
49,000 | 49,000 | Kohl’s Corp. (b) | 2,783,200 | 2,783,200 | ||||||||
140,000 | 140,000 | Lowe’s Companies, Inc. | 6,144,600 | 6,144,600 | ||||||||
18,600 | 18,600 | Penney (J.C), Co., Inc. | 317,316 | 317,316 | ||||||||
1,000 | 1,000 | Ross Stores, Inc. | 37,900 | 37,900 | ||||||||
7,900 | 7,900 | Saks, Inc. (b) | 70,705 | 70,705 | ||||||||
21,200 | 21,200 | Staples, Inc. (b) | 403,648 | 403,648 | ||||||||
14,600 | 14,600 | Starbucks Corp. (b) | 342,954 | 342,954 | ||||||||
2,100 | 2,100 | Supervalu, Inc. | 34,587 | 34,587 | ||||||||
164,000 | 164,000 | Target Corp. | 5,484,160 | 5,484,160 | ||||||||
313,500 | 313,500 | The Gap, Inc. | 5,213,505 | 5,213,505 | ||||||||
4,100 | 4,100 | TJX Cos., Inc. | 78,925 | 78,925 | ||||||||
6,100 | 6,100 | Toys ‘R’ Us, Inc. (b) | 62,525 | 62,525 | ||||||||
102,597 | 27,600 | 130,197 | Wal-Mart Stores, Inc. | 5,778,263 | 1,554,432 | 7,332,695 | ||||||
54,000 | 6,500 | 60,500 | Williams-Sonoma, Inc. (b) | 1,397,520 | 168,220 | 1,565,740 | ||||||
32,388,013 | 3,872,574 | 36,260,587 | ||||||||||
Semiconductors (7.7%) | ||||||||||||
1,000,000 | 1,000,000 | Agere Systems, Inc. Class A (b) | 1,790,000 | 1,790,000 | ||||||||
62,600 | 62,600 | Analog Devices, Inc. (b) | 2,073,312 | 2,073,312 | ||||||||
123,000 | 4,400 | 127,400 | Applied Materials, Inc. (b) | 1,795,800 | 64,240 | 1,860,040 | ||||||
141,000 | 141,000 | Emulex Corp.(b) | 2,889,090 | 2,889,090 | ||||||||
508,600 | 48,000 | 556,600 | Intel Corp. | 9,358,240 | 883,200 | 10,241,440 | ||||||
33,000 | 33,000 | KLA-Tencor Corp. (b) | 1,353,000 | 1,353,000 | ||||||||
45,300 | 45,300 | Maxim Integrated Products, Inc. | 1,779,837 | 1,779,837 | ||||||||
50,000 | 50,000 | Novellus Systems, Inc. (b) | 1,402,000 | 1,402,000 | ||||||||
7,000 | 7,000 | Texas Instruments, Inc. | 129,430 | 129,430 | ||||||||
22,441,279 | 1,076,870 | 23,518,149 | ||||||||||
Services (0.1%) | ||||||||||||
5,300 | 5,300 | Manpower, Inc. | 174,264 | 174,264 | ||||||||
Technology (0.0%) | ||||||||||||
11,800 | 11,800 | Ingram Micro, Inc. (b) | 118,000 | 118,000 | ||||||||
Telecommunications (2.3%) | ||||||||||||
3,500 | 3,500 | Advanced Fibre Communications, Inc. (b) | 53,550 | 53,550 | ||||||||
305,000 | 8,800 | 313,800 | AT&T Wireless Services, Inc. (b) | 1,970,300 | 56,848 | 2,027,148 | ||||||
64,000 | 64,000 | Juniper Networks, Inc. | 654,080 | 654,080 | ||||||||
2,600 | 2,600 | Nextel Communications, Inc. (b) | 38,454 | 38,454 | ||||||||
52,500 | 16,400 | 68,900 | Qualcomm, Inc. | 1,674,225 | 522,996 | 2,197,221 | ||||||
14,900 | 14,900 | Qwest Communications International, Inc. (b) | 56,173 | 56,173 | ||||||||
11,600 | 11,600 | SBC Communications, Inc. | 270,976 | 270,976 | ||||||||
7,400 | 7,400 | Sprint Corp. (FON Group) | 85,174 | 85,174 | ||||||||
3,100 | 3,100 | US Cellular Corp. (b) | 74,555 | 74,555 | ||||||||
40,600 | 40,600 | Verizon Communications, Inc. | 1,517,628 | 1,517,628 | ||||||||
1 | 1 | Worldcom, Inc. (b) | 0 | 0 | ||||||||
5,816,233 | 1,158,726 | 6,974,959 | ||||||||||
Table of Contents
Telephone Communication (0.0%) | ||||||||||||||||
8,900 | 8,900 | PanAmSat Corp. (b) | 153,970 | 153,970 | ||||||||||||
Video Tape Rental (0.0%) | ||||||||||||||||
3,500 | 3,500 | Blockbuster, Inc. | 62,580 | 62,580 | ||||||||||||
Waste Disposal (0.0%) | ||||||||||||||||
2,800 | 2,800 | Waste Management, Inc. | 60,816 | 60,816 | ||||||||||||
Wholesale Durable Goods (0.1%) | ||||||||||||||||
10,600 | 10,600 | Petsmart, Inc. (b) | 160,378 | 160,378 | ||||||||||||
Total Common Stock | 274,956,446 | 35,138,173 | 310,094,619 | |||||||||||||
Commercial Paper (0.5%) | ||||||||||||||||
Insurance (0.5%) | ||||||||||||||||
$1,517,000 | $ | 1,517,000 | Allstate Corp., 1.34%, 05/01/03 | 1,517,000 | 1,517,000 | |||||||||||
Total Commercial Paper | 1,517,000 | 1,517,000 | ||||||||||||||
Total Investments—100.7% (Cost $259,701,604; $37,874,268 and $297,575,872; Respectively) (a) | $ | 276,473,446 | $ | 35,138,173 | $ | 311,611,619 | ||||||||||
(a) | Cost for federal income tax and financial reporting purposed differ from value by net unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
The categories of investments are shown as a percentage of the proforma combined net assets.
See notes to financial statements.
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ATTACHMENTS TO SAI (PAGE 3 OF 4)
GARTMORE MUTUAL FUNDS ANNUAL REPORTS
TO SHAREHOLDERS, FOR THE YEAR ENDED OCTOBER 31, 2002
The Gartmore Mutual Funds Annual Reports to Shareholders for the Gartmore Growth Fund and the Nationwide Large Cap Growth Fund, for the year ended October 31, 2002, are part of this SAI and will be provided to all shareholders requesting this SAI. For purposes of this EDGAR filing, the above-referenced shareholder reports are incorporated herein by reference to the electronic filings made on January 10, 2003, pursuant to Rule 30d-1 [File No. 811-08495].
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ATTACHMENTS TO SAI (PAGE 4 OF 4)
GARTMORE MUTUAL FUNDS SEMI-ANNUAL REPORTS
TO SHAREHOLDERS, FOR THE PERIOD ENDED APRIL 30, 2003
The Gartmore Mutual Funds Semi-Annual Reports to Shareholders for the Gartmore Growth Fund and the Nationwide Large Cap Growth Fund, for the period ended April 30, 2003, are part of this SAI and will be provided to all shareholders requesting this SAI. For purposes of this EDGAR filing, the above-referenced shareholder reports are incorporated herein by reference to the electronic filing made on July 10, 2003, pursuant to Rule 30d-1 [File No. 811-08495].
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GARTMORE MUTUAL FUNDS
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
Section 5.1 of Gartmore Mutual Funds’ Amended Declaration of Trust provides as follows:
No Trustee, officer, employee or agent of the Trust shall be subject to any personal liability whatsoever to any Person, other than the Trust or its Shareholders, in connection with Trust Property or the affairs of the Trust, except that arising from bad faith, willful misfeasance, gross negligence or reckless disregard for his duty to such Person; and all such Persons shall look solely to the Trust Property for satisfaction of claims of any nature arising in connection with the affairs of the Trust.
No Shareholder as such shall be subject to any personal liability whatsoever to any Person in connection with Trust Property or the acts, obligations or affairs of the Trust. If any Shareholder or former Shareholder shall be charged or held personally liable for any obligation or liability of the Trust solely by reason of being or having been a Shareholder and not because (upon proper and timely request by the Shareholder) shall assume the defense against such charge and satisfy any judgment or settlement thereon, and the Shareholder or former Shareholder (or his heirs, executors, administrators or corporate or other general successor) shall be entitled out of the assets of the Trust Property to be held harmless from and indemnified against all loss and expense arising from such liability.
The exercise by the Trustees of their powers and discretion hereunder shall be binding upon everyone interested. A Trustee shall be liable for his own duties involved in the conduct of the office of Trustee, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law. Subject to the foregoing, (a) the Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, consultant, Investment Adviser, Distributor, Administrator, or Transfer Agent of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee; and (b) the Trustees may rely on the advice of counsel or experts as described in Section 5.6 below.
Section 5.2. of Gartmore Mutual Funds’ Amended Declaration of Trust provides as follows:
(a) | Subject to the exceptions and limitations contained in paragraph (b) below: |
(i) | Every person who is, or has been a Trustee or officer of the Trust shall be indemnified by the Trust against all liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or |
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having been a Trustee or officer and against amounts paid or incurred by him in the settlement thereof. |
(ii) | The words “claim,” “action”, “suit” or “proceeding” shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened; and the words “liability” and “expenses” shall include, without limitation, attorneys’ fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities. |
(b) | No indemnification shall be provided hereunder to a Trustee or officer: |
(i) | against any liability to the Trust or the Shareholders by reason of a final adjudication by the court or other body before which the proceeding was brought that he engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office; |
(ii) | with respect to any matter as to which he shall have been finally adjudicated not to have acted in good faith or in the reasonable belief that his action was in or not opposed to the best interest of the Trust; or |
(iii) | in the event of a settlement or other disposition not involving a final adjudication as provided in paragraphs (b)(i) or (b)(ii) resulting in a payment by a Trustee or officer, unless there has been either a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office by the court or other body approving the settlement or other disposition or by a reasonable determination, based upon a review of readily available facts (as opposed to a full trial-type inquiry) that he did not engage in such conduct: |
(A) | by vote of a majority of the Disinterested Trustees acting on the matter (provided that a majority of the Disinterested Trustees then in office act on the matter); or |
(B) | by written opinion of independent legal counsel. |
(c) | The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not affect any other rights to which any Trustee or officer may now or hereafter be entitled, shall continue as to a Person who has ceased to be such Trustee or officer and shall inure to the benefit of the heirs, executors and administrators of such Person. Nothing contained herein shall affect any rights to indemnification to which personnel other than Trustees and officers may be entitled by contract or otherwise under law. |
(d) | Expenses of preparation and presentation of a defense to any claim, action, suit or proceeding of the character described in paragraph (a) of this Section 5.2 shall be advanced by the Trust prior to final disposition thereof upon receipt of an undertaking by or on behalf of the recipient to repay such amount if it is ultimately determined that he is not entitled to indemnification under this Section 5.2, provided that either: |
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(i) | such undertaking is secured by a surety bond or some other appropriate security or the Trust shall be insured against losses arising out of any such advances; or |
(ii) | a majority of the Disinterested Trustees acting on the matter (provided that a majority of the Disinterested Trustees then in office act on the matter) or an independent legal counsel in a written opinion, shall determine, based upon a review of readily available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the recipient ultimately will be found entitled to indemnification. |
As used in this section 5.2, a “Disinterested Trustee” is one (i) who is not an “Interested Person” of the Trust (including anyone who has been exempted from being an “Interested Person” by any rule, regulation or order of the Commission), and (ii) against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same similar grounds is then or had been pending.
Agents and employees of the Trust who are not Trustees or officers of the Trust may be indemnified under the same standards and procedures set forth in this Section 5.2, in the discretion of the Board.
With respect to liability of Gartmore Mutual Fund Capital Trust (“Gartmore”), the investment adviser to the Gartmore Growth Fund and the Nationwide Large Cap Growth Fund (the “Funds”), reference is made to Section 7(a) of the Investment Advisory Agreement between Gartmore Mutual Funds (the “Trust”) and Gartmore incorporated by reference herein.
With respect to Goldman Sachs Asset Management, L.P.’s (“GSAM”) indemnification of Gartmore, and its affiliated and controlling persons, and Gartmore’s indemnification of GSAM and its affiliated and controlling persons, reference is made to Section 10(b) of the sub-advisory agreement incorporated by reference herein.
Insofar as indemnification for liability arising under the Securities Act of 1933 (the “1933 Act”) may be permitted to trustees, officers and controlling persons of the Trust pursuant to the foregoing provisions, or otherwise, the Trust has been advised that in the opinion of the United States Securities and Exchange Commission (the “Commission”) such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Trust of expenses incurred or paid by a trustee, officer or controlling person of the Trust in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Trust will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.
Item 16. Exhibits
The following exhibits are incorporated by reference to the previously filed documents indicated below, except Exhibits 4(a), 11(a) and (14)(a):
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(1) | Copies of the charter of the Trust as now in effect: |
(a) | Amended Declaration of Trust established as of October 30, 1997 (as amended March 13, 2003) previously filed as Exhibit (1)(a) with Post-Effective Amendment No. 46 to the Trust’s Registration Statement on Form N-1A on April 30, 2003, and herein incorporated by reference. |
(2) | Copies of the existing by-laws or corresponding instruments of the funds of the Trust: |
(a) | Amended Bylaws, dated August 25, 1983, as amended January 25, 2002, of the Trust previously filed as Exhibit 23(b) with Post-Effective Amendment No. 40 to the Trust’s Registration Statement on Form N-1A on November 5, 2002, and herein incorporated by reference. |
(3) | Copies of any voting trust agreement affecting more than five percent of any class of equity securities of the Trust: |
Not Applicable.
(4) | Copies of the agreement of acquisition, reorganization, merger, liquidation and any amendments to it: |
(a) | Plan of Reorganization made by the Trust on behalf of Gartmore Growth Fund and Nationwide Large Cap Growth Fund as of September 18, 2003, is filed herewith as Exhibit (4)(a). |
(5) | Copies of all instruments defining the rights of holders of the securities being registered including, where applicable, the relevant portion of the charter or by-laws of the Trust: |
(a) | Article VI and Article X of the Amended Declaration of Trust as previously incorporated by reference above to this Registration Statement as Exhibit (1)(a) define the rights of holders of shares. |
(6) | Copies of all investment advisory contracts relating to the management of the assets of the Funds: |
(a) | Investment Advisory Agreement dated May 9, 1998 among Nationwide Investing Foundation III (now known as Gartmore Mutual Funds) and Nationwide Advisory Services, Inc. previously filed as Exhibit 24(b)(5)(a) with Post-Effective Amendment No. 11 to the Trust’s Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. |
(1) | Amendment dated September 1, 1999 to the Investment Advisory Agreement among Nationwide Mutual Funds (now known as Gartmore Mutual Funds), Nationwide Advisory Services, Inc. and |
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Villanova Mutual Fund Capital Trust (now known as Gartmore Mutual Fund Capital Trust) previously filed as Exhibit 23(d)(1)(a) with Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A on December 29, 1999, and herein incorporated by reference. |
(b) | Subadvisory Agreement for the Nationwide Large Cap Growth Fund. |
(1) | Amendment to Subadvisory Agreement dated September 1, 1999 among Nationwide Mutual Funds (now known as Gartmore Mutual Funds), Villanova Mutual Fund Capital Trust (now known as Gartmore Mutual Fund Capital Trust) and Goldman Sachs Asset Management previously filed as Exhibit (23)(d)(3)(c)(2) with Post-Effective Amendment 18 to the Trust’s Registration Statement on Form N-1A on December 29, 1999, and herein incorporated by reference. |
(7) | Copies of each underwriting or distribution contract between the Trust and a principal underwriter, and specimens or copies of all agreements between principal underwriters and dealers: |
(a) | Underwriting Agreement dated October 1, 2002 between Gartmore Mutual Funds and Gartmore Distribution Services, Inc. previously filed as Exhibit (7)(a) with the Trust’s initial Registration Statement on Form N-14 [File No. 333-103906] on March 18, 2003, and herein incorporated by reference. |
(b) | Model Dealer Agreement previously filed as Exhibit (6)(a) with Post-Effective Amendment No. 11 to the Trust’s Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. |
(c) | Standard Dealer Agreement previously filed as Exhibit (7)(c) with the Trust’s initial Registration Statement on Form N-14 [File No. 333-103906] on March 18, 2003, and herein incorporated by reference. |
(8) | Copies of all bonus, profit sharing, pension, or other similar contracts or arrangements wholly or partly for the benefit of trustees or officers of the Trust in their capacity as such: |
Not Applicable.
(9) | Copies of all custodian agreements and depository contracts under Section 17(f) of the 1940 Act, for securities and similar investments of the Trust, including the schedule of remuneration: |
(a) | Global Custody Agreement dated April 4, 2003 between Gartmore Mutual Funds and JPMorgan Chase Bank previously filed as Exhibit 23(g)(3) with Post-Effective Amendment No. 1 to the Trust’s Registration Statement on Form N-1A on April 30, 2003. |
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(10) | Copies of any plan entered into by the Trust pursuant to Rule 12b-1 under the 1940 Act and any agreements with any person relating to implementation of the plan, and copies of any plan entered into by the Trust pursuant to Rule 18f-3 under the 1940 Act, any agreement with any person relating to implementation of the plan, any amendment to the plan, and a copy of the portion of the minutes of the meeting of the Trust’s trustees describing any action taken to revoke the plan: |
(a) | Amended Distribution Plan under Rule 12b-1 effective October 1, 2002, previously filed as Exhibit 23(m)(1) with Post-Effective Amendment No. 40 to the Trust’s Registration Statement on Form N-1A on November 5, 2002, and herein incorporated by reference. |
(b) | Model Dealer Agreement previously filed as Exhibit 6(a) with Post-Effective Amendment No. 11 to the Trust’s Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. |
(c) | Standard Dealer Agreement previously filed as Exhibit (7)(c) with the Trust’s initial Registration Statement on Form N-14 [File No. 333-103906] on March 18, 2003, and herein incorporated by reference. |
(d) | Amended Rule 18f-3 Plan amended effective March 1, 2003 previously filed as Exhibit 23(n) with Post-Effective Amendment No. 35 to the Trust’s Registration Statement on Form N-1A on February 28, 2003, and herein incorporated by reference. |
(11) | An opinion and consent of counsel as to the legality of the securities being registered, indicating whether they will, when sold, be legally issued, fully paid and nonassessable: |
(a) | Opinion and consent of counsel is filed herewith as Exhibit (11)(a). |
(12) | An opinion, and consent to its use, of counsel or, in lieu of an opinion, a copy of the revenue ruling from the Internal Revenue Service, supporting the tax matters and consequences to shareholders discussed in the prospectus: |
(a) | Form of Opinion and Consent of Counsel Supporting Tax Matters and Consequences to Shareholders to be filed by post-effective amendment. |
(13) | Copies of all material contracts of the Trust not made in the ordinary course of business which are to be performed in whole or in part on or after the date of filing the registration statement: |
(a) | Fund Administration Agreement dated May 9, 1998 among Nationwide Investing Foundation III (now known as Gartmore Mutual Funds) and Nationwide Advisory Services, Inc. previously filed as Exhibit 24(b)(9)(a) with Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. |
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(1) | Amendment, effective September 1, 1999, to the Fund Administration Agreement among Nationwide Mutual Funds (now known as Gartmore Mutual Funds), Nationwide Advisory Services, Inc. and Villanova SA Capital Trust (now known as Gartmore SA Capital Trust) previously filed as Exhibit 23(h)(1)(b) with Post-Effective Amendment No. 16 to the Registration Statement on Form N-1A on December 13, 1999, and herein incorporated by reference. |
(b) | Transfer and Dividend Disbursing Agent Agreement dated May 9, 1998 between Nationwide Investing Foundation III (now known as Gartmore Mutual Funds) and Nationwide Investors Services, Inc. (now known as Gartmore Investor Services, Inc.) previously filed as Exhibit 24(b)(9)(b) with Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. |
(c) | Administrative Services Plan (amended effective October 1, 2002) previously filed as Exhibit 23(h)(6)(b) with Post-Effective Amendment No. 40 to the Registration Statement on Form N-1A on November 5, 2002 and herein incorporated by reference. |
(d) | Expense Limitation Agreement, effective as of October 1, 2002, between Gartmore Mutual Fund Capital Trust and Gartmore Mutual Funds previously filed as Exhibit 23(h)(18) with Post-Effective Amendment No. 44 to the Registration Statement on Form N-1A on February 28, 2003, and herein incorporated by reference. |
(14) | Copies of any other opinions, appraisals, or rulings, and consents to their use, relied on in preparing the registration statement and required by Section 7 of the 1933 Act: |
(a) | Consent of independent auditors filed herewith as Exhibit 14(a). |
(15) | All financial statements omitted pursuant to Items 14(a)(1): |
Not Applicable.
(16) | Manually signed copies of any power of attorney pursuant to which the name of any person has been signed to the registration statement: |
(a) | Power of Attorney for Gerald J. Holland dated October 30, 2002 previously filed as Exhibit 23(q)(3) with Post-Effective Amendment No. 40 to the Trust’s Registration Statement on Form N-1A on November 5, 2002, and herein incorporated by reference. |
(b) | Power of Attorney for Charles E. Allen, Paula H.J. Cholmondeley, C. Brent Devore, Robert M. Duncan, Barbara Hennigar, Paul J. Hondros, Thomas J. Kerr, IV, Douglas Kridler, Arden L. Shisler, and David C. |
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Wetmore dated March 13, 2003 previously filed as Exhibit (23)(a) with Post-Effective Amendment No. 46 to the Trust’s Registration Statement on Form N-1A on April 30, 2003, and herein incorporated by reference. |
(17) | Any additional exhibits which the Trust may wish to file: |
(a) | Statement of Additional Information of the Trust, dated October 1, 2003, filed as part of Post-Effective Amendment No. 50 to the Trust’s Registration Statement on Form N-1A on August 1, 2003 (File Nos. 333-40455 and 811-08495) is hereby incorporated by reference to this Registration Statement as Exhibit (17)(a). |
(b) | The Annual Reports to Shareholders of the Funds for the fiscal year ended October 31, 2002 as filed pursuant to Rule 30d-1 on January 10, 2003, are hereby incorporated by reference to this Registration Statement as Exhibit (17)(b). |
(c) | The Semi-Annual Reports to Shareholders of the Funds for the period ended April 30, 2003 as filed pursuant to Rule 30d-1 on July 10, 2003, are hereby incorporated by reference to this Registration Statement as Exhibit (17)(c). |
Item 17. Undertakings
(1) | The undersigned Trust agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the 1933 Act, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(2) | The undersigned Trust agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. |
(3) | The undersigned Trust agrees to file by post-effective amendment to the registration statement an opinion of counsel supporting the tax consequences of the proposed reorganization within a reasonable time after receipt of such opinion. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Conshohocken, and the State of Pennsylvania, on this 18th day of September, 2003.
Registrant:
Gartmore Mutual Funds
By: | /s/ ELIZABETH A. DAVIN | |
Elizabeth A. Davin, Esq. Assistant Secretary |
As required by the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ PAUL J. HONDROS Paul J. Hondros* | Trustee and Chairman (Principal Executive Officer) | September 18, 2003 | ||
/s/ GERALD J. HOLLAND Gerald J. Holland* | Treasurer (Principal Accounting and Financial Officer) | September 18, 2003 | ||
/s/ CHARLES E. ALLEN Charles E. Allen* | Trustee | September 18, 2003 | ||
/s/ PAULA H.J. CHOLMONDELEY Paula H.J. Cholmondeley* | Trustee | September 18, 2003 | ||
/s/ C. BRENT DEVORE C. Brent Devore* | Trustee | September 18, 2003 | ||
/s/ ROBERT M. DUNCAN Robert M. Duncan* | Trustee | September 18, 2003 | ||
/s/ BARBARA HENNIGAR Barbara Hennigar* | Trustee | September 18, 2003 | ||
/s/ THOMAS J. KERR, IV Thomas J. Kerr, IV* | Trustee | September 18, 2003 | ||
/s/ DOUGLAS F. KRIDLER Douglas F. Kridler* | Trustee | September 18, 2003 | ||
/s/ ARDEN L. SHISLER Arden L. Shisler* | Trustee | September 18, 2003 | ||
/s/ DAVID C. WETMORE David C. Wetmore* | Trustee | September 18, 2003 |
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*By: | /s/ ELIZABETH A. DAVIN, ESQ. | |
Elizabeth A. Davin, Attorney-in-Fact *Pursuant to Powers-of-Attorney. |
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GARTMORE MUTUAL FUNDS
REGISTRATION STATEMENT ON FORM N-14
EXHIBIT INDEX
EXHIBIT NO. | DESCRIPTION | |
(1) | Amended Declaration of Trust dated as of October 30, 1997 (as amended March 13, 2003) of Gartmore Mutual Funds previously filed as Exhibit (1)(a) with Post-Effective Amendment No. 46 to the Trust’s Registration Statement on Form N-1A on April 30, 2003, and herein incorporated by reference. | |
(2) | Amended Bylaws, dated August 25, 1983, as amended January 25, 2002, of the Trust previously filed as Exhibit 23(b) with Post-Effective Amendment No. 40 to the Trust’s Registration Statement on Form N-1A on November 5, 2002, and herein incorporated by reference. | |
(4)(a) | Plan of Reorganization made by the Trust on behalf of Gartmore Growth Fund and Nationwide Large Cap Growth Fund as of September 18, 2003, is filed herewith as Exhibit (4)(a). | |
(6)(a) | Investment Advisory Agreement dated May 9, 1998 among Nationwide Investing Foundation III (now known as Gartmore Mutual Funds) and Nationwide Advisory Services, Inc. previously filed as Exhibit 24(b)(5)(a) with Post-Effective Amendment No. 11 to the Trust’s Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. | |
6(a)(1) | Amendment dated September 1, 1999 to the Investment Advisory Agreement among Nationwide Mutual Funds (now known as Gartmore Mutual Funds), Nationwide Advisory Services, Inc. and Villanova Mutual Fund Capital Trust (now known as Gartmore Mutual Fund Capital Trust) previously filed as Exhibit 23(d)(1)(a) with Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A on December 29, 1999, and herein incorporated by reference. | |
6(b)(1) | Amendment to Subadvisory Agreement dated September 1, 1999 among Nationwide Mutual Funds (now known as Gartmore Mutual Funds), Villanova Mutual Fund Capital Trust (now known as Gartmore Mutual Fund Capital Trust) and Goldman Sachs Asset Management previously filed as Exhibit (23)(d)(3)(c)(2) with Post-Effective Amendment 18 to the Trust’s Registration Statement on Form N-1A on December 29, 1999, and herein incorporated by reference. | |
7(a) | Underwriting Agreement dated October 1, 2002 between Gartmore Mutual Funds and Gartmore Distribution Services, Inc. previously filed as Exhibit (7)(a) with the Trust’s initial Registration Statement on Form N-14 [File No. 333-103906] on March 18, 2003, and herein incorporated by reference. |
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EXHIBIT NO. | DESCRIPTION | |
7(b) | Model Dealer Agreement previously filed as Exhibit (6)(a) with Post-Effective Amendment No. 11 to the Trust’s Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. | |
7(c) | Standard Dealer Agreement previously filed as Exhibit (7)(c) with the Trust’s initial Registration Statement on Form N-14 [File No. 333-103906] on March 18, 2003, and herein incorporated by reference. | |
9(a) | Global Custody Agreement dated April 4, 2003 between Gartmore Mutual Funds and JPMorgan Chase Bank previously filed as Exhibit 23(g)(3) with Post-Effective Amendment No. 1 to the Trust’s Registration Statement on N-1A on April 30, 2003, and herein incorporated by reference. | |
10(a) | Amended Distribution Plan under Rule 12b-1 effective October 1, 2003, previously filed as Exhibit 23(m)(1) with Post-Effective Amendment No. 40 to the Trust’s Registration Statement on Form N-1A on November 5, 2002, and herein incorporated by reference. | |
10(b) | Model Dealer Agreement previously filed as Exhibit 4(b)(6)(b) with Post-Effective Amendment No. 11 to the Trust’s Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. | |
10(c) | Standard Dealer Agreement previously filed as Exhibit (7)(c) with the Trust’s initial Registration Statement on Form N-14 [File No. 333-103906] on March 18, 2003, and herein incorporated by reference. | |
10(d) | Amended Rule 18f-3 Plan, amended effective March 1, 2003, previously filed as Exhibit 23(n) with Post-Effective Amendment No. 35 to the Trust’s Registration Statement on Form N-1A on February 28, 2003, and herein incorporated by reference. | |
11(a) | Opinion and consent of counsel is filed herewith as Exhibit 11(a). | |
12(a) | Form of Opinion and Consent of Counsel Supporting Tax Matters and Consequences to Shareholders to be filed by post-effective amendment. | |
13(a) | Fund Administration Agreement dated May 9, 1998 among Nationwide Investing Foundation III (now known as Gartmore Mutual Funds) and Nationwide Advisory Services, Inc. previously filed as Exhibit 24(b)(9)(a) with Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. |
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EXHIBIT NO. | DESCRIPTION | |
13(a)(1) | Amendment effective as of September 1, 1999 to the Fund Administration Agreement among Nationwide Mutual Funds (now known as Gartmore Mutual Funds), Nationwide Advisory Services, Inc. and Villanova SA Capital Trust (now known as Gartmore SA Capital Trust) previously filed as Exhibit 23(h)(1)(b) with Post-Effective Amendment No. 16 to the Registration Statement on Form N-1A on December 13, 1999, and herein incorporated by reference. | |
13(b) | Transfer and Dividend Disbursing Agent Agreement dated May 9, 1998 between Nationwide Investing Foundation III (now known as Gartmore Mutual Funds) and Nationwide Investors Services, Inc. (now known as Gartmore Investor Services, Inc.) previously filed as Exhibit 24(b)(9)(b) with Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. | |
13(c) | Administrative Services Plan (amended effective October 1, 2002) previously filed as Exhibit 23(h)(6)(b) with Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A on January 5, 1999, and herein incorporated by reference. | |
13(d) | Expense Limitation Agreement, effective as of [October 1, 2002,] between Gartmore Mutual Fund Capital Trust and Gartmore Mutual Funds previously filed as Exhibit 23(h)(18) with Post-Effective Amendment No. 44 to the Registration Statement on Form N-1A on February 28, 2003, and herein incorporated by reference. | |
14(a) | Consent of independent auditors is filed herewith as Exhibit (14)(a). | |
16(a) | Power of Attorney for Gerald J. Holland dated October 30, 2002 previously filed as Exhibit 23(q)(3) with Post-Effective Amendment No. 40 to the Trust’s Registration Statement on Form N-1A on November 5, 2002, and herein incorporated by reference. | |
16(b) | Power of Attorney for Charles E. Allen, Paula H.J. Cholmondeley, C. Brent Devore, Robert M. Duncan, Barbara Hennigar, Paul J. Hondros, Thomas J. Kerr, IV, Douglas Kridler, Arden L. Shisler, and David C. Wetmore dated March 13, 2003 previously filed as Exhibit (23)(a) with Post-Effective Amendment No. 46 to the Trust’s Registration Statement on Form N-1A on April 30, 2003, and herein incorporated by reference. | |
17(a) | Statement of Additional Information of the Trust, dated October 1, 2003, previously filed as part of Post-Effective Amendment No. 50 to the Trust’s Registration Statement on Form N-1A on August 1, 2003 (File Nos. 333-40455 and 811-08495) is hereby incorporated by reference to this Registration Statement as Exhibit (17)(a). |
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EXHIBIT NO. | DESCRIPTION | |
17(b) | The Annual Reports to Shareholders of the Funds for the fiscal year ended October 31, 2002 as filed pursuant to Rule 30d-1 on January 10, 2003, are hereby incorporated by reference to this Registration Statement as Exhibit (17)(b). | |
17(c) | The Semi-Annual Reports to Shareholders of the Funds for the period ended April 30, 2003 as filed pursuant to Rule 30d-1 on July 10, 2003, are hereby incorporated by reference to this Registration Statement as Exhibit (17)(c). |
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