NVIT Federated High Income Bond

Objective And Strategy

Objective
The investment seeks to provide high current income.

Strategy
The fund invests at least 80% of its net assets in U.S. dollar-denominated high-yield bonds (commonly known as junk bonds) of U.S. and foreign issuers, including those in emerging market countries. Securities selected for the fund normally are lower rated or are below investment grade, with no minimum acceptable rating. The fund may invest in zero-coupon bonds. It may use credit default swaps.

Principal Risks

* Certain portfolios are subject to active trading risk. (Some may derive a significant portion of their assets from investors who take part in certain strategic and tactical asset allocation programs). The frequent exchange of shares of the portfolio may cause the portfolio to experience high turnover. High portfolio turnover may result in the portfolio having to pay higher transaction costs and may negatively impact the portfolio manager's ability to achieve the investment objective of the portfolio.

* The Fund could lose money if the issuer of a debt security is unable to meet its financial obligations or goes bankrupt. This fund may invest in securities rated below investment grade or "junk bonds." Junk bonds may be sensitive to economic changes, political changes, or adverse developments specific to a company.

* The value of your investment in a Fund is based on the net asset value ("NAV") of the underlying funds and, in turn, the securities that the underlying funds hold. The Funds are subject to the risk that one or more underlying funds will not perform as expected or will underperform other similar funds or that the combination of underlying funds selected by the Funds' investment will not perform as expected. The Funds will be exposed to all of the risk of an investment in the underlying Funds.

* Generally, a security is liquid if the Portfolio is able to sell the security at a fair price within a reasonable time. Liquidity is generally related to the market trading volume for a particular security.

* Mortgage-backed securities may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The underlying assets may default or decline in quality or value.

* The risk that a preferred stock will decline in price, or fail to pay dividends when expected, because the issuer experiences a decline in its financial status, or that such stock may be illiquid.

* The market for bank loans may not be highly liquid and the Fund may have difficulty selling them. These investments expose the Fund to the credit risk of both the financial institution and the underlying borrower.

* The pool of high yield securities underlying collateralized bond obligations is typically separated in grouping called tranches representing different degrees of credit quality. The higher quality tranches have greater degrees of protection and pay lower interest rates. The lower tranches, with greater risk, pay higher interest rates.

* Distressed securities are speculative and involve substantial risks in addition to the risks of investing in junk bonds.